The path to success in today’s sideways markets is the same as it has been through the past decade with slight tweaks, and there are key differences between the markets now and in 2008, according to Georgia-based DeHaan & Co Financial Partners.

Among the best picks to defeat trendless or flat markets are high-dividend stocks, which tend to fluctuate less, the firm says. It also recommends the use of option strategies to protect downside risk.

While the exceptional events of late, such as the collapse of MF Global and worries over debt sustainability in the eurozone, have led to comparisons with the financial crisis of a few years ago, there are several key distinctions, says DeHaan in an investment note.

Comparing the key fears of investors three years ago to those of today highlights the different concerns of the time, the firm says. For instance, housing and toxic loans were the culprits in the financial crisis, while today investors talk about fear over the eurozone, quantitative easing, the European Central Bank and International Monetary Fund.

Another difference, DeHaan claims, is that global frustrations with governments hadn’t flared up in 2008 as they have now, a change the firm says is “bad news” for the “largely democratic global economy,” and has led it to predict an imminent shift in politics in the US and abroad.

Correlated versus uncorrelated returns

The critical difference between the markets of today and a few years ago is that in 2008 the alarming but highly correlated markets allowed for money to be made by shorting markets, says DeHaan. Today however, markets remain surprising but are uncorrelated, which has led to investment paralysis amongst professionals.

“In 2008, investors made money shorting the market using inverse ETFs, and short sells of stock, because the correlated global market went south. Today, investors are experiencing an uncorrelated market sector movement. Investors scrutinize stocks and think they see lows only to experience another 200-point drop,” the investment note said.

And uncertain global events seem set to continue for the foreseeable future due to the postponement of US fiscal deficit reduction measures until after the 2012 presidential elections, as well as uncertainty over Greece (and now Italy), and fears about the Chinese real estate market.