We are all relieved the unlamented year 2008 is past. It was a brutally rough year, seismic even.

The US stock market went through its worst year since the Great Depression. The Dow fell 33.8 percent, the worst annual decline second only to the 52.7 percent drop in 1931. The S&P500 lost 38.5 percent, just a shade better than its 38.6 percent decline back in 1937. The scope and extent of wealth destruction is just incomprehensible.

The government finally acknowledged in December 2008 that the economy had been in recession since December 2007. The question is: How long will this recession last? Some say 10 months; others say longer.

The Great Depression began August 1929 and did not end until 43 months later. How will things be in 2009? Perhaps, there is some comfort to be taken in the fact that the 11 recessions after the Second World War lasted only about 10 months on the average.

Only one thing is certain: each new day will mean one day closer to recovery. Prosperity will always come again, once said John D. Rockefeller.

For those who have some money left to invest, a conservative approach and a diversified portfolio may help reduce the anxiety of uncertainty. Some possibilities:

1. Corporate bonds
There is expert consensus that investment-grade corporate bonds may be a good bet for the year. Corporate debt is currently priced at a huge discount. Once institutional investors open up to more risk, the prices for bonds issued by the top-rated companies are likely to rise. These days, corporate bond yields are several notches higher than Treasury bonds.

2. US stocks
When you`re brave enough to venture again into stocks, consider that US stocks may be in a better position to rebound than international stocks. The federal government has been bolder in its response to the crisis. Industries primarily targeted by the bailouts and the incoming administration`s promise of massive spending will be the best bets. This means companies in construction, alternative energy, and technology for productivity.  Larger cap companies or small cap banks that derive their revenues mostly from within the US are recommended.

3. TIPS (Treasury Inflation-Protected Security)
TIPS may be in if (or when) inflation comes. During these days of recession, deflation is the main worry. But with government set to spend a lot of money on its proposed $800 billion stimulus package, inflation may strike sooner than you think. When it does, the perfect inflation fighter is TIPS.

4. Companies with necessities
In a period where people buy only what they need, the companies that serve these needs are likely to perform better. Companies like Wal-Mart, the master of low-price goods, Procter & Gamble, or pharmaceuticals like Johnson & Johnson, Pfizer and Merck are good defensive stocks. Consumer staples like food and beverages will continue to be bought, benefiting companies like General Mills.

5. Municipal bonds
Like corporate bonds, muni-bonds have seen heavily discounted prices — making their yields more attractive. The added incentive is that these bonds are tax exempt. Pick very carefully and look for the more reliable bond issuers.

6. Cash-rich market leaders
Financially sound companies who are market leaders in their industries may be poised to take advantage as economic recovery gets underway. Companies with ample cash flow are most attractive, as this will help them hold out better during this downturn.

7. Dependable dividends
In hard times, it is best to invest in something that provides predictable dividend income. The more dependable sources of dividends are stocks from telecoms companies and utilities.

8. Healthcare firms
Over the years, healthcare stocks have delivered the best values and robust earnings growth. Healthcare reform is not about to impair the industry, even as it seeks to lower healthcare costs and widen access. Old reliables are the giants Johnson & Johnson, Abbott Laboratories, Pfizer, Merck, Bristol-Myers Squibb.

9. Oil recovers
Oil prices have soared high to a peak of $147 and plunged low to around $40 on fears that demand will drop as the world economy shrinks. But emerging economies like India and China will continue to fuel demand, especially as they recover. Prices may go back up and stabilize around $80 or so — benefiting stock prices of oil companies like Exxon and Chevron.

10.  Gold shines
Like oil, gold prices surged to $1000 per ounce and fell back to $720. But gold and precious metals have always been considered safe havens and 2009 is likely to see price trends going up.

Bilitz
http://www.articlesbase.com/business-ideas-articles/mattress-money-the-wave-of-the-future–735169.html