Seven Safe Ways to Make Money in '08

We may not have a crystal ball to peer into the future, but by using TheStreet.com proprietary statistical models, you are likely to find good ideas to invest in for the next 12 months. Here are examples of seven investments that the models expect to be among the best performers a year from now.

You'll notice that this isn't a list of just seven stocks or seven funds; for this list, I combed every investment vehicle in TheStreet.com Ratings universe to give you the best edge on the year ahead. You won't be able to do that by just sticking with one type of vehicle. In 2008, once again you'll need every type of arrow for your quiver.

This approach worked well last year, but there were some surprises.

The seven-to-own picks for 2007 appreciated an average of 14% vs. 5% for the S&P 500 benchmark during the year.

+22%, PowerShares Aerospace & Defense Portfolio (PPA)

+5%, Vanguard Telecommunications Services (VOX)

+15%, Gamco Global Telecom (GTCAX)

+16%, Trimble Navigation(TRMB)

+6%, Adobe Systems (ADBE)

+10%, Schwab Health Care Focus Fund (SWHFX)

+21%, Caterpillar (CAT)

Of all the picks, the real home run was the timely call on Caterpillar, which at one point was up over 40% but came down as fears about the U.S. economy and slowing earnings growth at the company cooled investors' enthusiasm on this stock.

Fortunately, all of last year's picks did at least as well as the overall stock market. But the 5%-6% returns for VOX and ADBE were disappointing nonetheless. In the case of VOX, the strong 20% average gains in Dow Jones Industrial Average components AT&T (T) and Verizon Communications (VZ) that represent 40% of that fund were not enough to offset declines in Sprint Nextel (S) and other smaller communications stocks.

Before proceeding with this year's picks, here's a quick overview of the stock-picking methodology used.

To be considered, the stocks or funds had to carry a buy recommendation in TheStreet.com Ratings screener. For stocks, this computerized set of calculations uses five major factor groups: a) growth b) total return c) efficiency d) volatility and e) solvency to derive the stocks with the best potential for price appreciation. For funds, the Ratings models rely on rolling 12- and 36-month returns adjusted for price volatility. The models utilize drawdown risk, which lowers the rating grade for those investments with the tendency to dramatically move down in price. As a final stock filter, I selected those top-rated stocks with the best performance over the last two years; solid cash flow increases and positive earnings growth prospects. These and other similar strength and expectations factors I discussed in this recent article Tech Trends to Watch in 2008

So how might you find the top picks for 2008?