Nine Stock Funds for an Uncertain '09

Two things are certain about 2009:

1. the economic downturn will hold its grip on business for at least a good part of the year; and
2. a new administration will take the helm in Washington intent on ending the slump.

With few reasons to buy stock mutual funds at present, investors should keep in mind that market reversals frequently occur when least expected. In addition, securities markets frequently anticipate turns in the economy by half a year or more, with some lucrative investment gains usually occurring before the overall business picture starts to brighten.

So for farsighted investors with above-average tolerances for risk, TheStreet.com Ratings parsed its database for stock funds worth a look in 2009. The nine funds on the pair of accompanying tables represent traditional defensive equity investments for uncertain economic times and some possible beneficiaries from the efforts of Barack Obama and Federal Reserve Chief Ben Bernanke to get the economy back into gear.

All of the stock funds in the two tables at the end of this column have overall grades in the "A" or "B" ranges from TheStreet.com Ratings, which earn them "buy" recommendations.

An above-average yield traditionally provided insulation from excessive price erosion. But in these days of near-zero returns on many fixed-income instruments, the monthly payments that provide a 6.5% yield for First American Equity Income (FFEIX) should prove particularly appealing.

FFEIX, which appears in the "Traditional Defensive Fund" table, generates its monthly payouts by focusing it holdings on blue-chip stocks such as Exxon Mobil (XOM), Abbott Labs (ABT), AT&T (T), Johnson & Johnson (JNJ) and Wal-Mart (WMT).

With the stock market stubbornly retesting its lows every time investors start to think that the damage is behind us, a fund with little or no net exposure to stocks is worth consideration. The James Advantage Market Neutral Fund (JAMNX) actually appreciated 2.61% during the three-month losing streak through November, when most everything related to the stock market suffered losses well into the double digits.