Four Investing Tips for 2009

Offsetting that will be domestic programs that will be designed to create jobs and rebuild decaying infrastructure. In addition power generation will be another focus for the federal government. Some stocks that could get a boost from such capital spending programs are Aecom Technology (ACM Quote), Fluor (FLR Quote), McDermott (MDR Quote), Foster Wheeler (FWLT Quote), Manitowoc (MTW Quote), Shaw Group (SGR Quote), Jacobs Engineering (JEC Quote), KBR (KBR Quote) and Chicago Bridge & Iron (CBI Quote).

Healthcare providers and biotech pharmaceutical manufacturers will also benefit from Obama's desire to deliver more affordable healthcare to all citizens. The form of this government spending is still unknown. However, we can identify some potential beneficiaries, such as Universal Health Systems (UHS Quote), Amedisys (AMED Quote), Amgen (AMGN Quote), Gilead (GILD Quote), Celgene (CELG Quote) and Genzyme (GENZ Quote).

There are also some interesting exchange-traded funds that might be investment-worthy based on these themes: PowerShares Dynamic Biotech & Genome (PBE Quote), Biotech HOLDRs (BBH Quote) and iShares Dow Jones U.S. Healthcare Providers (IHF Quote).

All that said, be careful. 2009 will be a post-presidential election year, which is historically the worst in the four-year election cycle. Of those bounce-back years I listed earlier, only 1921 and 1933 were post-presidential election years.

4. Will 'Dead'Industries Be Resurrected?

Many industries and sectors were decimated last year -- home builders, automobiles, financials, retail and semiconductors to name a few. I believe we will see signs of life from one or more of these sectors in 2009.

My belief is that the most likely sector candidate for resurrection will be the home builders. Interest rates are at record low levels and inventories are beginning to be whittled down. At the same time, banks and the federal agencies are working with existing homeowners to avoid foreclosure.

Still, it is possible that some home builders will not survive. On the other hand, the strongest will not only survive, but will emerge even stronger. In my opinion, the best managed homebuilder is Toll Brothers (TOL Quote) and the worst managed is Beazer Home (BZH Quote).

Your Homework

I believe 2009 will not be an extrapolation of 2008. There will be opportunities to capitalize on a bottoming economy, improving financial industry and government stimulus. Here is some homework to help you seek opportunities in 2009:

Select an index which is likely to emerge as a leader after having a significant down year. This could be the Dow, the S&P, technology, small-caps or perhaps a blend of two or more.

Indentify "early cycle" stocks and sell "late cycle" stocks, such as defensive and consumer staples.

Research ways to benefit from Obama's fiscal stimulus plans.

A Bonus

Check out my tongue-in-cheek "10 Things That I Will Not Miss About 2008" on my Finance Professor blog. Enjoy it and have a happy, healthy and prosperous New Year.