Forester: Focus on Top-Line Growth in '09

Of the 2,800 U.S. stock funds tracked by Morningstar, only the Forester Value Fund (FVALX Quote) finished in the green last year.

"We really watch the downside," says fund manager Tom Forester. "We had seen the housing bubble coming so we were able to avoid financials. And we overweighted consumer staples and health care stocks which do well in recessions."

Forester's attention to detail -- and defense -- paid off in 2008. His $60 million fund was up almost half a percent last year compared with a more than 37% drop in the S&P 500. Unlike the index, Forester has the option to move funds into cash, something he did at key junctures during last year's rocky trading. He also keeps fund fairly concentrated holding between 40 and 50 stocks in total, so it's not for the faint of heart.

Over the past three years, the fund has lost an average of 2.5% per year, almost 9 percentage points better than the market. His five-year average return is 3.6%, which is 7.5% better than the S&P 500, enough to merit him a full five stars from Morningstar.

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Two of his best performers in 2008, McDonald's (MCD Quote) and Wal-Mart (WMT Quote), were also the only two Dow stocks to finish the year in positive territory. And Forester expects their outperformance to continue as consumers trade down.

"People still like to go out for meals but in recessionary times they trade down as far as price points go," says Forester. "So McDonald's fits that perfectly. They've changed their menu. They've gone more to salads. They've gone more to wraps. They have gourmet coffee now. So they are doing quite well."