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President-elect Obama has a lot of healing to perform in order to cure the nation's ailing economy. As Obama prepares to take the oath of office, investors looking to stop the bleeding in their personal portfolios may want to consider a heavy dose of health care stocks.

"We believe longer term President Obama is going to be very positive for health care. A lot of stated initiatives have already been made, and we expect additional initiatives to be introduced his first 100 days," says Roseanne Ott, co-manager of the $250 million

Alger Health Sciences Fund

(AHSAX) - Get Alger Health Sciences A Report



iShares S&P Global Healthcare Exchange Traded Fund

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, which holds heavy weightings of

Johnson & Johnson

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(PFE) - Get Pfizer Inc. Report

shares, was down 21% in 2008, a performance that would be downright sickening in most years. However, in a year in which the

S&P 500

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tumbled more than 37%, most investors would have chosen that less severe underperformance any day of the week.

Obama Will Boost Biotech

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Ott's Alger Health Sciences fund was down 26% last year, but it has returned 5% annually over the past five years, almost 7 percentage points better than the

S&P 500

. Ott joined Alger as an analyst in April 2002 after spending time both on Wall Street at Lehman Brothers and in the pharmaceutical industry at Johnson & Johnson and Sulzer Spine-Tech, where she facilitated the training of cardiologists, neurosurgeons and orthopedic spine surgeons. Among her accomplishments was the development of the "Ott-Knot," an efficient and inexpensive suture technique used by surgeons.

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While Hillary Clinton failed in her attempt to untangle the nation's proverbial health care knot after her husband was sworn in as president in 1993, Ott says Obama has a strong chance of succeeding due to the nation's acute realization that the issue has grown too big to ignore. She believes the biggest corporate beneficiaries of Obama's focus on health care will be generic-drug manufacturers and biotech companies.

"We like two stocks in particular in the generic-drug space,


(TEVA) - Get Teva Pharmaceutical Industries Ltd. Report



(MYL) - Get Viatris, Inc. Report

. They will benefit from the legislative direction that will be defined in 2009," says Ott. "Also, longer term, big pharmaceutical companies are seeing large branded drugs come off patent to the tune of $25 billion. Teva and Mylan will benefit by bringing more generics through their pipeline."

Biotech stocks also fared well in an otherwise miserable 2008 with the

iShares Nasdaq Biotechnology ETF

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down just over 12% for the year. Ott expects that trend to continue, with names like





(CELG) - Get Celgene Corporation Report



(AMGN) - Get Amgen Inc. Report


Gilead Sciences

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"Without question it's to going to be biotech for the first half of 2009," says Ott. "M&A is a major opportunity because big-cap pharma is going to suffer on their top line relative to the next three to five years because they don't have a pipeline and biotech is going to fill that gap for them."

Before joining, Gregg Greenberg was a writer and segment producer for CNBC's Closing Bell. He previously worked at FleetBoston and Lehman Brothers in their Private Client Services divisions, covering high net-worth individuals and midsize hedge funds. Greenberg attended New York University's School of Business and Economic Reporting. He also has an M.B.A. from Cornell University's Johnson School of Business, and a B.A. in history from Amherst College.