Aaron Task celebrated the start of the second half by predicting which first-half losers will turn into winners by the end of the year. Task, co-executive editor of TheStreet.com, subbed Friday for the vacationing Jim Cramer on his "Real Money" radio show.

Using a list supplied by The Wall Street Journal, Task reviewed the mega-cap stocks that had the roughest first half and -- contrarian that he is -- forecast a turnaround for most of them.

Wal-Mart ( WMT) has had a terrible first half, but Task said that negative sentiment has reached a peak. Should the economy slow down in the second half, shoppers may opt to walk the aisles in their local Wal-Mart as opposed to a more upscale and pricey store, Task says.

With regard to drugmaker Merck ( MRK), Task says institutions have to own it and will like it even more at these depressed levels, especially with its current juicy 4.59% dividend yield.

Another first-half loser likely to turn around with a slowing economy is McDonald's ( MCD) Task says. Same goes for IBM ( IBM), another American icon of a company, which Task says is being hit by too much negative sentiment.

Aluminum giant Alcoa ( AA) kicks off earnings season next week, and Task says the company could pop if it provides better-than-expected earnings, mostly because it has been out of favor for so long.

And as for 3M ( MMM), which fell over a management shuffle, Task says it may be time to dip a toe in and start buying.

As for the first-half winners, Task advised listeners to take profits in Boeing ( BA) which is up 27% year-to-date. And despite Cramer's love for shares of Intel ( INTC) Task warned that there very well may be "too much optimism going into the quarterly report."

Task's guest John Rutledge, chairman of Rutledge Capital, spoke more about inflation and exchange-traded funds than individual stocks.

Veteran market watcher Rutledge weighed in on the recent Fed moves, saying he doesn't think inflation is as much of a problem as the Fed does. As a result, Rutledge is worried the Fed will raise rates to levels at which small investors will be priced out of the credit market.

Small investors, says Rutledge, don't get the same borrowing rates as big players like General Motors ( GM) and General Electric ( GE).

In terms of equities, Rutledge says to stick with small-caps, even though they have outperformed larger companies over the past five years. To get involved in the small-cap market, Rutledge advises investors to check out the iShares Russell 2000 ( IWM) ETF, as well as the iShares S&P SmallCap 600 ( IJR).

If overseas investing is your game, Rutledge says the best way to do it is through funds -- especially if you want to get involved in emerging nations like China. Rutledge's top international ETF picks were the iShares MSCI Pacific ex-Japan ( EPP) ETF and the iShares MSCI Japan ( EWJ).

But of course, with America's birthday coming up on Monday, Task also says it's time to reflect and enjoy life in the good old U.S.A.