After a year of battering and tremendous wealth erosion, experts don?t think that the situation is going to improve in a hurry. Almost all investments avenues, barring gold, gilt-edged funds and a few hybrid funds, have tanked big time. Looking ahead, the clouds of recession are threatening to keep matters subdued in 2009 too.

However, it is in times like this that most of the bargains, which become a part of urban legends, are available. More than a quarter of the BSE 500 companies are quoting below their book value. The market capitalisation-to-GDP ratio has come down to 50% levels from 100% levels and this suggests that there is value available in the market.

At the same time there are what experts call, ?value traps.? These are the companies that demonstrate that there is value available and when the investment is made, they tend to fall further. If stock price is the only factor an investor looks at before taking a buying decision then chances are that one would end up seeing the price decline more.

With the market more driven by fund flows, value erosion could happen at a stupendous pace as was noticed when the markets slid to 7,000 levels for the Sensex. Therefore, remaining watchful for developments is something experts have recommended. And in markets like these, the systematic investment plan is the best option.

If you don?t want to be locked into any particular fund, you could create a systematic investment plan by investing fixed sums every quarter as well, say wealth managers. And indeed value averaging or rupee cost averaging are extremely powerful strategies. And when the dust after the market ravage has settled, the benefits of the averaging technique stand out and shine. So the year 2009 would be the most appropriate year to milk this technique.

Clearly, one of the lessons coming out of the year that passes us by is the ephemeral nature of returns and also the huge risks that are present in the economy. Hence, the need for preservation and protection is extremely important. In fact, this could well the your theme for the next year. Creating moats round your investments, building hedges around your house and protecting your family?s financial well-being should be top on the priority list, say experts. The recent terror attacks that happened in Mumbai is a demonstration of how unsafe things can get.

So simply signing up for an insurance policy or a health care service would not be enough. This is the time to look at protection and wealth preservation with greater detail. Estate management will now have to get precedence. And the good news is that there is professional help available this time around. Many wealth managers also offer to manage your estate and they are ready to go the whole hog with clients. This could be the year when you could start getting more open about your finances with professionals. Surely the wild spending binges would be out of the New-Year plans for many and rightly so. These are indeed testing times and usually tough lessons learnt in such times go a long way in developing wealth-building strategies.

Many of the experts who have expressed their views in this edition mention that there could be a revival in the coming months, even if it was not immediate. There are several other developments, like stimulus packages and elections that could be triggers for a rally. Possibilities are always around the corner in the investing world. So while the theme of aggressive wealth growth is now well beyond us, the coming year is one where this wealth needs to be consolidated. And some of it kept aside to make most of the next surge that comes our way.

•Vishakha Mulye ED, ICICI Lombard General Insurance

?We would be investing more in equities of very high quality: These would typically be companies that have low debt, are operating in a market with significant demand potential and have strong capacity for cash generation.

On the debt side, we are benefited from lower sovereign yields. Now it is time to move on to high quality AAA bonds. Credit spreads are still comfortably high. We have seen early signs of credit spreads compressing – for instance credit spreads of up to 1,500 basis points have compressed to 700 basis points internationally. Domestic credit spreads currently are close to 400 basis points and they appear attractive. Even spreads on non-SLR bonds are over 100 basis points and are very attractive.

On the personal finance side, it is essential to be clear on your objectives and time-frames of financial requirements and then arrive at a plan. The underlying bearish sentiment is likely to continue till early 2010. Inflation and interest rates are also likely to fall further. You could wait if you are looking at buying a house as property prices as well as home-loan interest rates are also like go down.

This is a good time to start putting money into high quality income funds. These will give higher returns due to falling interest rates and expected compression in credit spreads.

Out of the money which you have allocated to equities, 30% – 40% should be deployed into equities straight away either directly or though mutual funds with a one- to two-year perspective. General insurance is essential with a regular review of the adequacy of cover. Life insurance should be looked at as a long-term investment. It is never too early to have an adequate term insurance cover. For the short term, mutual funds are a good option.?

•Col. Ajay CEO, http://www.astromoneyguru.com & http://www.majormoney.in

Ajay, based on his understanding of the stars, has predicted the following important events to be expected in 2009. The predictions are made based on a study of the stars and numerology.

Geo-political tensions: The important planet Saturn will come under a retrograde in Leo during January 2009. Jupiter is also in Capricorn. This not a good sign for world peace. Some major geo-political tension is expected especially from January to the second week of February. This very crucial period for Asia. If we go through the past, Saturn always has some impact for India. Saturn was in Leo during Independence. Again Saturn was in Leo in 1977 (Emergency and fall of Indira Gandhi government ). Again, Saturn will be in Leo till the first week September 2009. From January to March there may be problems specially in Britain, the USA, Middle East, India and Pakistan.

Crude oil : As per astro-economics, this is the time for investment in crude oil for short-term trading. Since crude oil has shot up from $15 to $147 in last five years. Countries that benefited the most were the Middle East , and Russia. Major upward movement was seen during 2008. Though the long-term view of crude oil is bearish, but the immediate trend in crude oil is bullish. Based on the stars, I foresee a bullish trend in crude oil in January 2009.

Bullion : Gold is supposed be a safe investment in 2009. As per my calculations, China may surprise the world in gold output. Investors may keep an eye on gold with an expected annual return on investment of 20%-30% if they invest right now.

Inflation: Expected rate inflation should be less than 3.5 % within 2 to 4 month’s time.

GDP growth is expected to be between 7% to 8% in 2009.

Stock market: As per astro-economics, the most important sectors are expected to be print and electronic media, oil and gas, power, heavy engineering, infrastructure, fertilisers and telecommunications. A lot of foreign direct investment can be expected in banking and insurance, media, and the power sector. In 200, my favorite sectors are entertainment and media, power, oil and gas. The Sensex is expected to be between 9,200 and 11,400 points in the next 3 months.

Economy: A very special revolution is expected in the energy sector from 2009 to 2011. Astro-economics says that India is going to bring great revolutions in the field of power and crud. Since 2009 represents the figure 2 and as per financial numerology the figure 2 is represented by Queen of all planets , the Moon.

States to receive most benefits: Rajasthan, Gujarat and Tamil Nadu are on top of the list for 2009.

Awards: Filmstars slated to win awards are be Aamir Khan and Hrithik Roshan. A few Indian writers may hog the limelight.

Cricket: The Indian cricket team may rank either first or second in test and one-day cricket. Mahinder Singh Dhoni may be very lucky for the country.

Politics: Dr Manmohan Singh is expected to be most lucky politician in the world in 2009-10.

•Vikas Agnihotri CEO, Religare Macquarie Private Wealth

?Investors should look in the mirror. I mean, investors should do some honest financial introspection. In the last five years, the Indian equity market have been a roller-coaster ride. The fall has been as steep as the rise, and this volatility has raised many questions. The Indian approach to wealth management is undergoing a metamorphosis and next year would be crucial. We believe that HNIs should adopt a more need-based approach to create wealth rather than a product-based approach.

Investors should look at clearly defining their goals and aspirations and follow a disciplined and structured approach in meeting them rather than indiscriminately chasing past returns.

HNIs in India more often than not have more than one distributor advising them on parts of their portfolio. Distributors, on the other hand, are more product-pushers than advisors in the real sense. The result of all this, is that investment decisions are often inconsistent with financial goals. It is like a doctor advising on overall health when all he can check is a hand or a leg. HNIs should adopt a portfolio-wide approach to financial advice. We believe that investing is just the first step and it has to be followed by regular and periodic portfolio monitoring and rebalancing to make sure it is in tune with the existing market environment. We call this ‘active’ management. In short, HNIs should look for a more structured and disciplined approach of managing and creating wealth in the next year.

A good new year resolution would be to understand your portfolio better. Often, a portfolio is just a mix of investment products bought without precisely defining financial goals or risk and return parameters in mind. In order to avoid falling into the same trap , we propagate a simple approach which we call the ‘PGA’ approach to investments. Investments are classified as ?protection?, ?growth? or ?aspirational? depending on their risk and return potential. Therefore a ‘protection’ asset entails investments that carry the least risk to the capital and are very liquid, a ?growth? asset entails investments that are actively managed and will aim to outperform benchmarks for those asset classes, and ‘aspirational’ assets are high-risk, high-return investments, where capital may be at risk but the potential returns can be quite high. A clear understanding thus helps an investor define his needs better and invest wisely.

Therefore the following simple New Year resolutions would lead to better financial health:

1. I shall choose one personal financial advisor for holistic advice and not product pushers.

2. I shall invest time in understanding my financial goals and spend time with my personal financial advisor.?

•DK Aggarwal CMD , SMC Comtrade & MD, SMC Wealth Management

?The first half of 2009, it appears will struggle to come out of the shadows of the great financial turmoil of 2008 and we at SMC, believe that whatever negative impact of quarterly results and other factors will be there, will happen in the first half of 2009 and there after the market will start looking up, at least in case of the Indian economy, as all the fundamental factors at the macro level are looking good.

Inflation is expected to come down to a comfortable level of about 4%-5%, interest rates are softening and more interest rate cuts are expected to be announced soon, forex reserves are comfortable at about $231 billion, GDP is set to grow at least by 7% and more and more FII inflow will start coming to India by that time. We expect the year 2009 to close with a positive note and investors can expect appreciation of about 20%-25% from the current levels.

The Sensex is presently trading at a P/E multiple of about ten times of forward earnings of Sensex stocks. In our view, many large and mid-cap stocks are available at very cheap and attractive valuations.

It has been observed that at present, Indian investors are quite underweight on equities after burning their fingers badly. Many of them are staying liquid or are have invested in fixed-income instruments, debts and other asset classes. If there is any further dip in the stock prices in the first-half of 2009, then investors should utilise this opportunity to buy stocks at these levels and be rather overweight on equities as we believe that in the long- run, equities will give much better returns than any other asset class as at these valuations even the risk reward ratio is quite favorable.

Stocks from the FMCG sector, oil marketing companies and gas sector, energy sector, newsprint media sector, two-wheeler and automobile sector, and public sector banks are expected to outperform in 2009.

Apart from equity instruments, we also believe that gold as an asset class has also gained popularity as an attractive avenue of investment. Gold is known to provide a good hedge against currency risk and is the best bet in times of uncertainty. Gold has also given good returns in past. Our analysis shows that investment in gold at current valuations will fetch good returns if one invests with a long-term horizon. So, about 10% of one’s funds meant for investment could be allocated in gold.

Investors with a low risk appetite can consider investing in some of the structured products where capital production is guaranteed and returns are benchmarked to the Nifty or gold. They can also look at investing in some near risk-free arbitrage products on offer by brokerage houses.

While investing in equities, it would be pertinent to mention that investors should invest only in fundamentally sound large- and mid-cap stocks which have a low debt-equity ratio and do not have any capex plans for which resources have not yet been tied up and these stocks should be from sectors which are immune from the slowdown of the world economy. Small-caps and illiquid stocks should be avoided. Investment should be made only out of one’s savings and not from borrowed funds. Leveraging through derivatives should be avoided and it is better to route your investments through an expert, mutual funds or a wealth management company than investing directly.?

•Kalpana Shah owner of Tao Art gallery

She talks about what she feels 2009 would hold for the art market. ?The art world is not an isolated market anymore and is connected to the overall financial market. Both the art and the financial markets have entwined fates, and an effect on the financial world always affects world of art. This affect has already been seen- when the art world faced its first slowdown after the over-enthusaistic boom that was seen with the success in our markets. However, 2009 will be steady for the good artists and works.

Though, people will be wise while buying art, those with liquidity will continue to do so. All irrational purchases that took place during the boom will stop and this may be a blessing in disguise for the art world.

Art as investment will still be good in 2009 and will perform better than many of the other asset classes. Modern artists will do well in 2009, as seen in the later part of 2008 when the tide turned back from contemporary to modern. However, even modern artists will see only the good pieces being sold and demanded, as signature sales will no longer work.?

•Ritesh Vohra Director Investments, Saffron Asset Adv

?Over the past few years, the Indian economy has become resilient with domestic demand emerging as the key growth driver. While this provides a buffer against global market dynamics, the effects of the global credit crisis have been felt keenly given the severity of the current crisis and India?s increasing integration with global financial markets. In the short to medium term, we will continue to feel the impact of the global financial crisis, albeit on a limited basis. We believe that the present situation presents investors and end-users a unique opportunity as asset prices readjust and affordability returns to the markets. And that is true of not just the real estate markets, but also of the equity markets. As an investor, I would say that declining asset prices and tight liquidity are bringing in a lot of good properties into the market at attractive prices and the sector is throwing up many interesting opportunities. I would advise a ?wait-and-watch? policy for the right opportunity to buy. This is true of all asset classes. In the last two years, as investors chased a limited number of properties, prices shot up dramatically. As an investor and as an end consumer, I see affordability and correct pricing returning to the market. This could translate into renewed buyer interest, especially as interest rates are slated to decline in the near term. But it may not be as simple a correlation as that, because investor sentiment is something one cannot predict. It may take some time before the end consumer returns to the market.?

•Ramanujan Sridhar CEO, Integrated Brand-Comm & author

?Many of our clients are viewing worldwide developments with great concern. Our future is invariably linked to that of our clients. As we tried to limit risk by not being dependent on any particular sector, we have not been unduly hit. We also expect clients to probably use public relations more than other means of communication and since we have a strong public relations practice, we expect that to contribute significantly to our stability. To my mind, de-risking and not being dependent on any single sector may be key for businesses like ours. As individuals who are investing, I would urge them to stay invested, however difficult that may be to stomach for a few of us. The best strategy would be a systematic investment plan of investments every month so that one can buy at lower levels and wait for the market to improve. But we must remember that there is no rainbow around the corner. It is going to be a slow, painful and hopefully a steady climb upwards.?

•A Balasubramanian chief investment officer, Birla Sun Life AMC

?We would expect first part of the year 2009 to remain challenging. However, the recent drop in interest rates, oil and other commodity prices should begin to play its impact on the real economy in the second half of the next year. Recent measures in providing liquidity in the banking system would change the credit environment in the later part of the year. While it is tough to time the market from an investment point of view, equity as an asset class would provide an opportunity for the long-term investor. Falling inflation and a benign interest rate policy environment should also retain the current opportunity of investing in income funds in the coming year too.?

•Rohtas Goel CMD, Omaxe

?As they say that there is a silver lining around every cloud, I am sure that year 2009 will be much brighter and beneficial for the real estate sector as compared to the current year. The economy will see a rebound and steps taken by the government to revive it will bring in the much desired results by giving an upward push to the sector. Tax benefits and reduction in interest rates are bound to show their impact on sales and bring back customers to the market.

The real estate sector is heading towards being favourable for both end-users and investors, since they can crack the best deal at this time. We believe that the real estate sector still holds the prime importance as the most lucrative investment option on a long term basis and will continue to hold the same position.?

•Sandeep Kothari fund manager, Fidelity Mutual Fund

?We go in to 2009 with depressed investor sentiment due to the turmoil in the credit markets and apprehensions about the global economic slowdown. On this backdrop, markets will continue to be volatile next year too. But, as a largely domestic-demand driven economy and aided by economic stimulus packages, India is likely to be less impacted by the global growth deceleration, certainly to the extent that it will be one of the few economies that will continue to grow next year, though at a slower pace. On the markets front, valuations are at the lower end of the trading range and negative expectations appear to be priced in. But we may yet see a possible undershoot on profits and valuations in the short term. We are beginning to see long term value emerge and 2009, more than ever, will be a year for stock picking. We will be looking for companies with strong balance sheets, healthy cash flows and quality management. Even as we watch the economy very closely, it is important to remember that markets generally turn in advance of economic fundamentals.?

•Sameer Kulkarni fund manager, fixed income, Fidelity Mutual Fund

?After a tumultuous year when global financial markets froze and lending virtually came to a standstill, the coordinated responses of various central banks have now begun to make an impact. In India, liquidity in the system has improved recently after the steps taken by RBI. Credit growth, however, remains slow even as inflation looks less threatening than what it was some months ago. Credit disbursals may begin to look up after another round of rate cuts.

The RBI has had to make sharp policy changes as its focus has shifted from controlling inflation to stimulating growth, cutting interest rates in response to the economic slowdown. We expect a softer interest rate bias for a better part of next year, certainly as long as inflation remains within the RBI?s comfort zone and economic growth does not show an uptick.

This will lead to the yield curve coming off further from current levels, but we will have to watch for government borrowing which can push up yields. Fixed-income markets will continue to be volatile over the next few quarters, sensitive as they are to global events.?