Investors should stay away from financial stocks and be cautious about commodity and material investments as well, according to one money manager.
"This credit unwinding has a lot further to go," Jack De Gan, chief investment officer of Boston-based Harbor Advisory told CNBC. He recalled Goldman CEO Lloyd Blankfein's observation that the low point in financial securities won't be reached with the markdowns, but with the liquidations, which he thinks are still to come.
He made an exception for Berkshire Hathaway , his firm's largest holding, which is 25 percent higher than it was in August, when news of the credit crunch started to break.
De Gan is also reluctant to venture into larger industrials. "If credit does contract the way we think it will, the financials will have to contract their balance sheets, and that will slow the general economy," he said.