Where to Invest Now: What the Experts Say

With recession fears looming and a dismal 2008 market performance so far, CNBC asked the experts how investors can best prepare their portfolios.

Playing Defense

“With sentiment as poor as it is and with as much fear as there is out there, it pays to be somewhat defensive. I still like the commodity and energy names. Energy companies are going to report good fourth quarter earnings, they’ve got the leverage, strong overseas growth. Consumer staples and healthcare, a nice place to hang out right now, to hideout while sentiment improves. But again, second half of the year, maybe even sooner, most financial names are going to be very, very attractive.”

David Spika, WHG Funds Investment Strategist

Searching for a Bargain

“If people are waiting for the general market to be a rising tide in the near term, they’re not going to see it, but there’s individual sectors, you know when you start to look at some of the healthcare area, especially in the service and device area, when you look at natural gas in particular, the ratios there to oil are still very, very positive, and the obvious being in the consumer staples area, there’s some places to buy some bargains, and then you start to look probably in the next quarter or two to do some bottom-picking in financials.”

Dan Genter, RNC Genter Capital Management President & CEO

Investing in a Slowing Economy

“Where the strength in U.S. profits are, are in those industries that are leveraged as overseas investments. So our portfolio positioning is overweight slightly toward equities, but definitely concentrating in emerging market equities, and we still think that the overall commodities complex is in a bull market. You might have to be careful about energy, you might have to be a little careful about gold, but things like agricultural products and industrial metals should continue to do well based on strong world growth, led by emerging Asia.”

Benjamin Pace, Deutsche Bank Private Wealth Mgmt. Chief Investment Officer

Healthy Choice for Your Portfolio

“Most recently we’ve been buying some of the healthcare names that we think will do very well through this short-term concern and uncertainty about the economic outlook and what the Fed might do.”

Eugene Peroni, Advisors Asset Management Senior Vice President

The Case for Telecom

“We think the last thing the consumer is going to give up is his on-demand TV and his Internet connection, so I think if people are looking for problems in the economy in the telecom business, I think they’re looking in the wrong place.”

Charlie Smith, Fort Pitt Capital Chief Investment Officer