For most investors, the best thing about 2009 is that it isn't 2008, as one analyst pointed out. CNBC experts share their predictions for the year to come as the world goes through the worst recession in generations.
Banks Will Start Lending
With interest rates racing to the bottom and effectively hitting 0 percent in the United States, banks will take more risks and start lending the money around. "I think they will be forced to do that in 2009," Kevin Sullivan from Clariden Leu said. This may happen in the first quarter of the year, when banks will start buying more corporate bonds.
Hope Coming from Obama
President-elect Barack Obama takes over on Jan. 20 and investors' hopes are pinned on his promises to improve the ailing economy. "The Obama administration … talking about wanting to do something to create 3 million jobs, I think there's going to be a lot of excitement, possibly, around what he can do. I think that's going to be encouraging," Edward Lewis, partner at Atlantic Equities told CNBC. But next year will be tough for emerging markets, Lewis added.
The Markets Want to Go Higher
"The good thing is that the markets are holding support. This time of the year, a lot of people are standing on the sidelines. The markets want to go higher, the technicals are indicating that, at least," Sandy Jadeja, technical analyst from ODL Securities, told CNBC.
Low Rates for a Long Time
"I think the worst of the global recession is still to come," Lena Komileva, chief economist at Tullett Prebon, said. "There's a commitment to a prolonged period of low interest rates. I do expect a very cautious, slow return to high-quality yield in 2009."
Getting Value from Debris
Among the debris from the "disaster" that will strike the economy in the first half of next year, investors will be able to pick some deeply discounted, valuable stocks, Marc Faber, editor and publisher Gloom, Boom and Doom Report, told CNBC. "I think that some value has been emerging. There are pockets of value in the market," said Faber, who believes markets bottomed out in November 2008.
An 'Awful Lot' of Bad News Is Priced In
"We do think there is an awful lot that is priced into equities and credit, and I would single out investment-grade credit," Richard Urwin, head of asset allocation economics, BlackRock, told CNBC. "Most people that you speak to believe that investment-grade credit is pretty cheap."
Biggest Economy to Recover at end-2009?
The US economy won't stage a recovery until the end of 2009, Malcolm Polley, CIO at Stewart Capital Advisors, told CNBC Monday. Justin Urquhart Stewart from Seven Investment Management joined the discussion.
Pick Stable Names, with Little Debt
Short-term there is a chance of a New Year rally but downside potential still exists for stocks next year, Andreas Nigg equity strategist at Vontobel told CNBC. "Long term though we're still looking at a lot of debt that has to be unwound, and we're not quite sure how that's going to unfold. The bulk of our portfolio is going to be in high-quality names," Nigg said.
Telecom Stocks' 'Deep Value'
Sharp declines in the price of telecom shares have seen them move into "deep value territory," Michael Kovacocy from Daiwa Institute of Research Europe told CNBC. Kovacocy particularly likes Spanish company Telefonica.
The Next Bubble: Bonds
The bursting of the credit bubble is being replaced by a government-bond bubble, Marc Ostwald from Monument Securities told CNBC Monday. Justin Urquhart Stewart from Seven Investment Management joined the discussion.