From the January 2009 issue of Investment Advisor • Subscribe!

Asset Allocation

Behind the Numbers, with David Kelly

"The key to 2009 is whether an Obama stimulus package can ignite consumer rebound," says Kelly, the chief market strategist for JPMorgan Funds, adding that he believes Obama's influence on the markets will be a positive one. He also expects that the President-elect will cut taxes for all Americans in 2009. As for the recession, Kelly doesn't believe it will be over anytime soon, but he does expect to see positive GDP growth in the fist quarter of 2009. He notes that Financials and Healthcare will show greatest appreciation in the New Year, while Consumer Discretionary and Consumer Staples will perform worst in 2009. "Right now, I would be invested in some of the very things that have gotten beaten up recently," he adds. "Eventually the economy will turn and markets will stabilize and these will do the best." As for what worries him most, Kelly says its deflation in 2009. --Kara P. Stapleton

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