The economy will continue to be under pressure from rising unemployment and declining industrial output through the first half of 2009. Unemployment will reach 8.5% to 9% by yearend.
The fixed-income market — particularly the distressed corporate-bond area — offers the strongest opportunities in the year ahead, he said.
Ms. Lassus, whose organization represents fee-only advisors, predicted that the economy will begin to rebound between the latter half of the summer of 2009 and into 2010.
Market predictions have little value for Mr. Lamb, but he is willing to hazard a guess that later this year, "we may see a glimmer of hope that the world is not going to zero." At that point, a vigorous rally could ignite, he said.
Despite the stress experienced by the financial services industry, now is not necessarily the time to abandon capital-intensive technology investments, Mr. Kumar said.
The effects of government action domestically and globally will be felt in a positive manner, with the recession ending in the second or third quarter, Mr. Klosterman said.
Mr. Kleintop predicts that the U.S. economy will emerge from the recession in the second half of 2009. He also expects the economy to experience a deflationary period earlier in the year, leading to the return of inflation toward its end.
Mr. Slott is convinced that taxes will go up in 2009 and believes that advisers should work with eligible clients to help convert individual retirement accounts to Roth IRAs.
"A big transition will be [occurring] in the international marketplace," said Mr. Schreiner, who manages money using probability-based measures and technical tools, and also uses outside managers who employ quantitative strategies.
All signs point toward a brighter 2009, according to Mr. Richardson, with one caveat. "It's almost too easy to predict the stock market is going up in 2009," he said. "Of course, I'm assuming the success of the government's efforts."
Although Mr. Regan isn't optimistic about the economy, he does foresee a strong year for wealth management companies who cater to high-net-worth investors.
Rapid economic recovery isn't likely during 2009, and American investors will have to grapple with a major crisis of confidence.
The markets will probably rebound in 2009, but it's not a sure thing, Mr. Molumphy said. An "extended or protracted" economic recession could delay a market recovery until 2010, he said.
The best part about the year ahead will be that it will only last 12 months, Mr. Malkiel said.
Over the next few months, there will be a lot of focus on the ongoing effects of the credit crisis and regulatory reform. "At the same time, we want to continue to focus on the core investor protections issues."
The economy will continue to weaken, but the financial markets will look at the steps taken by the federal government and react in a positive fashion, Mr. Vahanian said.
"It's going to be a tough year for advisers. They will experience real pressure in profitability and in attracting clients, but I think we will see that the strong firms will emerge even stronger, while some of the weaker firms will merge."
The country is about to enter "an era of sustainability" that will affect both the economy and the financial markets.
As the art world's next major round of auctions begins this month, buyers and sellers will encounter a market as depressed as that for stocks and real estate.
