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Financial Experts Look Ahead To 2009

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Jan 2, 2009 8:23 pm US/Eastern

Financial Experts Look Ahead To 2009

Reporting
Jon Delano
PITTSBURGH (KDKA) ― Every year, two well-recognized financial advisors join Money Editor Jon Delano on the Sunday Business Page -- both to tell us what happened during the past year in the market -- and to predict the future.

After last year's disastrous performance in the stock market -- which neither advisor correctly predicted -- no surprise, they were both more cautious and pessimistic in their predictions for 2009.

Nobody really predicted how bad a year 2008 would turn out to be for anyone with money in the stock market.

"The year started out exactly as I had predicted. Energy was way up. Currencies were way up. All of a sudden in July, it basically started to change," acknowledges Lou Stanasolovich of Legend Financial Advisors.

"There were things that were going on behind the scenes that people couldn't quite grab a handle on," adds Andre Weisbrod of Staar Financial Advisors. "I'm talking about the housing situation, the way lawmakers had forced banks to make subprime loans, what was happening in the subprime loan market. None of that was quite on the surface."

Bothe Weisbrod and Stanasolovich -- two highly successful financial advisors -- a year ago predicted market losses for 2008 -- but nothing near the 34 percent drop in the Dow or the 38 percent drop in the S&P that decimated most of our retirement funds.

"We've never seen systemic risk like we have right now since the 1930s," says Stanasolovich.

So will our 401k's, IRAs and stock funds do any better in 2009?

"We're going to see large swings of 20 to 30 percent, just like we did back in the 1929 to 1932 period," notes Stanasolovich. And if the economy worsens and significant deflation sets in, "I think we're going to be down somewhere between 25 and 40 percent again."

Weisbrod says the market could drop another 30 percent, but he also thinks there could be a turn-around -- a best case scenario.

"Things sort of settle out the first half of the year, and by the second half we could have a huge jump," he said. "So the upside is probably around 40 percent, and right now I'm on the line in the middle. I don't know which way this is going to go." 


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