Louis' own Ferguson-based Emerson as well as Agilent, a maker of testing equipment and power supplies. Terril also thinks basic materials are a good play during the recovery. Creve Coeur-based Arch Coal and St. Louis-based Peabody Energy are on his list.
Stay away from financial companies, says Greiner. They're in for lean times as they dig out of their loan problems. Expect a "forced march into consolidation" with profit margins squeezed hard as the government demands deeper capital cushions.
The stock market will stagger and lurch because the economy will be growing unevenly as consumers and businesses dig out of debt. "When you neuter the consumer, and that's 60 to 70 percent of the economy, that's a huge headwind," says David Rolfe, chief investment officer at Wedgewood Partners in Ladue.
Gary Thayer, senior economist at Wells Fargo Advisors in St. Louis, think the economy will shrink by 2.7 percent this year, then grow by a relatively modest 2.1 percent next year.
Rolfe is betting on big technology companies with "bulletproof balance sheets," lots of cash and a knack for developing new products. He likes Apple Inc., with its new, cheaper iPhone; Google; and Qualcomm.
Health stocks deserve a look, despite the uncertainty in Washington over health reform, says Rolfe. Express Scripts, based in north St. Louis County, should do well no matter what happens, because it helps hold down the cost of prescription drugs.
Foreign stocks are a better play than domestic ones, says economist Thayer. Emerging markets have been on a tear of late, with the average third-world stock fund up 35 percent this year as of Wednesday.
They're high-risk and often volatile, but may be worth a small corner of a portfolio, he says.
Even Europe should grow faster than America, Thayer says. He also expects the dollar to decline gradually over the next decade, which gives an added boost to foreign stocks.
This market poses an unusual problem for mutual fund investors, says Charles Rice, of Rice Money Management in Clayton. Most mutual funds hone to a fixed strategy and geography -- be it domestic or foreign, small-cap or large, growth or value stocks. Over long periods, the larger funds tend to perform a little differently than unmanaged stock indexes, he notes.
Rice thinks the future is too uncertain to confine fund managers to stocks or bond, or a particular part of the world. So, he's leaning toward "World Allocation" funds. Such funds invest both in stocks and bonds, domestic and foreign, shifting money around the planet as opportunities appear.
They've had only middling performance recently; up 7.2 percent year to date but down 18 percent over 12 months. Morningstar, the mutual fund rating company, likes BlackRock Global Allocation and Ivy Asset Strategy.
BONDS OUTPERFORM
The great meltdown of 2008 shattered the illusion that stocks always outperform bonds over the long haul. If you had invested in an index fund following the S&P 500 10 years ago, you'd have been 17.5 percent poorer by the beginning of this month. If you'd put your money in an index fund following the Barclay's U.S. Aggregate Bond Index, you'd be 74 percent richer. Will the future favor bonds or stocks?
Probably stocks, says Mario DeRose, bond strategist at Edward Jones, the giant Des Peres-based brokerage. "The last 10 years was an unusual period of time," he said. "I'd definitely have good equity exposure."
The bond market has turned topsy turvey over the past few months.
