History will remember 2008 as the year all financial assets, except for government bonds, plummeted by tens of percentage points. This has been a terrible year for investors the world over. 2009 will be no picnic, either.

Economies around the world are sinking into recessions one after the other, and investors are wary of risks. People used to look for the highest profits, but now all investors want is not to lose, and only afterwards to gain a few percentage points on their liquid assets.

When TheMarker asked investment experts for advice on the most promising financial instruments for 2009, most recommended the safest investments of all - short-term, index-linked government bonds or corporate bonds with the highest ratings. Still, there were a few experts who advise a slow, cautious return to assets such as shares and commodities, whose enticing prices and high profit potential are bound to eventually take off.

"There are investment opportunities in commodities, oil shares, industrial metals and gold," says Gideon Ben Nun, CEO at Shekel AGIO. "One needs a little patience and strong nerves to invest in these avenues, but such investments also have a risk management component. Alongside an investment in commodities, I would advise investing in medium-term index-linked government bonds and stay away from long-term shekel-linked bonds.

"Oil and industrial metal prices - copper, aluminum and quartz - plunged 70% in five months," notes Ben-Nun, "and we're starting to see a decline in the supply of metals. Mines around the world are downsizing their operations and waiting for prices to rise again. There have been similar cutbacks at oil fields where oil production is costly.

"Geopolitical tensions are also likely to bolster commodities due to the dominance of the Organization of Petroleum Exporting Countries in setting global oil inventories. Metal prices usually fluctuate with the price of oil and geopolitical tensions usually spur weapons production and boost the prices of metal production and transportation.

"I expect gold to go back up to its price of about a year ago - $1,100 an ounce - because low interest rates will result in capital losses on U.S. government bonds and geopolitical tensions will trigger a run on gold, pushing its price upward.

"The risk of inflation in Israel is also higher than most people think. Despite lower demand, imports will become more costly if the shekel weakens against the dollar. Manufacturing companies in Israel and around the world are cutting back production too much and the resulting shortages will lead to price hikes in certain areas. Another factor is the price of commodities, which are at record lows and will start climbing in 2009. Medium-term index-linked government bonds can protect investors from inflation," concludes Ben-Nun.

"Investors do not have to stick with one model," says Zeev Milbauer, CEO at IBI Investment House. "A portfolio can be tailored for a range of dynamic possibilities that are subject to change. The best example of this is portfolio diversification, into long-, medium- and short-term instruments that can be adjusted periodically in keeping with the economic reality.

"At present," continues Milbauer, "any view of the medium and long term must obviously include assets with a high risk/reward profile, such as corporate bonds and shares; perhaps even some shares in companies in the mid-cap index which have the greatest opportunities for profits. Inflation is also a factor that must be considered when choosing medium- and long-term investments, because at some point it will come back.

"In the short term, most of the yield will be from short- and medium- term government bonds, as most investors are switching to solid investment instruments. A look at all the various sectors reveals that we are big fans of infrastructure, as hefty government budgets are due to be channeled to such projects. The government is also likely to invest in real estate, clean-tech and high-tech. The trick in the short and medium term is to identify the good companies in each sector," concludes Milbauer, "rather than identifying which will be the leading sectors."

"The global recession and the credit crunch have prompted central banks to reduce interest rates sharply," says Altshuler-Shaham CEO Gilad Altshuler. "As a result, we are now seeing capital gains from negotiable bonds. We recommend bonds in developed markets. Since the yields on government bonds in those countries are too low, we recommend 10-year corporate bonds with high ratings.

"Our preferred choices are Wal-Mart, Coca-Cola, Bank of America and J.P. Morgan. These bonds are trading at a 2.5%-3.5% spread above U.S. government bonds.

"Locally," adds Altshuler, "we recommend investing in 10-20 year shekel- and index-linked government bonds, which are trading at real-term yields of 5%-5.5% and 3.4%, respectively."

"2009 will be a year of deep recession," says Yoram Hadar, CEO of Africa Israel Investments, "with deflation and a continued exit from risk investments such as shares. Since the Israeli market is small and export-oriented, most investment instruments will be highly volatile. For this reason we recommend a diversified portfolio of solid investments with shekel-linked government bonds topping the list due to the anticipated deflation. We believe that in the next few years inflation will be significantly lower than previously forecast. The Bank of Israel will therefore keep interest rates low, making long-term shekel-linked bonds with 5% an attractive investment.

"The main risk in shekel-linked assets, especially long-term investments, is inflation, although we are not afraid of inflation caused by higher demand around the globe, but rather due to a higher budget deficit and depreciation in the foreign exchange rate of the shekel. As long as the deficit is under control, the government's costs in raising funds will be low, due to the high demand for low-risk assets. Considering the uncertainty of these eventualities, we recommend maintaining foreign currency equivalent to 10%-15% of shekel investments.

"Our diversified portfolio," continues Hadar, "will consist of about 70% shekel-linked government bonds, 10% foreign currency, and 20% index-linked corporate bonds from companies with very strong cash flows, such as Bezeq, Partner Communications, Strauss and Bank Leumi. We also recommend short-term (1- or 2-year) corporate bonds, which will provide greater yields than similar government bonds."

"The global financial crisis will continue in 2009," says Giora Zarechansky of Direct Investment House. "The government budget deficit will rise, as will unemployment in Israel. The economic slowdown will lead to a sharp decline in consumer consumption and inflation and the Bank of Israel will continue lowering interest rates.

"Israel's economic growth will be 0% in 2009 and the budget deficit will be about 3.5% of the gross domestic product. Inflation will be -1%, and the central bank will lower interest to 1.5%. Next year will continue to be a difficult year for stock markets in Israel and around the world, so we recommend a defensive portfolio with low exposure to shares.

"Since interest rates and inflation are so low, we recommend medium- and long-term shekel-linked government bonds. Despite the inherent risk in corporate bonds, investors should consider the bonds of stable companies with high cash flow from sectors that are less impacted by the economic slowdown, such as communications and food.

"As for shares, the safest investments would be in communications, food, industry or service companies. Infrastructure companies could also be a good choice in 2009 as the government has declared its intentions to increase infrastructure budgets. Since the epicenter of the economic crisis is in the United States, we recommend relatively low exposure to the dollar.

"The main supermarket chains, such as Super-Sol, and the big food companies, such as Osem and Strauss, are likely to weather 2009 with minimal damage. The recommended communications companies are cellular service providers Cellcom, Partner and Bezeq, as demand for communication services is less sensitive to the slump in consumer consumption. In the industries and services sector we recommend shares in companies such as American Israeli Paper Mills (Hadera Paper), Paz Oil and Delek Israel; and companies worth watching in the infrastructure sector include Ashtrom Engineering & Construction , Ortam Sahar Engineering , Electra, Danya Cebus and Minrav Holdings.

"2009 is an election year," notes Zarechansky, "and it will take time to form a government and approve the budget. Government investments in infrastructure could be delayed significantly. We therefore advise waiting to see if all the talk of investments in infrastructure actually materializes. It is better to invest in companies that are likely to win a government tender, and not in just any company in that sector."