The major U.S. stock market indices experienced their worst pre-Presidential election year since 1987 over the past twelve months, and my models indicate that stocks in general will continue to perform poorly during the first half of 2008.

However, my models suggest that patient investors who are willing to sit on the sidelines (in cash) for the next few months, or who are comfortable in selling short stocks, will be presented with some tremendous investment opportunities in the second half of the coming year.

As I've stated repeatedly during the past few months, my models indicate that economic growth in both the U.S. and numerous other regions of the world will slow considerably during the first half of 2008 and corporate profits will decline significantly.

If my models are correct, I expect the stock market bears to dominate the news headlines during the first quarter of 2008 and for even the most bullish money managers to throw in the towel and admit that a bear market has begun. I therefore expect stock prices in general to fall precipitously during the first quarter of 2008.

However, once financial institutions clean up their balance sheets (by writing down the value of assets related to the subprime mortgage meltdown), and even the stocks of financially-sound companies are beaten down to ridiculous levels, my experience suggests that astute bargain hunters will begin to bid up stock prices during the second half of 2008.

Although I expect economic growth in China and India, which rely heavily on the U.S. for exports, to slow during the first half of next year, I expect both of these countries to continue to grow at healthy rates over the coming years.

Chinese and Indian consumers, which comprise more than a third of the world's total population, have experienced the fruits of capitalism and there's no turning back. I therefore expect both of these countries to continue investing heavily in building their basic infrastructure, which will require lots of coal, oil, and steel, as well as other energy products and industrial metals.

I therefore expect commodity prices in general to rebound later next year, after continuing for fall during the first half of 2008 as a result of declining demand from the U.S. construction market.

I also expect the Australian, Brazilian and Canadian economies to pick up steam during the latter part of 2008, as each of these countries are large suppliers of energy and industrial metal products.

Many readers may have concluded that I'm one of those constant bears, think again!

Rather, I'm an opportunist who strives to earn profitable investment returns during both bull and bear markets while always focusing on managing downside risk.