Got 10K to invest next year? Look at 2007 returns

How would you invest $10,000 in the coming year?

Each year, we ask a panel of investment experts that question.

Amid relentless volatility, all passed the test in 2007. The recommended portfolio mix from every participant last December produced an increase over the past 12 months.

At the top, each gaining more than 20 percent, were Sam Stovall of Standard & Poor's Corp., Elaine Garzarelli of Garzarelli Research Inc. and Sheldon Jacobs of the No-Load Fund Investor newsletter.

Some of that trio's hot picks included Western Digital Corp. (WDC), L3 Communications Holdings Inc. (LLL), iShares MSCI Emerging Markets Index (EEM) and T. Rowe Price New Era Fund (PRNEX).

The only serious turkey tucked in one of their portfolios was stock of Merrill Lynch & Co. (MER), a Garzarelli selection. The brokerage giant has been singing the subprime blues, but that one fooled a lot of people.

Our pundits for a second consecutive year are spreading their bets because there are so many economic and political wild cards in the coming presidential election year.

For diversification, they are increasingly recommending exchange-traded funds, known as ETFs, which mirror various indices by holding baskets of stocks. These require transaction fees because they're traded on exchanges, but have no minimum investments or redemption penalties.

From the crystal ball of new and returning experts comes advice for the mythical $10,000 in 2008:

• Sheldon Jacobs, editor of The No-Load Investor, Irvington-on-Hudson, N.Y.: "I'd stick with the winners and do the same thing I did last year. Split the $10,000 between T. Rowe Price New Era Fund (PRNEX), which I think has a number of years to run yet, and PowerShares FTSE RAFI US 1000 (PRF). The market next year will be somewhat positive, but not huge."

• Richard Cripps, senior managing director of EquityCompass Strategies for Stifel, Nicolaus, Baltimore: "My stock selection for the $10,000 is stock of Men's Wearhouse (MW), which has benefited from the consolidating men's apparel sector. Over the long term, it will strengthen its position in the men's apparel and tuxedo rental businesses, improving profitability."

• Elaine Garzarelli, president of Garzarelli Research, New York: "Put 25 percent in iShares Dow Jones Transportation Average (IYT), 25 percent in Financial Select Sector SPDR (XLF), 25 percent in iShares MSCI Emerging Markets Index (EEM) and 25 percent in Consumer Discretionary SPDR (XLY)."