Historically, so-called "sin stocks" have held up exceptionally well in bear markets. Demand for alcohol, sex, gambling, cigarettes and firearms tends not to ebb and flow as much as the broader economy.

Historically. But over the past year, the USA Mutuals Vice Fund (VICEX) is off about 42% -- slightly worse than the S&P 500. The fund's manager Charles Norton told BusinessWeek that while casinos have been weak, many of the firm's other vice-oriented holdings have been beaten down unfairly: "The fundamentals don't really matter in this current market."

That would certainly seem to be the case so far: When the market's down 42%, any long-only fund will be getting its stuff handed to it. With Las Vegas at the epicenter of the foreclosure mess, it's not surprising that heavily leveraged casino companies are underperfoming. And casinos are not really as recession-proof as other forms of gambling because the upscale ones especially are as much about tourism as gambling. The more affordable state lotteries have seen their sales decline but not by that much.

As for sin stocks, it might be too late for investors to start buying them: If the stock market is poised to rebound, recession-resistant companies will tend to be the laggards.

But if the stock market goes down another 40% in 2009, it'd probably be good for investors to stock up on Jack Daniels: the drink, not the stock.

For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"The market is looking increasingly fragile -- and our top pick for 2008 is a stellar investment that has all the makings of a bear-market killer: The Vice Fund (VICEX)," says Eric Roseman, editor of Commodity Trend Alert.

"This fund will do well as long as people continue to drink, smoke and gamble. The fund might not be the most wholesome investment in your portfolio, but it sure earns a big score for making bundles of dough from many industries currently shunned by investors and portfolio managers.

"And best of all, as the economy contracts, stocks in its highly concentrated and aggressive portfolio usually grow their corporate earnings while the broader market corrects. Bull or bear, it doesn't matter. The Vice Fund can generate profits in any economic environment -- provided people continue to gamble, drink and smoke.

"Launched in 2002, the Vice Fund is advised by Mutual Advisors, Inc, a small outfit with $177 million under management. But its size is actually highly advantageous to investors because of its ability to quickly enter and close trades and buy some companies that might be thinly traded.