This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.

For those comfortable with a short position, Mike Larson looks to ProShares Trust Short Financials (NYSE: SEF) as his top 2009 pick. In Money and Markets, he looks at the inverse ETF.

"ProShares Trust Short Financials is an inverse exchange-traded fund. The ETF is designed to rise in value when the underlying index it references, the Dow Jones U.S. Financials Index, declines.

"As of September 30, the Dow index was weighted 42.5% in banks. General financial firms were the next highest weighting at 23.4%, followed by Real Estate Investment Trusts at 13.4%, non-life insurers at 13.1%, and life insurers at 6.9%.

"The top companies in the index were JPMorgan Chase (8.1%), Bank of America (8.1%), and Wells Fargo (5.9%).

"When I evaluate the underlying fundamentals in the financial sector, I find myself ready to back up the truck," notes Louis Basenese, editor with The Oxford Club. Here he looks at a financial ETF.

"Recently GE shocked the world when it missed earnings expectations by seven cents because of difficulties in its financial services business, the seventh largest in the United States. Then Wachovia posted a worse-than expected $1.1 billion loss.

"Next was Washington Mutual which reported a $1.14 billion quarterly loss, worse than expected. And Merrill Lynch had a quarterly loss of $1.96 billion, also worse than expectations.

"Not to be outdone, the bottom of the line-up, regional banks (Comerica Inc., KeyCorp and PNC Financial Services Group) also struck out, reporting worse than expected first-quarter net income and/or mounting credit-loss provisions and net charge-offs.

"Remarkably, the Financial Select Sector SPDR (ASE: XLF) has barely budged. Indeed, its 15% higher than where it was when Bear Stearns collapsed.

"One of our favorite areas going forward for the next 1-5 years are the financials at these levels," says Daniel Frishberg, editor of TheMoneyMan Report and host of BizRadio. Here he looks at an ETF for the sector.

"The global growth story isn't going away and there are a ton of deals that need to be financed, trading volumes are high, private equity is still huge, and it takes big financial institutions to keep all of this running. They are really the fuel that keeps the (globally) economy expanding.

"Financials got caught up in the easy money craze by creating and buying risky derivatives. Many of the CEOs have already been fired and the books are being cleaned up by huge write downs. We think over the next couple of years, financials could actually gain the most on a return basis.

"This has been an area we have pretty much avoided or had very little exposure to. We continue to hold Citigroup (NYSE: C) in our capital gains portfolio and will average down at some point in the near future. But, for today, we want to buy the industry and dip our toe.