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

Each year we toss that question across the plate to a panel of investment experts.

Knocking the cover off the ball for a second year in a row was Richard Cripps, chief market strategist for St. Louis-based Stifel, Nicolaus & Co.

His recommendation to stash the entire 10 grand in American Eagle Outfitters (AEOS) last year produced a gain of more than 100 percent. His Omnicare Inc. (OCR) pick the previous year rose 66 percent.

Our pundits were extra cautious last year, which resulted in no serious clunkers. Nonetheless, energy stocks didn’t perform as well as some expected, and the economy did better than predicted.

The experts for 2007 predict a bouncy but generally upbeat stock market, mostly because stocks tend to shine in the third year of any presidency, and George W. Bush will be in year number three of his second term.

Large-cap stocks are expected to lead. In addition, more experts are recommending the increasingly popular exchange-traded funds, or ETFs, which hold baskets of stocks but are traded on exchanges with no minimum or redemption penalties.

Here’s advice for that mythical $10,000 in 2007:

[box] Cripps of Stifel, Nicolaus: “The market rally will continue, taking the Dow Jones industrial average to 13,000 in the first quarter before a ten percent or more correction in late spring and summer. Invest the $10,000 in stock of Coventry Healthcare Inc. (CVH), a managed-care organisation. Concerns about Medicare reimbursement and changing political winds in Washington have caused investors to shy away from Coventry despite its solid outlook for growth and attractive valuation.”

[box] Sam Stovall, senior investment strategist for Standard & Poor’s Corp. in New York: “Historically, the third year of a presidency has produced an average gain of 18 percent, no matter whether the president is Republican or Democrat, the Congress unified or divided.”

His consumer cyclical choices are Consumer Discretionary SPDR (XLY) or Coach Inc. (COH). In industrials, there’s Industrial Select Sector SPDR (XLI) or L3 Communications Holdings Inc. (LLL). In technology, there’s Technology Select Sector SPDR (XLK) or Western Digital Corp. (WDC).

[box]>Sheldon Jacobs, editor, The No-Load Fund Investor, Irvington-on-Hudson, New York: <$>“In addition to the presidential cycle, stock valuations remain reasonable despite their big run-up. I’d divide the $10,000 between T. Rowe Price New Era Fund (PRNEX), a natural resources fund that is a ‘pseudo-commodity’ play, and the PowerShares FTSE FAFI US 1000 (PRF), an ETF weighted to each stock’s fundamentals rather than its market capitalisation.”

[box] Elaine Garzarelli, president, Garzarelli Research Inc., New York$>“I’d put $2,500 of the $10,000 in 2007 into Nasdaq-100 Trust Shares (QQQQ) and $2,500 into iShares MSCI Emerging Markets Index (EEM). Then I’d put $2,500 into iShares Russell 2000 Index (IWM) and $2,500 into Merrill Lynch & Co. (MER).”

[box] Paul Nolte, investment director with Hinsdale Associates, Hinsdale, Illinoi<$>“The key is the impact of housing on consumer. We’re playing a defensive game in a more volatile year. Divide money between bonds, with the ten-year bond having a shot at going below four percent next year, and stocks of Anheuser-Busch Cos. (BUD), Bristol-Myers Squibb Co. (BMY) and American States Water Co. (AWR).”

[box] Jeffrey Saut, managing director for investment strategy, Raymond James & Associates, St. Petersburg, Flori <$>“Invest it all in ETFs because they’re more efficient for diversification. Then select sectors with wind at their back, such as water through PowerShares Water Resources (PHO) and other ETFs in aerospace/defense, financials and technologies.” Examples are PowerShares Aerospace & Defence (PPA), Vanguard Financials ETF (VFH) and Technology Select Sector SPDR (XLK).

[box] Alfred Goldman, chief market strategist with A.G. Edwards & Sons in St. Louis: “The economy is already slowing to a little below average, with corporate earnings slowing down to their historic norm. The overall market is reasonable, and the Fed will lower interest rates in the spring. In this mature market, buy stock, but selectively. Stick with larger-cap quality growth companies, which have attracted the most interest lately.”

[] Steven DeSanctis, director of small-cap stock research for Prudential Securities in New York: <$>“I’m concerned about small caps because of seven years of good performance and expense relative to large caps. Lean toward large-cap growth, especially technology and health care. Earnings are stable in health care despite bad headlines. Exciting things are happening in technology, such as the Vista launch and gaming stocks. These stocks are very affordable.”