Light volume in a shortened holiday trading week is as good a way as any to close the books on the bear market of 2008. Let it go out with a whimper not a bang. After all, investors casting their eyes toward 2009 have enough to worry about already. With the market down 40% this year, surely there are bargains to be had, but sifting through the rubble that is the S&P 500 remains as challenging as ever.

As we noted recently, allocating back to the developed world and U.S. equities in particular looks to be the smart way to set up your portfolio for 2009. How you weight that domestic portfolio, though, is just as important. After all, sussing out the winning sectors from the losers will be essential if you want to participate in any eventual market recovery.

Citigroup (C) Citi Investment Research shop sees the S&P 500 hitting 1,000 in the next 12 months or so. That would represent a healthy 14% gain over current levels. (Of course that's nowhere near to making up for this year's rout, but it's better than incurring further losses.) Achieving that nifty return, however, will require some pretty careful sector weighting, Citi says. (See chart.)

By dint of its own research and surveys of the Street, Citi s sector favorites include financials and technology, said Tobias Levkovich, Citi's chief U.S. equity strategist, in a Dec. 18 report. While financials should benefit from expectations of a broader market recovery, the tech sector should get a boost from its cash-rich, debt-light balance sheets.

Levkovich could very well be right. Unfortunately, we've heard versions of this story especially for tech many times before and it s failed to pan out all year. If nothing else, 2008 has been a long, gruesome reminder that just because stocks look cheap doesn't mean they can't get cheaper.

That s thrown the old notions of cautious allocation to the wind. Citi, for example, is underweight consumer staples and utilities, but overweight on health care a core defensive play. And yet the past year has shown that with some notable exceptions Wal-Mart (WMT) and McDonald's (MCD) come to mind plenty of supposedly defensive names have been clobbered by the same forced selling pressure and risk aversion afflicting almost all securities.

"I think the current economic environment mixed with a new political landscape may surprise people," says Joe Clark, managing partner of Financial Enhancement Group, a financial-management firm based in Anderson, Ind. "Consumer staples, health care and utilities are the normal bastions of safety. Don't be surprised to see them as laggards in 2009."

Perhaps more surprising, Citi is overweight on the consumer discretionary sector, largely because shares of retailers look so darn cheap, according to in-house analysts. It also doesn't hurt that there's a great deal of short interest in that sector, meaning any positive surprises could touch off a short-squeeze, propelling shares higher. True, with consumer confidence at an all-time low, the consumer discretionary sector is about as out of favor as they come. Although that's typically a fairly reliable contrarian indicator, we continue to be leery of anything tied to consumer spending.

Finally, investors shouldn't lose sight of opportunities outside of equities. "We think this could very well be the year of corporate debt," Financial Enhancement Group's Clark says, and exchange-traded funds offer a cheap, liquid way to attain exposure. The and look good to Clark.

The most important takeaway from all these recommendations? Diversification will reign supreme in 2009. Citi recommends no more than 16.5% of a portfolio be allocated to any one of the S&P's 10 sectors. So whether it be stocks, bonds, ETFs or mutual funds, investors need to spread it around more than ever if they hope to repair their nest eggs in the new year.