Top Investments of 2009

Dec. 31, 2009— -- It has been a tough year for many Americans, as the economy continued to shed jobs and a record number of homeowners fell behind on their mortgages. But for those who were flush enough -- and savvy enough -- to put their savings into assets battered the year before, rewards were spectacular.

The U.S. stock market, of course, gave a pretty good boost, with the S&P 500 returning more than 25 percent in 2009.

But that's old news. A range of other less-publicized investments, from gold to junk bonds, made some investors very rich this year.

Here's a look at the top six plays of 2009.

The name says junk, but the profits were anything but. Junk bonds -- also known as high-yield bonds because they typically offer a higher interest rate to compensate investors for the risk they're taking -- posted a whopping 57 percent return this year, according to Merrill Lynch.

It's a sign of how far investor confidence has come, considering that junk bonds by definition are bonds issued by American companies with such bad credit that many mutual funds are not even allowed to invest in them.

But prices had just fallen too far to ignore.

In 2008, when the financial crisis scared investors into buying only the safest bonds issued by the government and companies with impeccable credit, junk bonds fell to record lows. In fact, investors were pricing junk bonds as if American companies would go bankrupt at the same pace they did during the Great Depression.

"Investors backed down from that Armageddon scenario," says Mirjam Sjoblom, a bond fund analyst at Morningstar. "Investors are realizing that defaults aren't going to be as bad as many had expected."

Within the junk bond, some categories fared better than others. Companies that were battered the most in 2008, such as financial institutions, saw a nice jump. In addition, companies that are very sensitive to economic cycles such as automakers and retailers, also posted healthy gains.