Maybe Santa left you the gift that will last the whole yearlong: a headline that says "Stocks head lower on credit worries."

The credit problems that wreaked havoc on Wall Street and in real estate markets this year will continue creating risks for investors in 2008, according to investment analysts and managers. They see continued volatility in financial markets, higher inflation, weaker consumer spending and weaker corporate earnings. They also believe there is no easy solution for the mortgage problems that they expect to spill over into credit cards and other debt.

"Something that took that long to develop is unlikely to go away over a matter of months. It will be the middle of next summer and we'll still be talking about this," says Federated Investors Senior Vice President Joseph M. Balestrino.

Credit concerns have contributed to the wild price swings on Wall Street. Volatility of the Standard & Poor's 500 stocks in November reached levels not seen since March 2003, when the bear market ended and the bull market began, says Geoffrey Gerber of Twin Capital Management in McMurray.

Some of the volatility can be attributed to a shift in investor strategies, according to Mr. Gerber. He says 2007 was marked by a move from small cap stocks to large cap shares, as well as from value stocks (stocks trading below what common measures say they are worth) to growth stocks (stocks whose earnings are expected to grow at above average rates). Current levels of volatility are more in line with what's considered normal historically, Mr. Gerber, but that's little comfort to investors wondering whose credit problems are going to send tremors through the market.

Financial stocks have been among the hardest hit, which could help them rally in January after some end-of-the-year tax-related selling, says Colin Symons, chief investor officer of Symons Capital Management in Mt. Lebanon. But Mr. Symons believes the rally will be short-lived unless policymakers address the root causes of the credit problems, something he doesn't expect to happen in an election year.

"We've certainly had a period where you didn't get paid to take any credit risks and we're still working that off some," he says. "I would tend to stay very safe and avoid taking any credit risk."

Don't look for any relief on the energy front, where $90-plus oil is starting to be reflected in higher inflation.

"Right now, the world is producing 86 million barrels a day, refining 86 million barrels a day and using 86 million barrels a day. When there's any kind of stoppage anywhere ... that affects the price of energy," says Louis Stanasolovich, president of Legend Financial Advisors in McCandless.

With global energy consumption growing at 2 percent and production increasing at less than 1 percent, "energy is going to continue to rise," he says.

Energy and a weaker U.S. dollar, which makes imported goods more expensive, should cause more inflation than the historically low rates we've experienced in recent years, Mr. Gerber says.

They could also make more of a spendthrift out of the U.S. consumer. But Mr. Symons doesn't expect consumers, who have proven remarkably resilient in the face of economic and financial problems, to collapse.

"We're going to see a certain amount of belt tightening, but nothing over- dramatic," he says.

Mr. Balestrino believes the consumer will keep spending as long as the unemployment rate remains near its current reading of 4.7 percent.

"The key to all of this and the reason why things are holding up so well is the jobs market," he says. "I wouldn't sell the consumer short until we see unemployment go materially higher, to 5.25 or 5.5 percent."

While there's considerable sentiment that the problems and risks facing investors in 2008 will be manageable, Mr. Stanasolovich expects they'll make more of an impact than many believe.

"I just see dozens of indicators looking pretty pessimistic right now," he says. "We're definitely headed toward a recession -- if we're not already in one."