The downward spiral in stock prices, a weak housing market and a tough economy have made 2008 a year to forget for most investors.

Yet some bargain hunters are looking for investment opportunities in the wreckage.

One such company, Diversified Mortgage Workout Corp. in White Plains, is targeting sectors that are deeply troubled by America’s housing crisis—distressed subprime mortgage portfolios, real estate and mortgages of troubled homeowners. The company said its goal is to buy such assets at “significant discounts” and eventually realize a profit once the economy turns around.

The company announced today that it will invest $20 million to buy a 23 percent stake in an offshore hedge fund that has a similar investment focus.

“Diversified believes this to be a great entrance strategy for a soon to be highly lucrative opportunity as banks, mortgage companies and investment banks in the United States start to unload its non performing real estate related assets, while the economy starts its recovery under the new incoming administration,” the company said in a written statement.

Diversified said it has the option to increase its position in the hedge fund by another 26 percent within a year.

Diversified did not disclose the name of the hedge fund in a news release. Company officials could not be reached for comment.

In August, Diversified said that it had financial commitments of $50 million from investors to buy subprime mortgage portfolios. It added then that it was negotiating for another $100 million in financing commitments.

“The company is very pleased with the progress that has been made in such a relatively short period of time in attracting investment capital and the interest of additional large sums of investment capital being presented to us,” Victoria Forlenza, president and chief operating officer of Diversified, said in a written statement in August. “With the proper analysis of the portfolios the company acquires and the proper pricing and terms, this will be a very lucrative profit center for the company and its shareholders.”

This year’s downturn in the stock and real estate markets has been particulary brutal for Sam Lieber.

Lieber invested in hotel, office and other real estate companies as the portfolio manager of the Alpine Global Premiere Properties Fund in Purchase. But with those real-estate sectors doing poorly as investors worry about the potental impact of the credit crunch and a recession, the fund is down 59 percent this year, worse than a 25 percent drop for its peers, according to Bloomberg News.

Managers said today that they have responded to the steep selloff by buying back more than 279,000 shares of the closed-end fund.

“Recently, we’ve seen extreme pessimism overtake the markets and our fund became irrationally discounted,” Lieber said. ”(The fund) itself became one of the best opportunities for investment as we saw a sound strategy steeply discounted in the market. The fund took advantage of this severe undervaluation, buying back its own shares.”

The Alpine Total Dynamic Dividend Fund, also managed at the same investment company in Purchase, said it has bought back more than 112,000 shares. The fund, which invests in dividend paying companies in the United States and internationally, is down 50 percent this year.

“Whenever irrational extremes create tremendous value in our closed-ends, the funds are going to be in the open market buying back shares,” said Steve Lieber, Alpine’s chief investment officer.

EpiCept Corp., a pharmaceutical company at The Landmark in Eastview, said it will offer 8 million shares of its common stock to the public for 25 cents a share. The company will also offer five-year warrants to buy another 8 million shares at an exercise price of 39 cents a share. The company expects to make $1.9 million from the offering. It said it will use the money for working capital, general corporate purposes, and to pay fees owed to a secured lender. The price of its stock dropped by 10.5 cents a share today, closing at 28.5 cents.

Money manager Christopher Conover, a New City native, has opened Hudson Valley Wealth Management in his hometown at 151 N. Main St.

The fee-only investment advisory firm has three employees.

The firm’s Web site is www.hudsonvalleywealth.com.