How to Handle The Downturn


(January 25, 2009)

As our stock portfolios lose value, one of the most common reactions is to cut your losses by jumping ship. However, several investment pros suggest a much different approach.

1. Stay the Course. Losing focus is easy to do, but most believe that the market is a cyclical one and investors would be best served to keep their current portfolio. In fact, many recently have stated that the second half of 2009 will see the beginning of the rebound and that 2010 could see growth that would outpace even the glory years in the mid-90s.

2. Buy Low Means Buy Now. The rule of thumb has always been "Buy low and sell high," so why are so many shying away from the market now? Is it better to buy when the stock is on the way up or when it's already there? Belief is that the bottom has come to the market, so now is the time to get on board with buying stocks.

3. Choose Wisely. When buying stock, take a broad view as to which industries would be good ones to put your money into. Health Care is a sector that will continue to grow over the long haul, so there is a safe bet. Petroleum, Mining, and Technology are also on the rise and will continue to be for some time. Banking, Autos, and Phone Companies have received bad marks, meaning that investing in them aren't recommended at this time.

- Drew Kuespert