Market down? Buck up and buy
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Faced with the carnage on Wall Street of late, investors are fleeing stocks for what are perceived to be safer investments, like recently downgraded U.S. Treasuries. But those havens offer only minimal returns, given the Federal Reserve's promise last week to keep interest rates at record low levels for the next two years.
Moreover, investment managers say one of the biggest mistakes investors make is to sell into a down market, only to buy back after a rebound. It takes a certain amount of guts, faith and discipline to buy stocks in times like these, but that's exactly the prescription professionals offer.
"People don't have the stomach to buy into what has not done well recently and sell what has," said Geoffrey Gerber of Twin Capital Management in McMurray.
Mr. Gerber said there was one lesson investors could learn from recent weeks.
"It makes it clear that you can't time the market," he said.
With those precautions in mind, here's a few recommendations from investment managers. While you consider them, there's a few things you should keep in mind. Everyone has different investment objectives, risk tolerance and time frames. A stock that may be appropriate for someone who is 10 or 20 years away from retiring or paying for a college education may not be appropriate for someone who is closer to the date when they'll need that money. Investors with a bigger appetite for risk will be able to go to sleep holding some of these stocks, while others may toss and turn.
That said, here's what some investment managers are recommending.
John Frankola of Vista Investment Management in Pittsburgh offered five aggressive ideas, based on the assumption there won't be a double-dip recession and that the economic recovery will continue.
"So many times when we get these big, scary market corrections, the market pundits come out and tell you to go safe," he said. "But if you believe we're going to get through this and the economy is going to continue to grow, I say be aggressive."
First Published August 14, 2011 12:00 am
