Liquid Gold

Here's some thoughts from a long term stock investor.

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There's lots of noise and concern about what's going on in the markets these days. Portfolios are tumbling and folks are scared that their hard-earned savings could disappear. Indeed, there's probably more pain and downside left to this slide.

We've been hearing for months about the sub-prime mess and the ugliest facts may still get uglier. One story today forecast that the S & P average could drop by one half. The fear mongers are having a field day.

Where should an investor be in the midst of this environment? Hopefully, you are sitting tight. Also, I cross my fingers that you have rid your holdings of all financials, home builders, and retailers for the time being. Rate cuts will return all these sectors to higher prices someday, but it may take a while.

We can all make some money in hard assets. That's mainly commodity-type stuff like gold, oil, agriculture. Is there upside in gold? Yes, because the Fed continues to cut rates which, in turn, sinks the dollar. Someday the dollar will strengthen. That's the time to watch closely because maybe it will be time to take some profits off the table. Things like this do not turn on a dime.

Oil is always a good hedge. Prices rise, prices fall, but everybody needs oil. Sooner or later your oil stocks will give you profits. Select carefully because some pay excellent dividends and that money can cushion you while you wait for a rise in the stock prices.

And finally there's agriculture. Lots of individual stocks to chose from in that sector and a few ETF's. There's been a large run up in the ag sector over the past several months, but there's probably more upside to come. People gotta eat!

Finally there's the value plays. Lots of good stocks are getting hammered in this sell-off. When the pain is finally over, some of them will have twenty to thirty dollars upside per share. There are plenty of financial publications out there making recommendations. Read all you can and select carefully. No one can predict a market bottom so when it feels right, stick you toe in the water and buy your picks. Have faith in your judgement and be patient. Eventually you will begin to see profits again and all this angst will be history.