These are the times that try investors' souls, or so Thomas Paine might have put it had he been a money manager. There is scary news all around -- the credit markets are seizing up, mortgage-backed securities are plummeting in value, even Wal-Mart Stores (NYSE: WMT) and Home Depot (NYSE: HD) have expressed worry lately that the stalwart American consumer is losing her resolve to spend.
Yet no sooner do investors panic and sell their stocks, than the market gets some relief. Central bankers around the world step in with billions in short-term loans, giving the debt markets some wiggle room. Or a hot growth company provides some upbeat news -- VMware's hot initial public offering on Aug. 14 was a nice respite from all the bearishness, for example. Or investors just start to realize there are lots of great companies getting much cheaper while the economy really is still humming along just fine.
Suddenly the Dow Jones industrial average will leap 50 points in an hour and we are left kicking ourselves for not picking up some shares of a favorite stock while it was down -- until the next market swoon when we wonder why we didn't get out when the gettin' was good.
Here's a way to deal with all the spikes and swoons: Embrace the rollercoaster. Now that the Dow Jones industrial average is back below 13,000 (weren't we just celebrating Dow 14,000?), you can take advantage of the volatility to buy some solid stocks you've always wanted to own at a sale price. No one knows where the market will go next. But if your plan is to hold quality stocks for the long term, a downdraft can provide a good buying opportunity.
How do you find solid bets? We asked some of our best investment bloggers to give us their top picks for today's volatile market. They came up with a mix of choices – everything from core blue chips like General Electric (NYSE: GE) and Coca-Cola (NYSE: KO), to riskier plays, like Steven Madden (NASDAQ: SHOO) and China's Huaneng Power International (NYSE: HNP). Peruse our gallery to see why stocks you may know well, like Starbucks (NASDAQ: SBUX), Boeing (NYSE: BA) or Target (NYSE: TGT) are buys, or learn about companies you may never have heard of – like South Korean steel maker Posco (NYSE: PKX) or train car maker FreightCar America (NASDAQ: RAIL).
Of course, we don't think you should time the market (we hear ya' Zac!). This isn't the time to bet the farm, even on a big brand name blue chip. But if the recent sell-off is causing you stress, you may find relief in identifying stocks that could be safe or highly profitable picks to stash away for the long term.
Amey Stone is the editor of BloggingStocks.
See all the posts in this special report:
- Volatile Markets: Stick with General Electric (GE)
- Volatile Markets: Huaneng Power (HNP) is my pick for the next 50 years
- Volatile Markets: Target (TGT) is the retailer of choice
- Volatile Markets: Bank of America (BAC) offers low risk, high reward
- Volatile Markets: Starbucks (SBUX) is ready for a comeback
- Volatile Markets: Coca-Cola (KO) is the Real Thing
- Volatile Markets: Bet on Boeing (BA)
- Volatile Markets: Ride FreightCar America (RAIL)
- Volatile Markets: Anadarko Petroleum (APC) has valuable fuel reserves
- Volatile Markets: Dip makes Posco (PKX) a bigger bargain
- Volatile Markets: Steven Madden (SHOO) will wear well
- Volatile Markets: Precious metals are the safest place to be
- Volatile Market: Just ignore it; don't try to time it
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Reader Comments (Page 1 of 1)
8-16-2007 @ 7:55AM
scotty said...
1984 Ford engine rebuilt under warranty...Ford warranty for life, if paid for repair deductible...engine went 2 years later...ford blamed jiffy lube filter and jiffy lube blamed ford piston cracked. neither would cover it...no more fords and no more jiffy lube. aaa engineers took ford to court in the past, their rep said no more, as ford will spend their last penny to beat you in court, rather than spend a few dollars to do that right thing. I have had wonderful Hondas, toyotas, VWs, Mercedes, since (I do have Cadillac now...but is was a real used car steal). I use to buy a new car every year...have two all the time. But no more Fords, or Chevys (since 1968 lemon). I have a long memory.
8-16-2007 @ 8:56AM
Edna said...
I have never been interested in stocks because of the gamble. I lost all my stocks on Kmart when they went Bankrupt, I still have that want to invest. Retired and not rich would like to have more to plan my future on.
What would be your advice as to what I need to do?
8-16-2007 @ 9:18AM
Candace said...
I'm a new investor that would like to begin with Money Market funds that have check writing capabilities. Which fund has the highest percentage return?
8-16-2007 @ 9:51AM
Lucy Passi said...
Please e-mail me any info you have to give.
Thank you,
Lucy
8-16-2007 @ 10:06AM
Hubert Ward said...
Three Stocks that have held up well IBM, 3mmm and Cisco
IBM and 3m pay dividends and are buying up their stock
8-16-2007 @ 3:12PM
Jerry Bluhm said...
Several people asking for advise. First, I have been a conservative investor for many years, too conservative I am sure. In todays market there is alot of risk, but if you buy the really good companies you have a better chance to make money. As far as money markets and where to go, my advise is go with the larger companies like Fidelity who have alot of experience and alot of invesors, and a good balance sheet. Study the different companies for yourself I would advise before investing.
8-16-2007 @ 10:42AM
Tilak Ratnayake said...
Very detail and through analysis.