As U.S. markets look to free fall, what to do

The Hang Seng was off 12.2% overnight. Europe is running off 6%. The US is likely to open with another large drop.

What to do? Depends on your situation. Jim Cramer said that people should sell stocks to provide a five-year buffer for their incomes. Maybe he is right. Certainly people who face potential job loss or have high debt may want to get out.

Other investors will move to safe havens like Treasuries. Nothing wrong with those except that the yields are awful.

For those who can keep some or all of these money in the market, one option is bonds in healthy companies like GE (NYSE: GE). The other good options is to move capital into the strongest US firms and ride it out, knowing that even their shares will fall, but are likely to recover well when the economy improves, even if that takes over a year. Big corporations with tons of cash and good products or services.

What are the "safest" companies. Here is a short list, but looking at it most people can figure out what other firms should be on included IBM (NYSE: IBM) is still posting good earnings and has a broad global base of customers. The company has a 2.4% yield which will increase as the stock fall. Exxon (NYSE: XOM) may drop due to falling oil prices but will still make billions of dollars each quarter. It has a 2.4% yield as well. P&G (NYSE: PG) has a 2.7% yield. Consumers will buy it razors and toothbrushes even if things get tight. And, Microsoft (NASDAQ: MSFT) with a 2.4% yield as more cash than the U.S. government.

Douglas A. McIntyre is an editor at 24/7 Wall St.