What to buy on a rollercoaster ride?

Posted by: Lauren Young on January 22, 2008

Forget recession or slowdown.

You heard it here first: This is “a motion sickness market.” (At least I think I just coined that phrase.)

Anyway, while your first urge may be to head for the hills, many financial advisers smell a buying opportunity. I reached out to more than 100 financial advisers today, and below you’ll find what popped up on a few buy lists.

What, if anything, are you buying? What are you selling? Inquiring minds want t oknow.

Greg Porter, certified financial planner: "I feel there are real bargains in these areas: financial services and real estate investment trusts. Yes, the areas hit hardest in the last 6 months are where I am looking to buy. Funds I am considering purchasing or adding to include: T. Rowe Price Financial Services (PRISX); (Royce Financial Services (RYFSX); Third Avenue Real Estate Value (TAREX); and Scudder Real Estate (closed end fund, SRQ).

Chanie Schwartz, certified financial planner in New York:
"Some areas that look interesting now are: TIPS, Rydex Juno Fund(inverse of the 30 year treasury or a vehicle achieving similar results), global technology, Food& Drug Retailers, Beverages, Vehicles that short US indexes such as Merrill Lynch has a Dow Bear Note that gives accelerated return on the downside with some principal protection, however it has a maturity on it), invest in the dollar, Japan and Asia. I would be taking profits on Treasury Strips."

Peter Bush, certified financial planner: We like "value funds such as DWS Dreman High Return (KDHAX), as they have historically found bargains for their approach in these types of markets. We also like Franklin Income Fund (FKINX)."

Joseph Harowski, a certified financial planner at Smart Choice Financial Planning in St. John, Indiana: "I use etf's on days like this because buying mutual funds usually misses the meat of the drops. The Vanguard total market etf (VTI) is a good way to buy at what you think are market inflection points. Also I have been buying regional banks such as Washington Mutual (WM) and Fifth Third (FITB), at these low prices."

Keith Singer, an adviser in Boca Raton, Fla.: "I am overweight growth, large cap and international. I like American Funds Capital World Growth & Income Fund. It’s my favorite."

Jake Engle
, a certified financial planner in Seattle: "Investors should be buying overseas stocks, if they haven’t already gotten to a 30% position or more. Dividend yields protect investors in downturns, and rising dividends lead stock prices higher. European and Australian stocks are the world champs in dividend yield, and they just got a lot cheaper--one recommendation is Vanguard's European ETF (VGK).

Lisa Roll, first vice president of investments at Wachovia Securities:
"I'm recommending the AIG SunAmerica High Watermark Fund to my clients. (HWFCX is the symbol for the C-share) This fund guarantees principal if held to 2015. That would be your worst case scenario. It "locks in" the high watermark of the fund on a daily basis. Currently, shareholders would receive approximately $10.71/share in 2015 if the fund never sets another high watermark between now and then. You can buy the shares today for $9.96. That's a 7% return guaranteed over the next 7 years or 1% per year."

Scott D. Ford, president of Cornerstone Advisors: "We like Altria (MO) especially given its current pull back to the low to mid $70 per share price range. At current share prices, its dividend yield is nearly 4% plus its strong financials point to a potential healthy total return."

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About

Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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