Buying Stocks in a Slowing Economy

How you can make money in any market

good idea. Your needs and goals may change and your investment strategy would have to change accordingly.

“One strategy,” he offers, is to “take a look at the returns of a company you are considering. If the company has an annual growth rate of 10%, 15%, or 20%, and there’s no logical reason other than market risk that the company will not continue growing at that pace, then consider the company as a stock candidate.”

But he also recommends an individual portfolio of no more than 10 to 12 stocks. His stock picks in various industries are: Home Depot Inc. (NYSE: HD), Sun Microsystems Inc. (Nasdaq: SUNW), Sonic Wall Inc. (Nasdaq: (SNWL), Checkfree Corp. (Nasdaq: CKFR), Broadcom Corp. (Nasdaq: BRCM), United Parcel Service Inc. (NYSE: UPS), Cisco Systems Inc. (Nasdaq: CSCO), Sapient Corp. (Nasdaq: SAPE), Comverse Technology Inc. (Nasdaq: CMVT), General Electric Co. (NYSE: GE), Ford Motor Co. (NYSE: F) and Southern Energy Inc. (NYSE: SOE).

“It’s been my experience that when the market is off, the good-quality stocks usually come back,” Dobbs said. “Investing is not rocket science. It’s common sense. So don’t put all your eggs in one basket.”

A similar strategy has worked for Betty Parker, who got started with an investment club four years ago. The value of her club’s portfolio is about $64,000, providing a 70% return so far this year and a 51% return since it started. The club’s largest holdings include Cisco Systems, Home Depot, and Immunex Corp. (Nasdaq: IMNX). Reginald Parker has been investing for 16 years and he has earned 71% on his personal investments. “My portfolio is more diversified than my wife’s, but I favor technology stocks, also.”

Betty Parker, who started investing on her husband’s advice, is an experienced investor who takes high risks. With stocks worth about $10,000, and three months’ salary saved in an emergency money market fund, along with a six-figure 401(k), Parker says the market has taught her much about economics and economic power. “It gives me hope for the future, because no matter how crazy the market goes, over the long haul, I’ll still make out better than having my money in a bank savings account or depending on Social Security.”

Volatile economic conditions will not change the investment philosophy of Roger Bruce, a 47-year-old human resources manager who continues to rely on his broker, Dobbs, for advice. An Atlanta resident, Bruce is an active investor who can be aggressive, moderate, and conservative but is always income-driven. His largest holdings are Home Depot, Coca-Cola (NYSE: KO), and (MCI) Worldcom Inc. (Nasdaq: WCOM). Having been an investor for more than 15 years, Bruce has averaged yearly returns of about 25% to 30%.

Typically buying stocks for the long term and preferring those with sustained value for long periods, Bruce has built a diversified mutual fund portfolio that represents all levels of risk. “By doing this I have been able to benefit when the market is up and minimize losses when it’s down,” Bruce said.

What started out as fun has become serious

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