Is any investment a safe bet in this economy? Maclyn L. Clouse, a professor at the University of Denver’s Daniels College of Business, offers the following strategies for nervous investors wondering what to do with their money:
If you are invested in stocks, what should you do?
A: If you are in stocks right now, you should probably just sit tight. One of the best things to do is don’t look at the stocks every day. Don’t get upset by the fact they’re going down. They might go down some more.
What type of investor should sell their stock?
A: If you are all of a sudden in a position where you’re going to have to take actual dollars out of your 401(k) in the next year or two, you might want to think about moving some of those stock dollars into bonds or fixed- income securities.
What type of investor should stay in the stock market?
A: The young people that still have time on their side. Time is the greatest asset you have in long-term investments because over time the market is going to come back.
If you got out, when should you get back in?
A: Well, today might be a good day, because if you thought the stocks were good, say, last Friday when the market was down a lot or whenever you got out, now (the Dow is) down another (370 points). If it’s a good company . . . it’s still a good company today.
Where do financial experts have their money invested?
A: My 401(k) is pretty much in the traditional mutual funds. I let professionals, who can do this on a 24-hour basis — which I can’t — manage it, and I’m confident to let it ride.
