Top 9 Questions for 2009

December 24, 2008

Thank you to everyone who submitted questions this week. I know the holidays are filled with many additional obligations, and knowing that you're still staying on top of the latest market actions and makes me very confident that you'll be successful in 2009!

One trend I saw in all of the questions I received was an eagerness to look ahead to the new year. I must admit, I’m excited about 2009 myself! It’s not just that 2008 was so rough thanks to the Scrooge-like behavior on Wall Street, with greedy financial companies ignoring common sense practices and smarty-pants hedge fund managers taking enormous risks at any cost. No, the biggest reason I’m excited for the new year is because of the tremendous investing opportunities I know it will bring!

There is no doubt that Wall Street will refocus on fundamentals in the first half of 2009 as the market itself gets back to basics. Earnings will guide the market as investors make their decisions based on the facts and abandon the high-risk models that failed over the past 12 months. That means the stocks with strongest earnings and sales will see tremendous buying pressure—and soar to new heights in the new year!

So now is the time to position yourself for profits. Let me show you how in my “Top 9 Questions for 2009!”

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The last few trading days of the year could be the most crucial of the entire year. Here's what you must do now.

If you lost money in '08, Storm Watch is how to make it back in '09. To access the current issue and automatically receive Storm Watch twice per week to your inbox, click here now—it's FREE!

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Q: What would you do if you had 30K cash? Where would you put it? John C.

A: I would put it in at least 10 fundamentally strong stocks, in different sectors and risk categories. I advocate a 60/30/10 rule of diversification, with 60% of your portfolio in the most Conservative stocks, 30% in Moderately Aggressive stocks and 10% into the Aggressive stocks. That means if you buy 10 stocks, you should own six Conservative stocks, three Moderately Aggressive and one Aggressive.

Here’s where you ask, “But which specific stocks should I buy?” Simple! Visit PortfolioGrader Pro and look for stocks that get my highest ranking—a total grade of A. This is really simple, because I have a “hotlist” search on the main page of PortfolioGrader, where you can see the top three stocks across dozens of sectors.

Q: I have lost a considerable amount of money after the Lehman Brothers bankruptcy, and it seems like each week I continue to see declines. What should I do? You say to be fully invested, but I’m still under water. M. F.

A: Here’s what I want you to do: Stop asking yourself, “How much have I lost?” Instead, ask yourself, “Do I own the best stocks to make this money back?” Visit PortfolioGrader Pro and put your portfolio to the test. If all those stocks have strong fundamentals, then hold on to them. They’re sure to bounce back. In 2009, we could see a quarter where the market surges as much as 50%! There is a tremendous amount of uninvested money right now, and when that cash comes flooding back into the market we will see significant gains overnight.

If you own some stocks that are C grades or worse, make sure you to trade them in for A-rated stocks. Selling for a loss is always hard, but you will make your money back faster in strong stocks than just sitting on a loser and wishing for it to rebound. Follow the fundamentals, and I’m confident you’ll return to profitability in 2009.

Q: I have purchased quite a few shares of Southwestern Energy (SWN) and have watched it go down, down, down.  You have given a very high rating to this stock.  Do you still support SWN for the long term and would you suggest I buy more? Charlene E.

A: I am still very bullish on Southwestern Energy. In fact, this stock again makes my list of Top 5 Stocks in Blue Chip Growth. Recent production cuts and spiking demand for natural gas due to a cold winter bode well for this stock. Also, if diesel demand is strong this spring as I expect it to be, the energy sector will get a big boost. As I said recently in a Q&A on NavellierGrowth.com, I can’t see crude dropping much lower than it already has.