I have said many times that investors always feel like they have to be doing something (I.E.- Buy or Sell). Here is an article by Investor's Business Daily on Yahoo Finance.
My strategy from here is pretty simple. I am going to wait for profits to be sitting alone in the corner, then I will calmly go over and pick it up.
For example, here are the prices of a few Dow 30 stocks during the intial phase of bear market that started in 2000. The bottoms on many of these stocks were not reached until 2002-2003. I don't know if these stocks will go back to these exact lows again, but the price ranges do give us something to work with.
If you can buy a high quality stock at 50 or 60% off of their multi-year highs, I feel very confident that the potential gains will be much better than what we can get today.
Here is a partial list, and the price ranges of each stock when the Dow traded at 9450 & 8775;
DOW 9450/ DOW 8775
DISNEY: $21.65/ $14.65= Buy Target $21 or less
HOME DEPOT: $41.50/ $27.48= Buy Target $30 or less
GE: $26.90/ $$25.44= Buy Target $ 26 or less
INTC: $25.70/$15.35= Buy Target $17 or less
MSFT: $$21.49/ $ 19.13= Buy Target $21 or less
DOW STOCKS WITHIN BUY TARGETS
COCA-COLA: $49.15/ $44.16= Buy Target $44 or less
WAL-MART: $$53.15/ $$45.60= Buy Target $45 or less
Since I don't see many bargains sitting in the corner to profit from, I think doing nothing makes the most sense.
One group that has been smashed is the Restaurant group. If you decide to nibble at this group be aware that you are early, but the prices are still very attractive. I have started nibbling at these stocks.
OSI RESTAURANT PARTNERS (OSI): 41% off its high's; Owns 775 Outback Steakhouses, 200 Carrabba痴 Italian Grills, and 90 Bonefish Grills, looks pretty attractive.
The Cheesecake Factory (CAKE): 40.6% off its high's; the company operates 105 casual dining restaurants. It's a big hit among women.
PF Chang's China Bistro (PFCB): 40.8% off its high's; the company operates 131 P.F. Chang痴 China Bistro restaurants and 77 Pei Wei Asian Diner restaurants.
