Market Strategy in Tough Times

The Dow Jones Industrial Average has recently given back all its gains on the year.Fear is dominating the day,said Stephen Wood,PhD,Chief Market Strategist at Russell Investments.Liquidity is at a premium.People are accepting lower yields so they can sleep at night,losing money in the long run.This is a panic environment.Companies will have to fund pension plans,not hire workers or build facilities.They're gonna want to have dry powder so they don't have to go hat in hand in an illiquid market. What do you do?You need to look at a diversified,multi-asset strategy to generate return,in Dr.Wood's opinion. Robert Hagstrom of the Legg Mason Focus Fund thinks that,for investors,this is a very attractive time.Lower prices increase your rate of return.It's been said that,when the time to buy comes,you won't want to.Even trading is freezing up,which is a big problem for the market.The risk appetite is not very high. Seven percent of our portfolio is in financials,including JP Morgan Chase,the only money center bank in it.We are holding onto that position,Mr.Hagstrom revealed. JP Morgan Chase(JPM)