Where to invest in 2009 - Fox29 WFLX TV, West Palm Beach, FL-news & weather

Where to invest in 2009

By Chuck Weber email

PALM BEACH COUNTY, FL (WFLX) - With the new year under way, where do you put your money? From real estate to stocks and bonds, nearly every type of investment saw big losses in 2008. Investors, from those with a 401(k) to people managing multi-million dollar holdings, are wary of more losses in the current year.

But local financial experts say all is not lost.

"We approach equity investing through the balance sheet," said Robert Harvey, head of his own investment firm, Harvey Capital Management, in Palm Beach. "Probably three quarters of the companies we own have more cash than debt. And that's because the companies are very profitable."

It's a strategy that pays off in a tough market like the current one, says Harvey. Some companies in technology, health care, commodities and energy sectors fit the bill. But Harvey says you have to do your research. "Think long term and remember to read the balance sheets," he says.

With 4th quarter earnings reports coming out soon, Harvey predicts the stock market will have a slow start in 2009. But eventually, he says, stocks will rebound. Looking several years down the road, Harvey says, "When you compare your choices, the bond market and cash and stocks, stocks are becoming relatively much more attractive."

The same principles apply to your 401(k), says analyst Greg McBride of Bankrate.com in Palm Beach Gardens. "One of the biggest mistakes investors make is chasing performance," says McBride.

He uses the example of someone moving out of and into government bonds. "What you're basically doing is selling low and buying high," explains McBride. "And that's the exact opposite of what we want to do."

McBride says sticking to your strategy will eventually pay off. "If you're investing for a long term goal, such as retirement or maybe college education for a small child, this is a marathon and not a sprint."

However, McBride says this is a good time to take a look at your 401(k) or portfolio, to make sure your asset allocation is where you want it. If you're lacking some sectors, this is probably a good time to move into those areas, with prices low.

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