Phyllis Burke Goffney is a news editor at CNBC.com.
You wouldn't know it from this week's rally, but the runup in stocks may be nearing an end. "The bar was open and drinks were free," says Christopher Mayer of Capital & Crisis.
Instead of panicking, investors should look for ways to weather--and yes, profit from--the expected economic slowdown.
Investors should adopt a defensive strategy in September, normally the worst-performing month for stocks, analysts say. "I think that the thing to do is avoid industries that are significantly impacted by credit woes and stick with those companies that won't be affected," Steve Massocca, co-CEO of Pacific Growth Equities, told CNBC.com.
The market's wild swings are expected to continue through the summer, analysts say, but investors should take advantage of the volatility instead of fearing it. "There's no reason to think these 100, 200-point swings won't continue," said Rob Brown, chief investment officer at Genworth Financial. "That provides an investment opportunity."
The Federal Reserve's continued concern about inflation hasn't dampened the bullish sentiment for stocks. In fact, many market pros think inflation will continue to moderate, giving the central bank room to begin cutting interest rates later this year.
The LBO market may be headed for trouble, with some companies faring well and others failing completely. That's the forecast from Wilbur Ross Jr., chairman and CEO of WL Ross & Co. ... Ross agreed with a report in Wednesday's Wall Street Journal that indicated the LBO deals helping to drive the markets today dwarf the buyout frenzy of the 1980s. Ross says the situation is troubling.
Despite a volatile first quarter, stocks aren't much above where they were at the beginning of the year. But even if the major averages aren't showing big gains, smart investors know where to look for growth opportuntities.