If the record run from 13,000 to 14,000 was swift, the reversal of fortune has been truly historic.
In less than four weeks, the Dow Industrials went from 14,000 on July 19 through the 13,000-level on August 15. A cut in the Fed's discount rate Friday provided some support but few expect swift return to normal.
The marlet's vicious and rapid decline -- what many are calling a correction but what others are suggetsing may be the beginning of a bear market -- has sent some investors running to the sidelines. Those with a greater taste for risk may be thinking the decline is a opportunity to buy Sidelines or front lines, most investors want to know how to play the market and what -- if anything -- is worth a look.
The Nasdaq has held up the best among the major indices, prompting some analysts to say technology is the place to invest. Cisco, for example, is fractionally higher than its closing price the day of the stock market's peak in mid-July. Apple, on the other hand, is down about 10% but still up sharply for the year.
Given the dramatic volatility of recent weeks, CNBC has put together a survival guide for investors. Here's a sampling of what our experts had to say during the week.
Financials On Sale
David Katz, chief investment officer, for Matrix Asset Advisors, spoke with Mark Haines and Melissa Lee.
Katz says investors should "buy into some of these real significance dips," which will look good if you have a six-to-12-month time horizon. Katz cities Office Depot, Novellusand Tyco International as buy opportunities.
"We've been buying the financials into this weakness," says Katz. "We think that the big banks and brokerages are going to get through this in very good form. We think they have very good franchises." Katz mentioned Bank of Americaand JPMorgan Chase.
Bigger Is Better
Craig Hodges, co-portfolio manager at the Hodges Fund, and Eugene Peroni, senior vice president of equity research at Advisors Asset Management, talk with Sue Herera.
Peroni says "it will be a grind for awhile longer" and the market will not be "as elastic as we saw in early March."
Peroni's picks are more skewed to larger cap stocks -- semiconductor, computers, health care, energy, defense,
Hodges sees a "very strong market and normal selloffs in a very good market." Volatility is should not be seen as a problem. "Our best stocks are the most volatile," he says.
Hodges says his firm is focusing on global players, such as Procter & Gamble, Caterpillar,General Electric(parent company of CNBC and CNBC.com) and Transocean. "There's a lot of opportunities out there."
Quincy Krosby, The Hartford chief investment strategist, and Doug Roberts, Channel Capital Research chief investment strategist. share their strategies with Sue Herera
"If we did not have the dynamic growth outside the U.S., I would be worried," says Krosby, who likes companies making money overseas.,
"Rumors can change this market is a heart beat," warns Krosby, who describe her firm's client as those who "just want to save for retirement."
"We want them to start dollar-cost averaging," says Quincy. "Hedge funds have been forced to sell companies with good fundamentals."
Roberts believes we're seeing a correction, not a bear market, adding that "this correction still has a bit longer to go."
Roberts agrees that investors should dollar-cost average and buy on the dips but should "stick with your existing strategy.
"I would focus on the most liquid stocks in the market," he says. leaning toward larger cap stocks.
Playing It Safe
Even when it seems like every stock is falling, some are always faring better than others. As Matt Nesto reports, when it comes to sectors, there are ways to play it safe in times like these.
Nesto cites consumer staples (Procter & Gamble, Wm. Wrigley,Whole Foods); healthcare (Biogen Idec) and telecommunications services (Juniper Networks, Broadcom) as sectors and representative companies that have performed better than the broader market.
Playing the Selloff
Wendell Perkins, JohnsonFamily Funds CIO, and Clark Yingst, Joseph Gunnar & Co. chief equity strategist, discuss their strategies with CNBC's Maria Bartiromo and Dylan Ratigan.
Perkins, who calls himself a buyer, says based on a three- to six-month horizon, depressed financial stocks have a great chance to rally.
Yingst, who has some doubts about the subprime mess being contained, says there could be more downside for financials. His firm has had a more defensive posture in the past couple weeks and is recommending global companies, such as PepsiCo.