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Stocks Investors Can Cling To In a Troubled Market

Brooke Sopelsa,|Special to CNBC.com
Saturday, 12 Jan 2008 | 9:14 AM ET

Stocks are tanking again. Investors are worried about a recession. And even the promise of

NYSE traders
AP
NYSE traders

more Fed rate cuts and a big banking merger aren't helping.

What to do?

"One needs for the moment to just focus on the indices and maybe get a little technical in one's analysis about what stocks to play in a specific sector," suggested Marty Cunningham of Hudson Securities. "But it's not going to get any easier."

Indeed, while investing approaches differ, the one thing everyone agrees on is exactly that: It won't get easier.

So CNBC asked the pros for their investing advice in this kind of market. Here's a sampling of what they had to say.

Small Caps for '08
Small cap stocks for your portfolio, with Eric Ross, dir. of U.S. equity research at Canaccord Adams

Small Cap Opportunities

“We’re looking at places where we can sort of hide from a slowdown in the general economy, so we’re looking at new life sciences technologies, we’ve been looking at a growth of organic and energy type of foods and beverages, and we’ve been looking at green sustainable energy projects.”

Erick Ross recommends: Sangamo , Cree , Hansen Natural and Itron

Eric Ross, Canaccord Adams Director of U.S. Equity Research

Market Pulse Check
Going against the grain, with Alan Lancz, Lancz, Global president and CNBC's Mark Haines

Investing Against the Grain

“In the U.S., a company like Pfizer is much cheaper than a Novartis or a Sanofi-Aventis. Eli Lilly has moved up recently, but we would be buying that on weakness. We’re finding some smaller caps; everyone’s avoiding the smaller-type stocks and buying the large caps. For the first time in two years, we’re finding some smaller caps that really look interesting, and I still think there are areas in technology.”

Alan Lancz, Alan B. Lancz & Assoc. President

Your Best Trades Now
Making money in global real estate, with Ritson Ferguson, ING Global Real Estate Fund fund manager and CNBC's Dylan Ratigan

Investing in Real Estate

“Sun Hung Kai is one of our top holdings in the fund. It was a star in 2007, up over 80%, but we still think there are great prospects there. We get caught up in what’s going on here in the U.S. in a slowing economy, but the fact of the matter is, in China and Hong Kong things are still quite dynamic.”

Ritson Ferguson, ING Global Real Estate Fund Manager

How to Make Money Now
A look at some of the market's silver linings, with Jeffrey Applegate, CIO of Citi Global Wealth Management

An International Approach

“I think rather than just focusing in on U.S. equities, your larger opportunity set is at the global level. So if you look at global equities, we’re actually somewhat underweight in terms of where we would be in the U.S., overweight Europe, a little more neutral on Japan. Emerging market equities, which as you know have held up surprisingly well, and we think they’ll probably come under near-term pressure, but emerging market equities we think ought to turn out to be a fairly good place to be.

Jeffrey Applegate, Citi Global Wealth Mgmt. Chief Investment Officer

Friday Trade
Preparing your portfolio for next week, with John O'Donoghue, Cowen & Co.; Steve Grasso Stuart Frankel; Dave Rovelli, Canaccord Adams and CNBC's Mark Haines

The Case for Altria Group

“I like Phillip Morris, Altria Group . It’s no surprise to you in this economy I think you have to go with something that really stands the test of time, and you have the spin-off that’s coming, the PMI, the Phillip Morris International, that’s slated for the next couple of months. I think either way you go, you’re going to see some nice profits factored in.”

Steve Grass, Stuart Frankel

Of course, there are different takes on any investing situation. And some are warning against small cap plays.

Going into a recession, I recommend being long the big-caps, says Karen Finerman. They’re a much more defensive place to hide than the small-caps. Here’s why - in a recession liquidity dries up - liquidity in the stock and in the financing markets, she says. It’s probably going to get a lot harder for small companies to get cash. (Read the rest of Finerman's take here).

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