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Stock Picks: Investing In a Weak Economy

Natalie Erlich,|Special to CNBC.com
Thursday, 17 Jan 2008 | 4:07 PM ET

Stocks swung lower after Federal Reserve Chairman Ben Bernanke said that the risks of an economic slowdown have escalated.

Following the chairman’s testimony before Congress, CNBC talked to the experts to get their take on where to invest in a weak economy.

Market Maven
The Fed's testimony and the impact on the economy, with Dean Barber, Barber Financial Group chief investment officer and CNBC's Bill Griffeth

Stay In The Market

“When you look at what’s going on in the financials right now, you have a real issue. And we’ve been seeing for months now that you need to stay away from the financials and you need to now hold the course because we think that you’re going to see good things happen in the market this year. We think that maybe there’s another one to two percent downside risk at this point, but we still think we could finish up very very positive.”

Dean Barber, Barber Financial Group Founder & CIO

Making Money Now
Discussing whether there's any way to make money amid this market volatility, with Peter Boockvar, of Miller Tabak, and John Buckingham, of Al Frank Asset Mgmt.

Find Bargains

“This is the time that investors should be going shopping. It’s amazing that when Wall Street has a discount sale, investors tend to run the other way. I’m not going to tell you that stocks have bottomed today, because I don’t think they have in the short run, but I do think over the long term, again three to five years out you’ll be happy for stepping up to the plate today just as you would have been in 2002, 2001, 1998, 94, 90, 97… all the previous other downturns,” John Buckingham said. “I think you should be looking at the stuff that’s been beaten up the most. Financials, retailers… I mean there’s some great companies that are now on sale. You know, a name like Nordstrom, which has been cut in half from its 52 week high. I think that’s a name you want to own in the long haul. Even in the financials, JP Morgan Chase had excellent numbers out yesterday. I think that’s a name you’d like to own.”

John Buckingham, Al Frank Asset Management

Gold Is Golden

“I think by waiting six to 12 months will give investors even a greater chance to buy stocks very much on sale,” Peter Boockbar said. “The trade is precious metals, gold in particular and other commodities. Ben Bernanke basically has put aside any of his concern about inflation, whether you agree with him or not, and has focused his 100 percent attention on cutting interest rates, on hoping that saves the economy. So, his petal is to the metal with respect to printing money, debasing the U.S. dollar, spurring inflation and gold is going to be the best beneficiary of that.”

Peter Boockbar, Miller Tabak

Best Commodities Plays
There's a feeding frenzy in commodities, and Jonathan Kleisner, managing director of investment strategies at REX Capital Group, shares his best plays in the sector.

Betting The Farm

“Especially in the cotton market, was one of these coattail riders in on last week’s crop reports, was lock limit up for two days in a row. That hasn’t happened for several years. But again, in these three soft commodities you’re looking at commodities that are A, kind of lagging the rest of this run, the metals, the energies and the grains, the fundamental issue that these are global household staples which lends credence to that global GDP emerging markets forecast of humungous growth going two decades from now, and the third thing is that there is an empirical evidence of a non-correlation to traditional investments like stocks and bonds and there are even some studies now of lack of correlation to the real estate market.”

Jonathan Kleisner, REX Capital principal & managing director

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