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The ABCs of Investing in this Market

CNBC.com
Thursday, 30 Oct 2008 | 5:53 AM ET

Investors must have a thorough knowledge of what stocks they hold, but also admit they have no idea what the future holds when trading in today's volatile markets, an investment advisor said on CNBC Thursday.

In addition, fixed income looks attractive and the "cash is king" mantra may be shifting, Aoiffin Devitt, principal at Clontarf Capital, told "Squawk Box Europe."

Devitt's guidelines for the current climate are:

A) Accept Uncertainty. You can't know what is coming in this market and neither can your fund manager.

B) Be Proactive. Getting inside your portfolio and understanding what's there will help you make rational decisions, unlike the recent wholesale dumping of shares.

C) Chart your course. Investors should have a plan of where they want their portfolio to be.

At the moment fixed income looks like an attractive hedge against short-term deflationary pressures, Devitt said.

"Those pension funds that have fixed income are going to do very well right now," she said.

Meanwhile, cash may no longer be king, but liquidity still is, as investors need to know how much cash they have and whether they can access it, Devitt said.

But with interest rates coming down, those heavily in cash will start looking for some kind of yield, she added.

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