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Market Outlook: Investors Might Want to Wait to Jump Back In

This week's sharp swings in the market may be just the beginning.

"I think we're going to be very choppy," David Dietze. Chief Investment Strategist at Point View Financial Services, told CNBC.com. "There's a lot of investors who found themselves more exposed to equities than they were comfortable with."

Volatility can be a plus for some investors such as hedge funds. But many analysts say typical investors who want to avoid extreme risks would be wise to remain on the sidelines, at least for now.

"There's no need to rush in," said Bill Strazzullo, Chief Market Strategist with Bell Curve Trading. "If this ends up being a good buying opportunity, you don't have to rush because any advances will be met with significant selling. So you want to be cautious."

"I would sit back and let the market settle unless it were to fall further to about a 5% correction from its earlier high," agreed Larry Adam, Investment Strategist at Duetsche Bank Private Wealth Management. "If the S&P drops to 1380 - 1390, stocks become very attractive."

Be Selective

Still, analysts say pullbacks can still be advantageous for long-term investors -- if they choose wisely.

"I remain convinced we will be higher by year-end," said David Dietze. Chief Investment Strategist at Point View Financial Services. "Depending on your time horizon, if you're not overexposed to stocks and you have liquidity, you can do some selective buying now--if you can stomach the volatility."

Dietze favors major energy stocks such as Exxon Mobil, ConcocoPhillips and Chevron and drillers, including Nabors Industries. Point view Financial Services owns all of these companies.

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Price
 
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COP
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CVX
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NBR
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XOM
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"This is a good time to get a better reading on your portfolio," Barry James, President and Portfolio Manager of James Advantage Funds, told CNBC.com. "We're concerned that the economy will continue to slow, so we like non-cyclical stocks. Utilities and financial stocks tend to well in that environment."

His recommendations include American Electric Power, Goldman Sachs and CNA Financial. James Advantage owns these stocks in their mutual funds.

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GLLAX
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CNA
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GS
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Healthcare and Consumer Staples

"We like the healthcare sector and consumer staples," said Bill Schultz, Chief Investment Officer at McQueen, Ball & Associates. He recommends Johnson &Johnson, Becton Dickinson, Pepsi and Proctor & Gamble. McQueen, Ball & Associates owns these stocks in clients' portfolios.

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Price
 
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JNJ
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PG
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Of course, it's always interesting to see what fellow investors are doing, such as those who responded to CNBC.com's question of the day, "Given the market selloff, would you buy, sell or hold today?"

"I have bought selective stocks in my portfolio that took a hit yesterday to average down my basis," said Larry Cummings, Houston, Texas. "Other than adding to existing positions, I am holding still for a few days to see where the market goes this week."

Then there's Roger Snellman, who said: "Buy with reckless abandon when all the pundits say do nothing or sell."