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Selected Stocks a Long-Term Buy

The market trashings we witnessed in 2008 have pushed stock prices to punishing lows unseen for years. With the equities pool looking extremely attractive at the moment, should investors dip their toes into stocks, or stay dry and wait for even better bargains?

"If you’re looking at companies, and selected sectors of the market, you probably will stand a very good chance to pick them up at a good value," said Lucinda Chan, divisional director at Macquarie Financial Services, on CNBC Asia's "Protect Your Wealth" segment.

However, she qualifies that accumulating stocks now has to be for the long-term, with a 3-5 year outlook. And such an undertaking is not for the faint-hearted, because there is still much volatility ahead.

"We’ll probably see a lot more pain through this reporting season, before people get their confidence back. It’s not the time to be panicking, to move out of the market, because valuations have dropped way below 50% right now," she said.

As to a market recovery, Chan believes that the optimism generated by the incoming administration of U.S. President-elect Barack Obama may offer a short-term rally. But an ailing banking sector and persistent dismal economic data from across the globe will continue to breed fear among investors.

Despite existing uncertainties, an investor does not want to miss the boat when the market rebounds. "History has shown in the past that a lot of markets react to shock, when it does return, it does return quite strongly as well. But that will take some time, don’t expect a recovery to be here tomorrow, it’s not going to happen," Chan said.

Equities aside, Chan likes gold as a hedge against inflation but says that commodities such as copper and nickel will face tough times due to shrinking demand.

Comments? Questions? Send them in here.


Catch "Protect Your Wealth" on CNBC's Asia Pacific network every Tuesday on "CNBC's Cash Flow," Wednesday on "Asia Squawk Box" and Thursday on "Capital Connection."