Time to Pick Battered Stocks

To buy or not to buy stocks now? Prices stand at a point even blue chips are going for a song, making them attractive to one investing for the long haul. And with key U.S. indices having risen in five out of six sessions, investors may be tempted to scoop up bargains so as not to miss the boat in a recovery. But the risk of further volatility tipping markets south again cannot be ignored.

John Bollinger, founder of BollingerBands.com believes one way to work around the market and economic uncertainties is to take small positions in a large number of beaten down stocks that you believe will survive the downturn.

“The odds are you are going to lose three to five of them that cannot make it in the long run. The 10-15 other commitments will do very well, enough to compensate for those few that went out of business. We can use that diversification to improve the odds," he said on CNBC Asia Pacific’s "Protect Your Wealth".

Bollinger favors two sectors in particular. He likes tech stocks as the sector has shown leadership over the past months and are poised to do very well on the upside when markets recover.

The healthcare industry, often viewed as a defensive play, is also on his radar due to the potential government spending on healthcare in the coming years.

“People are looking to (U.S. President Barack) Obama's commitment to dramatically expand healthcare in the U.S. and are looking at these as growth stocks,” he explains.

Bollinger says gold will prove to be very important in a portfolio as an inflation hedge. However, he is not positive on the precious metal yet, for one, because of the huge gap between the price of gold and other metals. He says it is still early in the cycle and one can wait for tremendous opportunities in a two-to-four-year horizon.

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."