Jonathan Lederer Offers Advice For Markets In Turmoil

I am staying underweight in stocks, with an emphasis on higher-quality, larger-cap U.S. companies that pay solid dividends. I like the iShares Dow Jones Select Dividend Index (ticker DVY), as it currently yields more than a 30-year U.S. Treasury. But I will not likely add more to existing stock positions unless the S&P 500 Index drops below 1,075. If this occurs, I would want to see whether price moves in copper, corporate bonds and Chinese stocks were exhibiting signs of recovery. If so, I'd feel more confident about putting new money into riskier asset classes, such as emerging-market stocks.

My clients typically hold 5 percent to 10 percent of their portfolios in gold bullion (via exchange-traded funds). If you do not own any gold, I recommend adding it gradually by investing in gold ETFs (i.e., GLD or IAU). Whatever strategic investment moves you decide to implement, be sure they are done within the confines of a diversified portfolio.

Source: The Sacramento Bee

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