"We've come up with five ways to protect you assets and still make a little money during these rough market environments," says
Glenn Rogers. The market analyst and contributing editor to
Internet Wealth Builder looks at raising cash, hedging energy and basic materials, and rotating into health care and financials. Here's his five-point plan to "make it through the next few months."
"These last few weeks have been about as difficult a period as I can remember for trying to make money in the stock market, whether your view is short or long term.
"So what should we be doing now? I decided a strategic overview would be useful; I have been using these strategies myself in an effort to protect capital and position my portfolio for (hopefully) better times ahead.
"Raise cash. Reduce or sell some of your bigger gainers and losing stocks that are unlikely to rebound any time soon. I'm not suggesting a fire sale but when we get a rally consider selling into it and increasing your cash position to 25%.
"Hedge your energy position. I am still net long energy but I have been reducing my positions in energy-related stocks and have bought the ProShares Ultra Short Oil and Gas ETF (ASE: DUG) to 15% of my energy position. Once we get through hurricane season, I will likely increase that to 25%.
"Hedge your basic materials positions with the ProShares Ultra Short Basic Materials ETF (ASE: SMN) that covers companies such as Monsanto, Dow Chemicals, and Nucor. This is not as pure a play as DUG but it is a useful hedge.
"Start rotating into healthcare. This sector has been pretty badly beaten up and should be ready to turn.
