Market Downturn. What to do now?

The market has sold off a good bit the last week and some investors fear a crash or at least a serious correction.  We expect neither and we suggest you go back and read our two posts on the political economy back in July for starters.  The central point is the economy is not growing, but companies are making profits.  Companies have few reasons to invest for growth or future employees so they turn around use those profits and buy back stock, lots of stock.  Point is as stock prices move down expect the same companies who have bought back stock to keep up and maybe even quicken the pace. Stock buybacks reduce outstanding shares and increase stock values. 

Where to invest here?  Simply as we have suggested before if you are working and putting money in a retirement asset plan continue to do so and please pick a good index fund.  If you are looking to buy individual stocks pick those that are turning over big piles of cash regularly and have good valuations.  We like stocks such as CSCO, ORCL, AAPL, and IBM.  All these are good long term technology picks.  We also like PRU and MET, two insurance stocks with upside potential.   BP down here near $40 is a steal.   SF offers some significant growth potential in the financial area.   PM is cheap as well nearing $80.   JPM offers a solid bank value.  T, O, and VZ are great long term income and growth picks.  BRK.B is like having a stock as a mutual fund and would make a great retirement growth pick stock.  We really like NNC down below $13 for good upside capital gains and tax free income.  Lastly if one is looking for some opportunity at a big capital potential try NEWM. 

We have positions in all these securities or plan on doing so in the next month.