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How to navigate the stock market plunge

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Brendan McDermid/Reuters

(Read caption) A screen displays the Dow Jones industrial average after the closing bell on the floor of the New York Stock Exchange. Stocks dived more than 3 percent on Thursday, extending losses for a fourth day, as a bleak outlook from the Federal Reserve and weak data from China heightened fears of a global recession.

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I don't have a ton of time here because I'm up to my ears in trades, but I wanted to just address the fact that this Dow Jones Industrial Average is now off like 800 points in a few days.

I'm not making a bottom call and we're still saving most of our dry powder for sub-1000 on the S&P, even if that doesn't come during this particular spate of selling.

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That being said, we are rebalancing and bringing client weightings back up to where we want them - this involves some nibbling at the high-yielding, value oriented stocks we've been favoring. For model portfolio accounts, our cash/bond mix remains at 50% or so as it has been since August 1. We ignored last week's Nasdaq levitation act and came into today pretty underweight already.

I don't know if this is THE selling crescendo, but I can't afford not to have bought some things just in case it is.


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