Fix Your Portfolio Now!

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"The world breaks everyone and afterwards many are strong at the broken places. But those that will not break it kills."
 -- Ernest Hemingway, A Farewell to Arms

I've never had much fondness for Hemingway, but I always loved those lines, which I freely interpret to mean something like, "Everyone gets roughed up by experience. If you learn from it, that roughing up can be of great value. If not, be prepared to get roughed up again and again."

The market roughs everyone up, too. Yes, everyone. Even Peter Lynch and Warren Buffett have taken huge lumps from time to time. Not for nothing does investment manager and author Ken Fisher refer to the market as "TGH" -- the Great Humiliator.

And wow, have we been roughed up lately. It's not over, either -- while it's possible the stock markets have found their low points, there's clearly a rough economic grind ahead. If you're an employee of Citigroup (NYSE: C), General Motors (NYSE: GM), or any other company that's discussing difficult cuts and painful reorganizations -- and not too many companies aren't -- things could get a lot rougher from here.

But even if you stay gainfully employed in a job you love until it's time to retire many years from now, your portfolio has probably taken quite a hit lately. What can we do to make the most of what we have left?

Taking a hard look at where you're at now
If you've avoided looking at your portfolio recently, that's understandable -- but in order to take action, you need to know how much damage you've really taken. And yes -- now is the time to take action, while the markets are staggering, while other investors are demoralized.

Yes, now. Just about everything is down right now. High fliers and sturdy recession-resistant businesses alike are sitting near their 52-week lows. And while the latter have, generally speaking, fallen less than the former, they're also more likely to make you some money between now and the end of this mess. While there are a number of steps you can take right now to improve your portfolio, a move to better stocks is one that could deliver the biggest rewards.

Buys for right now
How can boring stocks make you money while the market is down? With dividends, of course! While it's true that no dividend is safe in a really deep recession, the ones paid by boring-basics businesses are less vulnerable than most. Kleenex kings Kimberly Clark (NYSE: KMB) are sporting a 4% dividend yield at current prices. Pharmaceutical cash machine Pfizer's (NYSE: PFE) yield is 8%. On the other side of the health coin, Altria (NYSE: MO) sports a yield that's also approaching 8% -- and speaking as an ex-smoker, I can attest that demand for cigarettes isn't likely to dive too much in the face of something as nerve-wracking as a massive worldwide economic meltdown.

On the other hand, there's a good argument for buying the beaten-up high fliers that are likely to fly again here, while they're cheap. As I write this, Apple (Nasdaq: AAPL) is within a few cents of lows it hasn't seen since early 2007. Marvel Entertainment (NYSE: MVL), a company thought by many to be in the early stages of a long-growth trajectory, is also closing in on 52-week lows. If those two manage to hold the line in the near term and recover their growth mojo in the longer term, buying them here could look like genius in a couple of years.

Those are big ifs, though. With so much uncertainty, it's important to step carefully.

One way to maximize your chances of a good buy in this difficult environment is to stick with opportunities vetted by experts with a good track record. The team at the Fool's flagship Stock Advisor newsletter has been through the recession wringer before, and is sifting through the post-crash rubble looking for the best buys in all corners of the market.

Looking to get started today? You can see their best ideas for new money, and get complete access to all of their recommendations, right this minute with a no-obligation free 30-day trial.