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Bear Sends Investors Back to School

With Labor Day weekend on the horizon, investors' confidence continues to slip faster than Gary Condit's credibility. On Thursday, the Dow Jones Industrial Average once again dropped below 10,000, the first time below that mark since April. Continuing economic worries and a seemingly unending parade of warnings and cautious comments from leading companies such as Sun Microsystems(Nasdaq: SUNW) have investors on their heels.

Now more than ever, it's time to be careful out there, and in particular to consider your own unique situation. Should you sell stocks or buy them? How should you handle this bear market? We've assembled some recent articles that address these questions, and others.

Five Reasons to Sell
With the market down, should you sell your stocks? While Fools prefer to buy and hold for the long term, it's worth keeping a few things in mind: If you expect to need money soon, aren't closely familiar with your holdings, are eyeing better opportunities, have watched your favorite company morph into something unfamiliar, or can't sleep at night -- you might want to consider pressing the "Sell" button.

Five Reasons to Buy
The market has beaten up most investors this year, but all hope is not lost -- and you might even want to consider buying in these conditions. If you see bargains everywhere you look, won't be dipping into vital savings, can take advantage of dollar cost averaging, have a stomach for volatility, and can afford to wait for years to see your investment decisions pan out, it may be a good time to look for stocks.

A Cautious Investor's Credo
Fool writer Richard McCaffery discusses some of his investment principles, which include: investing in high quality companies; not investing in unprofitable companies; seeking a margin of safety; and understanding that investing in stocks isn't easy.

Going Against the Herd
Brian Graney discusses why individual investors may have an advantage over Wall Street pros during periods of increased uncertainty such as the current market environment. Everyone must contend with the powerful psychological force of "the social proof," in rising markets and in falling ones. There are additional structural features, however, that promote herding behavior on the institutional level that don't apply to the individual.

Is Shorting Stocks Foolish?
Shorting stocks isn't for novices -- or the weak of heart -- but for advanced a investors it can be an effective investing approach in a down market. Whether or not you ever short sell a stock, learning the ins and outs can help you become a better investor. This collection of articles can help you learn more.

Cash Cushions for Uncertain Times
Uncertain economic times reinforce the need for a cash cushion to complement your stock investments. Paul Commins offers some thoughts, and tips, on building a "cash cushion."


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