Seven Reasons Why the Bears Might Be Right

Which creates quite a problem, doesn't it? If you want to be completely safe, you move money into the safe, big-cap names that aren't likely to drop much here. You sell the most volatile stocks you own after they've been punished the most, taking a big loss, and also minimizing your upside in any rally that might be ready to emerge after this downturn is completed.

I advise a one-stock-at-a-time bit of introspection that, to the best of your ability, ignores any losses you've taken on the more-volatile stocks in your portfolio and instead looks for solid fundamental stories that you think the stock market might value when it stops being afraid of its shadow.

Tweaking Jubak's Picks

So in Jubak's Picks I'm holding on to Micron Technology(MU Quote - Cramer on MU - Stock Picks) and EMC Corp.(EMC Quote - Cramer on EMC - Stock Picks), because I think the fundamental momentum in both businesses will lead to a higher stock prices in the future, and not because I'm down 28% and 10%, respectively, and want to get even.

I doubt that Micron Technology will get back to my purchase price of $13.23. But after the solid earnings surprise the company delivered on March 29, I do see the stock climbing to $11.50 or so in any rally. That would be a better than 20% gain from the current price, and it justifies holding on to these shares.

On the other hand, I don't see that kind of potential from its current price in Main Street Banks(MSBK Quote - Cramer on MSBK - Stock Picks). Rising interest rates will keep a damper on bank stocks like this one in any near-term rally. So even though I'm showing a smaller loss of 16% for this stock vs. 28% for Micron Technology, I think Main Street Banks is a sell rather than a hold.

Buy Cautiously

And what about buying anything to take advantage of any rally likely to emerge after this decline is over? Remember that the drop isn't over and that the rally isn't guaranteed, and step lightly. You certainly don't want to get trapped by any head-fake rally next week and then suffer big losses in volatile stocks that you added to give your portfolio extra pizzazz.