The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK ( InvestorPlace) -- After the stock market tanked Monday, thanks in part to Standard & Poor's historic downgrade of the United States' credit rating, investors are left with one enormous question on their lips: What do we do now?
Well, I have three tips for you -- and they may not be popular. That's because I advise running against the herd by selling gold, avoiding Treasuries and hiding out in blue-chip stocks.Why run against the herd? Well, one big reason is the Treasury market itself, which should be linked most closely with the S&P downgrade. In a normal world, this would cause yields to rise, as investors would demand a higher yield in response to lower credit quality. Yet in the upside-down world of today's market, yields instead fell. Investors sold off their stock positions because of the bond rating downgrade ... then promptly plowed their money into downgraded bonds. The 10-year Treasury now yields under 2.4%.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts