In the Middle of the Storm, a Compass Can Be Your Best Friend

Everyone from high-test hedge fund managers to retirees is telling me that he or she is looking for a money-making strategy for difficult times. That's precisely the right thing to do in punky stock markets that have soured on speculation.

Today is not a time to make wild bets. Instead, it's time to stay calm, cool and collected and to apply cold reason to a cruel market. It's time to embrace sound stock investment strategies designed, first and foremost, to protect your assets, and secondly, to earn you a decent return. (By decent, I mean 15% a year.)

There is no one strategy, obviously.

For the professional, George Soros-style macro player, a long/short strategy that allows you to use your informational edge and minimize market risk might be just the ticket. For instance, if you think the property and casualty insurance companies and the reinsurance companies are in sound shape, you might go long those not overly expensive stocks. Then, if you expect more credit quality problems at commercial banks, simultaneously going short the banks wouldn't be a bad idea. ...