As volatile as the stock market has been lately, buying opportunities exist for investors who have a long-term outlook and a selective eye, say area financial advisors.

Michael Foster, of Foster Jones Investment Group, Perrysburg, says many of his clients were completely frustrated with Washington in 2008 when they were worried about a collapse of the financial system and how that would affect them.

“We’re not seeing those concerns as much today,” he said.

So, for someone with a 401-K or an IRA looking to retire in five to 10 years, is this a buying opportunity?

“Yes, we should view this as a buying opportunity,” Foster says. “It’s typically a good time to buy when others are selling.”

He’s advising clients to buy “good quality investments” but don’t watch them too closely.

“One good rule of thumb, buy companies that you use their products. That has always been my philosophy,” he said, alluding to a strategy utilized by legendary mutual fund manager Peter Lynch when he ran the Fidelity Magellan Fund.

Larry Dean, a financial advisor with the Edward Jones office in Genoa, said it’s a good time to consider dividend-paying companies.

“Quality companies that have been around for a long time, those are the companies we are interested in,” he said.

“We try to keep cash on the sidelines for investors. We don’t know when the market is going to take a dip. A 10 percent dip in the market will happen around every year to 14 months historically speaking. So those opportunities will happen quite often,” he said.

“We’re telling our clients to focus on what you can control. We can’t control the markets. In the short term it can go higher, it can go lower. What an individual investor can control is the diversification of his or her portfolio – the mix of stocks and bonds, the different asset classes. The stock side of their portfolio should be in good dividend-paying companies, which tend to have less volatility.  By having cash on the sidelines allows you to take advantages of buying opportunities like we’re seeing today.”

The Conference Board, an independent business/research association, last week issued survey results showing a 15-point drop in its consumer confidence index from July – a much sharper fall than anticipated.

And investors have had to digest a stream of dismal news recently, including a plunge of more than 15 percent in the Standard & Poor’s 500 index from late July to Aug. 8, battles over the federal budget, and the first downgrade in the U.S. credit rating.

Foster said the market “over reacted” to news out of Washington, causing a major sell-off in the major indexes.

“Now the market is simply bouncing back from oversold conditions,” he said.

Even investors who stuck to a buy-and-hold strategy during the 2008-09 drop in the market have recovered much of their losses, Dean said. “We’re not at a point where we’ve topped those levels. But the buy-and-hold philosophy we feel is still in place. Timing the market is too difficult to get it right every time. Some have success, most do not.”

Commodities, including precious metals, should be limited to two or three percent of a portfolio, he advises clients.

Foster concurs, saying he typically tells clients to stay in the three to five percent range.

Another cardinal rule of Foster is to try to leave emotions out of investing.

“The market is one of the few places where when something is on sale people make emotional decisions,” he said. “They make wrong choices off their emotions. They’re selling when they should be buying.”

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