An economic and stock market downturn means investors should more than ever stick to the investing rules: Stay diversified, stay for the long term, and stay disciplined.

        And stay invested.

        “This is the time to be really aggressive,” said Dan Seiver, economics professor at Miami University and member of the Enquirer's Portfolio Panel. “The only time I really like to buy stocks is when the market is running.”

        Members of the panel — investment advisers and market analysts from across Greater Cincinnati — met in late February to discuss what falling stock prices and a possible economic recession mean to Tristate investors.

        While not all agreed with Mr. Seiver's aggressiveness, all agreed with his follow-up thought: “It has to be within the context of a balanced portfolio.”

        In fact, this might be the perfect time to re-examine investment holdings and make sure you have a well-diversified mix. With different market sectors moving in different ways, holding too much of one thing is very risky.

        “If people haven't rebalanced their portfolios for a couple of years, they're way out of whack,” said Madelynn Matlock, director of international investment at downtown's Bartlett & Co. “The market might have rebalanced it for you.”

        Stock prices today — where the tech-heavy Nasdaq Composite Index been cut in half and the Dow Jones Industrial Average is almost even over the last 12 months — mean investors need to pay more attention to how a stock is priced. Where a year ago investors paid more attention to the potential for a company's earnings growth, investors now need to watch how a company's actual earnings relate to its price.

        “Now I think the game has changed somewhat dramatically,” said Andrew Adebonojo, senior research manager at Fort Washington Investment Advisors. “Valuation is much more important in the stock selection process.”

        Ms. Matlock agreed: “This is the kind of market where fundamentals really, really count.”

        The panelists, however, disagreed on just which sectors of the market investors should be eyeing.

        Mr. Adebonojo said shaky markets and economies tend to drive professionals into “safe haven areas,” such as consumer staples and health care.

        “People just don't stop getting bronchitis because they got laid off,” he said.

        Fred Brink, equity analyst at Johnson Investment Counsel, said he also likes investing in health care companies now because:

        • Their markets are still growing.

        • It's a stable industry.

        • Companies' earnings would pick up even more as the economy gets stronger.

        Greg Weirich, vice president at PNC Advisors, worried, however, that too much money already has flowed into those sectors, leaving better values to be had in stocks such as technology.

        “The problem is ... that the professionals have already gravitated there,” Mr. Weirich said. “They're getting ready to anticipate Fed cuts and moving to the riskier names. So if you're getting into those right now you may get nailed.”

        But Steve Mygrant, director of equity analysis at Fifth Third Bank and a tech specialist, said fundamentals don't look strong for most technology companies. Too many have lousy earnings and it could take too many months for them to recover, he said.

        Still, that weakness is bound to pass.

        Though it may take time, history has proven that those fundamentals — along with whatever weakness the U.S. markets and economy will weather — eventually improve. Mr. Adebonojo reminded investors that the United States has weathered other slowdowns and downturns, such as the early 1990s, and come out stronger.

        Mr. Weirich said that's exactly why investors should remember: “Don't make short-term decisions on long-term assets.”

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