What to do if you're invested

In light of the panic occurring in the markets, some have recently asked me for advice in terms of what to do if they've been invested over the last year. The simple answer is, if you haven't sold by now, today is definitely NOT the day to sell. Although as a trader, I understand that nothing is impossible with the market (including a quick drop to 8000), the metrics of this week's fall has reached historic proportions.

If you are an investor, my recommendation is to spend time researching and coming up with your "dream portfolio", if you do not already own it. Which, in my opinion, most people do not own, because most are invested heavily in mutual funds, which basically move with the indexes. I'm a proponent of active investing, as long as you're willing to do the work. In the end, you should have your own personal mutual fund when the dust clears. Owning a handful of fundamentally sound, growth stocks will seriously outperform any mutual fund or market. You may even find yourself ahead of where you were when the market was at the top!

Tips:
1. Avoid commodity related stocks. Oil CAN go back to $30 dollars, and it won't matter what OPEC does.
2. Avoid penny stocks or unknown small cap companies (the ones on sale right now are the names we all know. unprofitable small cap companies will always be around for you to play with later).
3. Buy a couple companies that are most likely to continue paying dividends.
4. I like China - big cap china names. (Notice how EDU has barely budged?)
5. I like Solar (although it remains to be seen whether they are traded as "commodity" related - if they are, then abandon ship)
6. Don't buy stocks just because they are down 80%, in fact, you should be buying stocks that have outperformed this crisis (down 15% for example). There is a reason for it. When the market comes back, they will continue to outperform and be the first to hit new highs.