Q. From your comments you clearly expect to see more pressure on energy stocks. Why shouldn’t we just sell everything now and wait for a bottom?

A: Fair question. There are basically three reasons. First, market history teaches us that when energy does hit a final bottom, spotting it will be much more a matter of luck than insight or skill. And in any case, it won’t really matter much since anyone who’s invested within say 10 percent or so of the bottom will realize almost all of the upside from the recovery, provided they’re in the right stocks.

It’s also true that the hardest time to invest emotionally is likely to be at the bottom, which means almost no one is going to make that move to buy there. The best way to avoid that kind of paralysis is to scale into positions in best in class companies gradually when prices are low, i.e. close to the bottom as we’re doing now in Energy and Income Advisor.