The Global Slowdown and Your Portfolio

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We're now well into earnings season, and several companies have mentioned that they're seeing a global slowdown. Chipotle and McDonald's are just two examples of companies that been affected by decreasing consumer demand. McDonald's summarized it perfectly by saying the slowdown was "a little more than a European cold." Intel also reported lower demand going forward as the PC industry remains sluggish. Finally, Nike reported weakness in Europe, and UPS just missed earnings and lowered guidance because of uncertainty. Analysts John Reeves and David Meier think that investors can do a few things to prepare their portfolios for a possible slowdown. First, they should have some cash on hand -- 10% in cash might be a good number for the average portfolio. Second, investors should try to better understand the risks they are taking. Finally, it's important to maintain a long-term view for high-quality companies. Time is the friend of businesses like Chipotle, Nike, and Intel.

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John Reeves owns shares of Chipotle Mexican Grill. David Meier does not own shares in any of  the companies mentioned. The Motley Fool owns shares of Chipotle Mexican Grill, Intel, and McDonald's. Motley Fool newsletter services recommend Chipotle Mexican Grill, Intel, McDonald's, Nike, and Nokia. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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