The value investing pioneer, Benjamin Graham, averaged an annual performance on his stock picks of over 17% through a more than 50 year period that began before the Great Depression. Had his dividends been included, the total return would likely have been close to 20% a year. During his later years in business, he and his firm set out a few simple rules for ordinary investors who had the time, talent, and inclination to do their own analyses. For instance: buy only stocks with both good value and a margin of safety. And Graham did more than anyone before to quantify definitions of good equity value and safety margins.

1. Stocks with a price to earnings ratio of 9.3 or below and debt to equity of .99 or below;

2. Stocks with price to book value .8 or below and debt to equity .99 or below.

3. Stocks with dividends of 3.6% or above and debt to equity .99 or below.

The values in rules #1 and #3 above vary depending on the current estimate of Aaa corporate bond yield (currently about 5.4%), with which stock values are compared. Rule #2 is applicable at any time. There are many other guidelines in Ben Graham's value lexicon, but in my opinion these are the simplest and most readily applied by non-professional investors.

A few such assets will be bought out by other companies or private concerns, usually at a profit to the investor. Over the long haul, some of the others may prove to have been bad investments. Their companies may go bankrupt or at least never come back from their lows. But on average enough will turn out to be profitable gems to make this approach rewarding. Even if one does not do as well as Ben Graham, chances are the record will be better than that of the major averages and with lower risk of permanent capital loss.

In general, I would hold each in a portfolio of several till the shares are bought out for cash and otherwise for 2 years. (Most, if they were going to do so, would likely have realized their market value potential within that period.)

If one prefers mutual fund investing, as is appropriate for most folks leading busy lives, a good way to deal with a falling stock market is to dollar-cost-average, making regular new investments in the most trusted funds, for instance adding $400 a month to one of them through an employer's tax-deferred 401k Plan, thereby automatically buying more shares when prices are down and fewer when they are up, reducing the overall price per share.

(Disclosure statement: Larry and Val have holdings in some of the suggested assets but do not "make a market" in any of them and do not derive any direct benefit from recommending them, except perhaps for a bit of smug self-satisfaction.)