Cash for crash?

QI’m considering selling my stocks and keeping the cash in case the market crashes so I can grab some bargains. Is that a good idea? — S.W., Jeannette, Pennsylvania

AIf you sell your stocks and the market does crash, you will have acted brilliantly. But what if the market keeps rising for a good while longer? You’ll miss out on a lot of gains. No one knows what the market will do in the short term. In the long run, it tends to go up.

That said, keep any money you’ll need within the next five (or even 10) years out of stocks, since a crash can happen at any time. But otherwise, it’s often best to remain fully or mostly fully invested, and to try to add to your holdings when it sinks. If you’re not comfortable in stocks, though, sell some or all of them.

QI’m intrigued by certain industries. How can I learn enough about them so I can invest in them? — J.O., Dallas A Industries vary in their complexities, so some will be easier to understand (retailing, travel, consumer products) than others (biotechnology, financial services). You’ll learn the most by reading broadly. Read many annual reports of companies in the industry, including the comprehensive 10-K reports that detail each company’s successes, challenges and plans. Don’t worry if you don’t immediately understand it all — many concepts will sink in over time.

Your brokerage may have Wall Street analyst reports available for companies of interest, and you’ll likely find articles at Fool.com and elsewhere on companies of interest.

If you’re serious about developing investing skills, learn more about accounting. Being able to understand financial statements is very valuable.