Some Rays Of Hope?

Everything looks cheap right now. But something to keep in mind is that the balance sheets in tech and health care companies remain relatively clean. Some investors are particularly optimistic about tech, which is regarded as having fairly solid book valuations. Such strong financial characteristics make it less likely that investors will witness massive asset write-downs.

Consumer staples is another area doing well on a relative basis. That's another case where the sector's leaders have fairly clean balance sheets with relatively little debt. Many also have retained cash-generation capabilities despite an otherwise ugly business environment.

Another positive for consumer staples is that dividend cuts are considered less likely in that corner of the market. Again, positive operating cash flow is proving to be a key as investors seem to be valuing safety over high-flying growth businesses.

But investors aren't focusing now on the cash-flow ratios as much as the stability of a company's cash generation operations, observes Hintz.

"People are willing to pay a little more for more secure businesses with good long-term cash-generating capabilities. And it's the same with dividend yields -- they'd rather buy a company paying a stable 2% dividend than one with a 5% dividend that's more susceptible to getting axed," he said.

From a fundamental standpoint, energy companies could also be viewed as weathering the current storm relatively well. While the industry is fairly diversified, for the most part players in this sector continue to hold strong balance sheets, says Hintz.

"Even though oil and natural gas prices are down, energy companies still have enough cash on hand to remain in pretty strong financial condition," he said.

But as investors try to find the best corners of the market to find cover, strategist Baird adds that a certain amount of reality has to be taken into account.

"Whatever sector you look at, this current downturn has been broad and deep in nature," he said.

Russell 3000 Index: Highs & Lows (Jan. 3, 2007 - March 4, 2009)

Russell 3000 Index: Valuations (Through Jan. 30, 2009) 

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