Many Americans are getting scared of an economic double dip. They point out to a teetering European economy, the nearly exhausted federal stimulus and declining retail sales and manufacturing as evidence. Stock market prices have also decreased by 10% since April and investors are highly pessimistic.

But some perspective is needed here.

First, history has shown that economic double dips are rare. There have only been three since 1913, the last in 1981. What more usually happens are economic recoveries after going through major crashes. Ninety percent of the time the economy hits a speed bump in 10 months of a rebound, characterized by huge decreases in manufacturing, sales and stock prices.

But the expansion in the economy will be slower this time. Predictions for gross domestic product growth are at 3.5% for 2010 to 3.1% — and 2.7% in 2011.

So if you are investing, what should you do?

First, try to avoid companies that make goods other than necessities. Think Wal-Mart. But don't be afraid of technology stocks, because consumption in these industries is largely determined by business, not consumer, spending. Look for stocks that don't rely fast-growing economies. That means going for the bluest of the blue chips in the stock market.

For now cut down on equities, maybe by five to 10 percent. So if you have a 60% stock — 40% bond/ cash portfolio now, try to convert it into a 70% stock — 30% bond/cash portfolio.

Right now Treasuries are still expensive. So move that money into cash, so you can shop for stocks at lower prices later.