Dow Jones @ 0?

[artto]

#1 In 17 more days of returns like todays loss the stocks that make up the Dow will be at zero (assuming no up days)! Completely worthless.

#2 Sorry to be the bearer of this news but we have dropped from a high of a little over 14,000 to 7500

#3 The gurus on CNBC say we have'nt seen the bottom yet.

#4 Retirement portfolios have been decimated especially painful to the baby boomers nearing retirement.

#5 Any sage advice out there?

#1 Yes, true. But "IF" is the "biggest" word in the dictionary. "IF" my grandmother had "balls" she'd be grandpa.

#2 For what its worth, according what I know, and how I measure things and the criteria I use, "support" on the DOW is 7200 give or take a few percent. The S&P500 has already made its mark near perfectly, and believe it or not, the NASDAQ looks like it still has a way to go. The DOW is a poor measure of stock market performance anyway ~ not so much attention should be paid to it. For the Wilshire5000 which essentially includes 90% of the entire market cap support is 7343 & it closed just above that Friday. If things breakdown significantly below these points its anyone's guess as pretty much all techical, fundamental, qualitative, quantitative, sentiment historical precedents of any kind have already been broken.

#3 There aren't any gurus on CNBC

#4 Yes, for those who follow the advice of Wall Street ~ diversify ~ buy & hold. I can honestly say that as of this moment I haven't gotten hurt to bad. A few bruises, a couple of minor cuts. Diversity won't protect you under these conditions, it just means that almost everything will be gone instead of everything.

#5 Yes. If you're not inclined to "do the homework" AND learn how to actually use and apply that information, this is what you should do.

Don't invest in individual stocks. Just use an exchange traded fund (also called ETF) that tracks a major index like the S&P500 (.SPY).

Now here's the "hard" part. Its not really difficult but IF you want to be in control this is about the easiest way to do it. Find a website that has free stock charts. This stuff is available all over the web ~ CNBC, CBS MarketWatch, Bloomberg, your broker, etc. You will need to place what are called "simple moving avereage" (SMA) on the chart. There will be two moving averages used. One with a 50 day period, the second with a 200 day period.

When the 50 day SMA is going up, and it has crossed above the 200 day SMA, you're "in" ~ buy. When the 50 day SMA breaks below the 200 day SMA, you're out.

Part Two: During the downturns you should not stop contributing to the account, just allocate it to cash/money market fund. When the SMA's give a buy signal you start to contribute the portion you would have every week along with the current week's contribution.

This will keep you out of a lot of trouble. Not diversified you say? I'd say 500 stocks from all industry groups is plenty of diversification.

I started getting my sell signals back in December 2007. For what its worth my current allocation is 60% bonds (fund), 35% cash, 25% stocks (individual). In the bond funds 60% is short term/40% intermediate.

[Tarheel]

Thanks Artto......many good points. I agree with the sma/chart suggestion and have looked at that in the past. I really don't agree with the idea of ETFs. I think its much easier to research individual stocks and I think with ETFs you not only buy the top 20% performers but the bottom 80% as well. I guess I tend to agree with folks like Ken Heebner of the CGM funds who feel that diversification is for folks with little conviction in their picks. I will be the first to say that Ken isn't looking real smart right now but who is. Isn't it easier to keep track of 5-8 good stocks then the hundreds that make up an index?

[artto]

#1 I really don't agree with the idea of ETFs. I think its much easier to research individual stocks

#2 and I think with ETFs you not only buy the top 20% performers but the bottom 80% as well.

#3 I guess I tend to agree with folks like Ken Heebner of the CGM funds who feel that diversification is for folks with little conviction in their picks.

#4 I will be the first to say that Ken isn't looking real smart right now but who is.

#5 Isn't it easier to keep track of 5-8 good stocks then the hundreds that make up an index?

#1 Wrong. That's what Ithought. Until I found out that one of the smaller fund managers, very few who I have any respect for, and whose "techniques" and "indicators" I use, uses mainly ETF for their trading performance. And what was their trading performance this YTD? They are one of only four that are up for the year. CNBC reported this.....and this guy HATES CNBC, but made an appearance anyway. (scary) And actually following the ETF's is a very good way to gauge the overall market as well as specialized segments.

#2 Absoultely not true. You need to be able to analyze where the money is flowing to. Only buy the strongest of the strongest of the strongest. Bottom fishing ~ is for scavengers. There are very few times the scavengers get anything "good". BUT, once in a while it happens (this is probably one of them ~ but how much and how long?)

#3 I believe it was William O'Neil that said "Diversity is an excuse for ingnorance". Like I said, diversity may help cushion the down fall ~ instead of loosing 100% you only loose 80%. But its still ignorance based. Be in the right place(s) and you'll only loose 5-10% or even make money.

#4 Some people are looking very good. With my asset allocation, even IF my stocks lost half their value (as most people's have), that equates to a maximum of 12.5% loss for my portfolio not including dividends and interest. Loosing a year or so of gains is one thing. Losing a decade, or two decades worth is something else.

#5 Yes, it is, IF, you are actually capable of doing that. EASIER SAID THAN DONE. But reality dictates that water level raises and lowers all ships. Would you rather be in the deep water when this happens, or near the shore?

[Tarheel]

In response to your #4....I am envious.

Please feel free to send me a pm and give me some pointers[]

[artto]

No email necessary.

The basic entry and exit filters I discused in my 5:11pm post