As I will be away for the next two weeks and very limited internet access, anything I can not set stops for I have sold and gone to a cash position.
I hope the market Gods go your way.

Take Care

Mark

So now we finally begin to see 'mainstream' articles like this one on CNBC....

Dow Will Sink Below 10,000: Strategist
02 Jul 2008 | 10:22 AM ET

Investors should ignore recent signs of strength and face up to the fact that we will face a prolonged bear market, John Carter, president of Trade The Markets, told CNBC Wednesday.

"Longer term we’re looking at a market that is a bear market," Carter told "Squawk Box Europe."

While we can expect a rally over the next three to five weeks, this is a downward spiral that is not going away any time soon, he said.

"A trend is a trend until it ends, and we’re actually looking for the Dow to take out 10,000 by the end of the year," he added.

There are too few sectors holding the markets up, and too many dragging it down, to consider getting back into non-recession-proof sectors, according to Carter.

"A large percentage [of sectors], like financials, are getting hammered. A lot of the darlings of the past are going to get taken out back and get shot," he said.

Hugh Hendry, partner at Eclectica, also sees few signs that the outlook is picking up for the US economy.

"I think we have to recognize the recessionary forces that are bringing to bear," Hendry told CNBC. "Don't fight that, just go with the flow of the relative momentum."

Hendry said the outlook is particularly bleak for financial and technology stocks -- the two largest components of the S&P 500 -- which he said have both seen a bubble.

"When a sector becomes infected by a bubble…what history reveals is it takes 25 years to regain the highs that we saw in real terms," he said. (This is why the move NOW to protect your principal is so critical)

When it comes to fighting a U.S. downturn, now is the time to relocate assets into gold and oil (Not sure I wholeheartedly agree here), preferably through an ETF tied to the direct price of the commodity, Carter said.

He also said investors should be looking to buy into over-achievers.

"The nice thing is when you get a really down market like this the stars shine out … and when the overall market turns around, that's where you’re going to put your money," Carter said.

“I would much rather buy stocks that are near their highs in an environment like this than try to bottom-fish."

Hendry took the view that in a sustained market downturn, successful investing requires looking for more unconventional assets such as agriculture that have the potential to outperform the market.

"I think the most important thing to know is you don’t have to short this market," Hendry said.

"If you want to stay involved the most important thing is make sure the stock you own is trending higher vis-à-vis the marketplace."

© 2008 CNBC.com

Ok, I have joined the ranks of 'We're in for a long hurt' after reading alot of the posts here and some financial news on Fox, CNBC and the WSJ... so....

Our 401k is with Pentegra(.com) and seeing as how I am not as well versed in most things with Wall street as you guys, but I'm trying to learn more, where would you be placing your nest egg? T-bills/CDs? Foreign stocks?

I love MarkHB's comment... not wanting to try and catch a falling knife!

Under the mattress, maybe?

Nu2,

For IRA/401k type accounts, you can only look to re-balance based on the options available to you in your plan or with your broker (Fidelity/Schwab/etc..).

I am by no means a certified financial planner, and there are likely some better options that the ones I will lay out (ScottL for example got into a Exchange Traded Fund that benefits if financials as a sector drop - has done nicely).

The options I would consider for simply PROTECTING principal at this time would be short term T-Bill options or TIP(Treasury Inflation Protected Securities).

T-Bills are the option on the shorter term 4,13, 26 or 52 weeks.

You will not find much in the way of return at this time (maybe 1.5%), but will keep what you have. Many may argue that due to inflation, you will actually be losing money in these investments, and if you were looking at these as a long-term investment strategy, I would agree. Personally, I wanted to keep what I had, and then be able to evaluate other potential investment opportunities on the 'other side' of this.

Many seem to think that as the quest for capital increases (municipalities, corporations, the treasury, etc...) that yields offered will climb to attract the $$. Other investment opportunities would also likely evolve, however, I don't believe that the 'general market' will provide more than single digit returns for what may be 15+ years going forward.

As for us, wife's 401k had a TIPS option, we took it. My 401k added an option for T-bills, we took it.

Rollover IRAs that we have via Schwab allowed us to buy 4- week T-Bills which is what we are doing there other than some other small amounts I play with on a couple of stocks.

After-Tax accounts (savings, etc.). We set up an account via www.treasurydirect.gov that allows you to purchase Treasuries (T-bills again) directly - these are held in your name personally) in connection with an existing bank account you designate. When you buy, it drafts your account, when they mature, it automatically deposits them back to your banking account.

Would not be keeping much liquidity in traditional bank models at this time. Check your money market accounts with your bank. Some are FDIC insured and others are not. Even so, I don't have any desire to stand in line to file my claim and be prepared to wait years to get any recapture.

Others advocate keeping at least some cash on hand. Whether we get some interruption in traditional finance models (credit cards, etc..) or not, since you won't be sacrificing too much in lost yield, why not have a bit around.

This may or may not make sense for you or your personal situation, but if it offers you some insight, great.

Again, you may find a certified finanicial person that may well provide you with alternatives that would far outpace these suggestions, but I would steer clear of the general 'dollar cost average over time and believe the market will bring you happiness' approach as I think those that employ only that plan will find losses tough to swallow.

Hope this is of some value to you.

Thanks justified. Some of it is a bit weighty for my knowledge (or lack thereof)but after reading it a couple times, it sheds some light!.. I am limited to what the fund offers.. And they (Pentegra) changed the login info so I have to go re-create the profile! Hate when that happens!
Thanks!

Its a fund offered by my employer's 401k plan:

The Fund offers the opportunity to earn rates of interest similar to
those of long-term Government securities but without any risk of loss
of principal and very little volatility of earnings.

• The objective of the Fund is to maintain a higher return than inflation
without exposing the fund to risk of default or changes in market prices.

• The Fund is invested in short-term U.S. Treasury securities specially
issued and only available to the fund. Payment of principal and interest is guaranteed by the U.S. Government. Thus, there is no “credit risk.”

• The interest rate resets monthly and is based on the weighted average
yield of all outstanding Treasury notes and bonds with 4 or more years
to maturity.

• Earnings consist entirely of interest income on the securities.

• Interest on Fund securities has, over time, outpaced inflation and
90-day T-bills.


Understand that this is just a temporary holding-pen, until the market quits heading south. Currently its at 4%.

While it might be a bit counter to what the experts say, my risk tolerance is only about 2 years, since we may want to start living off the money next year. If we can hold-off from doing this for a few years, all the better.

My wife's 401K is a bit more aggressive, so we are kind of hedging between our two funds, so to speak.

Did the Dow do a "dead cat bounce"?

http://stockcharts.com/h-sc/ui

Bear market rallies are fearsome animals. Trade them with great care. My personal persuasion is that we have an upside potential to near 1370 on the S&P, but tech analysis is often trumped by events and the earnings reports this week will be gawd awful. I'm staying short financials and Commercial Real Estate and prepared to add to positions if we bounce further.

patience, grasshopper...

Hate to be cheering for the down side, but would like to get back some on my ETF short of financials! ;(