Last Sunday, I talked about the impossibility of being able to please all the people all of the time with my blogging efforts. I received a lot of commentary and emails, some of which you can review here.

Feedback is a valuable component of any business or any writer whether he gets paid for his efforts or makes a voluntary contribution. If you work for a company, the feedback you receive consists of an annual job review, along with raises, pay cuts or even termination.

A business receives feedback from its customers although many organizations seem to have forgotten that fact and don’t show too much interest in how their customers feel about them. I’m sure you have come across this annoying fact many times.

Then there are others who try to take feedback to the ultimate level. Some of the better known fast food chains insist that their top ivory tower executives spend at least one week a year behind the service counter, so that they never forget who generates the revenues.

And who can forget the wonderings of Lee Iacocca, who walked the assembly lines of Chrysler talking to the mechanics as to how things could be improved. There is no better way to solicit feedback than from the man who actually does the work.

Then there is the other extreme that comes to light when you have too much money and you are surrounded only by brown-nosing “yes-men” so that the only reality you are exposed to is phony compliments telling you how great you are. Entertainer Michael Jackson comes to mind.

The bottom line is that we’re all better off if we get some kind of feedback regarding our efforts. Usually that requires that you check your ego at the door first, before wading into the unknown. I for one appreciated your comments, which where all constructive and some contained valuable suggestions, however, most opinions were evenly divided, which supports my theme that you can’t please everybody.

Many readers liked my references to other articles, some didn’t. I will keep continuing on the same path, but try to condense and reduce wherever I can, which I already attempted this past week.

Everybody has an opinion on this subject, even former President Bush had to chime in as the following video clip shows.

http://www.youtube.com/get_player

Don’t kill the messenger; I thought this was very funny.

In regards to my recent post “7 Years Of Wealth Wiped Out,” reader VR had this comment:

It’s almost funny when I try to talk people out of buy-and-hold strategy and point them to your blog for market-timing.

Everyone is afraid of missing out on a big rally. They don’t really mind losing more than 50% of their investment to a bear.

The worst is that no one believes that the market could go further down from this level.

It’s hard for me to believe that anyone would be more concerned about missing out on a rally than protecting himself from downside losses. I suppose that old habits die hard because the buy and hold proponents have done a great job of brainwashing the public for a long time.

However, numerical facts, which most don’t bother to look at, show a different picture. You most certainly remember the last bear market of 2000, the brunt of which we avoided by selling on 10/13/2000. On that date, the S&P; 500 stood at 1,374. Two days ago, it closed at 779, which is a loss of about 43% over some 8-1/2 years.

Since most investors and professionals alike are desperately trying to beat the S&P; 500 performance, and most fail to do so, many portfolios have done worse. Looking at it another way, year over year, this century has not been kind to the buy-and-hold investor as the following chart shows:

This means a portfolio with a starting value of $100,000 would now be worth $68,000. 8 years of investing via buying and holding and nothing but losses to show for.

If the markets don’t provide us with a significant rally over the next couple of years, many investors will become acquainted with our own version of the “lost decade.”

Since bear markets are a fact of life, and can strike at anytime, a smart investor needs to recognize that fact by using some sort of an exit strategy. This century has shown that selling at the right time is far more important than when and what you buy.

Not selling can have a devastating effect on your portfolio, as we’ve seen, while missing out on the initial stages of a bull market will merely reduce your potential profits.

My latest No Load Fund/ETF Tracker has been posted at:

http://www.successful-investment.com/newsletter-archive.php

Continued worry about the survival of the banking system pulled the major indexes deeper into bear territory.

Our Trend Tracking Index (TTI) for domestic funds/ETFs remains below its trend line (red) by -10.40% thereby confirming the current bear market trend.



The international index now remains -20.43% below its own trend line, keeping us on the sidelines.

MSN Money reported that another alleged fraud has taken place (sorry, no link):

The markets took it on the chin yesterday with all major indexes heading sharply south and honing in on last November’s lows. Actually, the Dow came within 31 hundredth of a point of taking out the November 20th level.

The November low of 752 of the S&P; 500 held up so far, but we have moved within striking distance. Causing this ruckus was the fear and worry that the stimulus package most likely won’t eliminate any recession pains.

In addition, Wall Street traders may have finally woken up to the fact that there is a recession going on around the world that seems to be increasing in speed as well as in magnitude and that other stimulus packages may not work either.

To readers of this blog, this should come as no surprise as I have questioned the wisdom of any stimulus or bailout program from the very beginning. It now remains to be seen if there is more follow through to the downside. If the 752 level on the S&P; is violated, you could see some indiscriminate selling, since this bottom has been hailed as the real thing.

To be clear, a break below it could bring the widely forecast 600 to 650 level into play, which would be absolutely devastating to the buy-and-hold crowd. Being safely on the sidelines is the only appropriate position during these times of madness.

MarketWatch featured a story titled “Seven Years of Wealth Gone.” Here are some highlights:

The nest egg of the typical American family is smaller now than it was seven years ago, according to Federal Reserve data released Thursday.

“But a lot has happened” since the end of 2007, a Fed economist said. As of October, median net worth had fallen to $98,900, down 3.2% from the end of 2007 and 2% below the level reported in the 2001 survey that was conducted after the dot.com bubble burst. Since October, stock prices have fallen another 15%, while home prices have fallen at least 2%.

These facts simply support my argument that consumers have reached a dead end and are in for some changes. No matter how much stimulus is being pushed via various packages, most families are forced to make the switch from spending to saving with easy access to credit now being history, as I pointed out yesterday.

Lost wealth will need to be rebuilt via stringent savings programs and elimination of unnecessary expenditures. With many retirement accounts having been cut in half last year, I can only hope that investors have learned their lesson and run away in droves from anyone preaching buy and hold combined with a canned asset allocation program.

I for one will continue on the path of spreading the word about trend tracking as it seems to have been the only investment method which was validated last year.