There is a lot of talk about $ devaluation, and gold/silver appreciating. I know that you do not address specific ‘fads’ of the day/month/year, but this is one of those trends that will really even make the 3% return look bad if the $ gets devalued.

Are you planning to address this in your site or your blog in any meaningful way where we would/could get recommendations of an idea that we could protect our IRA / 401k / Taxable accounts?

Also, is this something that you could add ‘before’ the time comes to your portfolio so that we are already allocated?

Those who heeded this advice did not lose from 40% to 80% of their money. Even those with “expertly” managed 401Ks lost more than a little. Of the thousands of mutual funds it is doubtful that more than 1% actually made a real profit. Now the braggarts are telling their clients that the S&P; went down more than 40% and their account only went down 30%. And those bums actually believe you should be congratulating them.

A properly managed mutual fund or one managed by any financial planner should not have lost more than 10%, maybe 15%. Actually if they knew what they were doing there should have been only about 5% losses and a knowledgeable manager should have shown a profit this year. I did.

The milk is spilt. Get the mop. Life goes on. For the poor investor (pun intended) it is now time to understand what happened and not to let it happen again. Those are the key words, “Not to let it happen again”.

There are times as in this past year when all money should have been parked in a money market account. This is standard procedure during bear markets. Investors don’t make any money, but even more important they don’t lose their money.

As I continue to preach the secret of the market is not buying, it is selling. An exit strategy must be in place at all times. Most fund managers do not have one. Your money should not be with this fund.

Whoever controls your funds should give you a written statement of how much they are will to let your account decline before going to cash. Few will give it to you. Find one who will or learn to manage it yourself. You could not have done much worse in 2008.

There are many good reasons to be long now. Long means it is time for those who were smart enough o sell out in early 2008 to take the rubber bands off their cash and plunk it down on the black. There are some who were smart enough to stay out while the Wall Street roulette wheel was coming up red on every play. The odds have changed.

For those who listen to the voice of the market it is saying it is going to go up for the next 3 months and maybe even 6 months. It will give the Buy N Holders a chance to sell. They won’t. Their brokers will tell them the bull market is back and it is going to make new highs. It won’t.

With a good manager you will have an opportunity to get back about 50% of what has been lost this year.

This thesis is based on the idea that major bear market rallies frequently end on good news, not bad news. Likewise, bull market corrections often end on bad news. With that in mind, the market may be rallying now in expectation of a huge economic stimulus package, something that the news media and most economic pundits thinks is “good news” even if the reality is otherwise.

Under this scenario, the rally lasts until Obama signs that economic stimulus bill plus a 1 to 3 day euphoric blowoff or gap and crap when the world realizes that a true recovery was actually postponed by the recovery package.

Of course, all this talk about bailouts and loan guarantees and avoiding bankruptcy obscures the big question, the elephant in the room as it were, and that’s the underlying demand for automobiles.

The issue, obscured as it is by political motivations and willful misinformation, is actually quite simple. Unfortunately, simplicity has always been Wall Street’s (and politicians’ – the two are now the same) dark secret; there is (was) far more money to be made in taking simple things, such as loaning money to someone to buy a home, and turning them into apparently complex financial structures. So, let’s put it another way.

Ordinarily, when a business/industry fails from poor management and/or (in the case of the banks) overleveraging, what happens? Put aside the issue of what the business/industry is for a moment. Just ask yourself, what happens?

You know what happens intuitively, even if you’ve never opened an economics textbook. It is very simple. Entrepreneurs, seeing the mistakes made by those business/industry operators, rush in to start competing businesses to 1) take advantage of the weakened competition, and 2) operate the business better than the competition having the benefit of seeing their mistakes.

Under normal circumstances, this process happens in every industry. It is the normal cycle of capitalism.

But look at what is happening now. Are there any entrepreneurs setting out to start automotive manufacturing businesses? What about entrepreneurs setting out to charter new banks? You already know the answer to that. The question, then, is why?

First, and most important, it is because the business models within those industries have failed. Second, because the government (taxpayer) has now stepped in to prop up those businesses with their failed business models, it is no longer economically viable for an entrepreneur to try and compete with the government even if the entrepreneur has a better business model. Third, even if it were economically viable, the government is installing roadblocks via the FDIC and other agencies to purposefully make it difficult for entrepreneurs to compete against the failed businesses in those two industries.

“Mrs. Jones, with your cash now earning nothing and stocks down 40% from a year ago, isn’t it time to jump back into the stock market, or at least into longer-dated Treasury bonds? How about corporate bonds, given what they’re yielding over Treasuries?”

Yes, Mrs. Jones is going to hear an earful. And with Federal Reserve Chairman Bernanke reiterating how long he intends to keep interest rates at zero — a not-too-subtle message to push savers out of risk-free cash investments — I’m sure she won’t be alone. In fact, I expect a lot of retail investors to be dragged at pen point down the Trail of Tears into taking risk.

Candidly, I can see the temptation. After 15 months of often steep declines, everything feels like a bargain. And, honestly, from the perspective of every US recession in our lifetime, these truly are bargain prices.

Unfortunately, unless you’re in your eighties, what we’re living through today doesn’t in any way resemble an event from your past. This one is global – and it is secular, not cyclical. And, while they can put a higher floor on the bottom than would otherwise be the case, history suggests that central banks and governments are limited in their ability to counteract this unwinding deflationary cycle.

What this crisis requires is time. And despite all the price cuts we’ve seen, not enough time has passed to say with confidence we’ve reached the bottom. At best, I’d offer that we’re only now just seeing the second derivative of the financial deleveraging that’s underway. And, unfortunately, there are more hard times ahead.

With the passage of time, the pressure on Mrs. Jones and her peers, all earning zero on their savings, will intensify. And I expect many will succumb to the impulse to take on more and more risk, particularly as benefits like the 401(k) match are cut and the need for return in order to one day retire grows.

As much as I wish it were done, I don’t believe it is. In fact, I fear the next 12 months will require even more courage and discipline than the previous 12. During this period, doing nothing (i.e. staying in cash and maximizing liquidity) will feel increasingly lonely as pundit after pundit shills one “historic” opportunity after another.

But in reality, nothing about this crisis is particularly historic. In fact, the first chapter of Charles Kindleberger’s Manias, Panics, and Crashes is “Financial Crisis: A Hardy Perennial.” In it, he goes on to say that “chain letters, bubbles, pyramid schemes, Ponzi finance and manias are somewhat overlapping terms.”

So sorry, Bernard Madoff, but the history books are filled with your ilk.