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

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

The markets stabilized after last week’s sharp sell off and the major indexes gained slightly.

Our Trend Tracking Index (TTI) for domestic funds inched higher as well and now sits +3.71% above its long-term trend line (red) as the chart below shows:

The international index also recovered and currently sits +6.84% above its own trend line, as you can see below:

Last week’s severe market drop was felt around the world. Despite a solid rebound today, it’s still too early to say with any certainty if the correction is behind us.

Many investors feel that proper diversification will protect them from sharp corrections in the market. Last year’s drubbing during May/June 06 and last week’s global down turn had one thing in common: There was no place to hide. Even traditional hedges such as gold (IAU) and commodities (DBC) were down for the week -6.06% and -1.71% respectively.

Looking at extremes, the worst performer was Malaysia (EWM), down -12.04%, while utilities (XLU) dropped only -1.32%.

The point is that the world, and with it all financial markets, has become such an intertwined place that there is no longer a safe haven to move your money into.

Your best bet is to have a sell stop discipline in place that will get you out of the market and into the safety of a money fund, should a trend reversal occur. This will at least give you a chance to avoid serious damage to your portfolio rather than staying invested and simply hoping for the best.

The best part about having a readership of over 18,000 to my weekly No Load Fund/ETF Tracker is that I get a lot of commentary and feedback, which always seems to broaden my horizon.

After last week’s global market meltdown, reader Don had this to say:

“Ulli: I’m not sure what your political nature is, but I thought it was a poor move on the part of CNBC to have Hillary Clinton on national TV at the height of a market downturn exploiting the dire economical conditions of our economy and how we are owned by foreign investors.

Everyone who invests knows there is a huge influx of foreign capital in our markets and government investments. I fail to recognize why CNBC would allow this type ‘political outrage’ solely for the purpose of allowing someone to campaign for our highest office. This certainly didn’t help quiet the markets toward a 400+ point downturn.”

While I did not see the interview, I have to agree with Don’s observations. This moment of crisis should have given someone the opportunity to rise above petty politics and make a classy statement about the underlying strength of the economy or the resolve of the American people to deal with whatever adversity might come along.

Seems that even former Fed chairman Greenspan only managed to utter the dreaded “R” word (as in Recession), and thereby fueling the fire, instead of leaving center stage to those who have assumed his high office.

Freedom of speech is a great thing, but with it comes a certain responsibility once you have climbed up high enough in the political food chain. That’s my view, what’s yours?

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

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

A worldwide sell-off starting in China caused all markets to decline sharply, but none of our sell stop points were triggered.

Our Trend Tracking Index (TTI) for domestic funds moved lower as well and now sits +3.22% above its long-term trend line (red) as the chart below shows:

The international index also dropped and currently sits +5.76% above its own trend line, as you can see below:

For more details, and my market commentary, please see the above link.

The markets corrected in a big way today with all major indexes closing sharply to the downside. It was one of those days, where you could not find a place to hide.

While you can read about what happened in any newspaper or on your favorite financial web site, I want to briefly talk about how this drop affected our trend tracking methodology.

The answer is “not at all.”

Here’s how the day played out as far as our Trend Tracking Indexes (TTIs) is concerned:

TTI for domestic funds dropped from +5.79% (on 2/26/27) to +3.99% today.
TTI for international funds dropped from +10.25% (on 2/26/07) to +6.90% today.

In other words, the long-term uptrend is still alive as of right now, and we need to monitor to see what develops in the next few days.

What about our sell stops? As you know, for domestic and international funds we use a sell stop point of -7% off a fund’s high. None of our holdings have hit this point today and many have dropped off their highs by only -2.5% on average. That means no change in our holdings.

How about sector and country funds? In that arena, we use sell stops of 10% and none of our positions have violated that point either.

Bottom line is that this day of a market meltdown, while certainly reducing some of our unrealized gains, has not had an impact on our invested positions.

One day events usually don’t make a trend. This is not to say that this could not be the beginning of a long-term reversal, but it’s too early to tell. As long as you have a plan in place, as I have been writing about for a long time, you should not make panic decisions based on today’s activity. If some of your stop loss points got hit, by all means, take action. If they haven’t, keep monitoring the activity and let the markets tell you when it’s time to exit.

Trying to keep your emotions out of the decision making process on days like this is the key to becoming a successful long-term investor.

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

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

The markets slipped slightly this week, as traders were occupied with higher oil and commodity prices, problems for sub prime lenders, weak housing, a worse than expected CPI report and Iran’s nuclear ambitions.

Our Trend Tracking Index (TTI) for domestic funds moved higher as well and now sits +6.03% above its long-term trend line (red) as the chart below shows:

The international index also moved higher and currently sits +10.63% above its own trend line, as you can see below:

For more details, please see the above link.