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.

While this topic is a little bit outside of No Load Fund/ETF investing, it nevertheless struck a cord with me.

What happened? Chrysler announced a “shocking” plan to lay off some 13,000 workers and decrease annual production by 400,000 vehicles. Additionally, word leaked out that Mercedes is considering breaking its ties with Chrysler.

So far, this sounds like a good business decision to me, although I fail to understand why it took them 9 years to come to that conclusion. To me, it was a questionable deal to begin with, and I am not sure if it was simply ego driven (let’s see if we can do it) or if there were actual business fundamentals involved.

I think that the original takeover was based on the false premise that if Mercedes was in charge and could improve the quality of the Chrysler cars, higher profits would surely follow. As it turned out, this is a good news/bad news scenario.

The good news is that the quality of the cars has indeed improved remarkably. I can personally attest to that, since I am on my third Jeep Grand Cherokee/Laredo. The latest model was really a step up in terms of handling and overall design, which pleased me as a consumer. I am even more pleased by the fact that, for the latest model 2006, I paid about the same, if not slightly less, than for my first one 15 years ago.

That is not what Mercedes had in mind when they took over Chrysler.

I am sure that, along with an increase in quality was supposed to be an increase in price. This is where the bad news comes in. Mercedes miscalculated by not considering the “image factor” of the American car buyer. Unfortunately, as is well documented, American car manufacturers can only sell their cars if the accompanying offer includes a steep discount, a cash rebate or zero percent financing. It’s a sad fact of life.

Okay, so Mercedes looks to streamline the operation or possibly sell the Chrysler division to someone else. That’s understandable.

Here’s where it gets strange. The first suitor expressing an interest in such a deal is General Motors.

Huh?

A company in dire straights, which has not been able to compete in 30 years, has financial difficulties in most of their enterprise, including their sub prime loan division, and they’re still thinking they’re king of the hill.

If the Germans can off that albatross called Chrysler to GM, I have to worship the ground they walk on. If GM actually goes through with it, it’s got to be the dumb deal of the week or even the year.

I really would like to understand the reasoning, but I just can’t seem to figure it out. If you have some logic as to why Chrysler would be a good fit for GM, please share it with me.

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

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

The markets rallied sharply this week after soothing comments from Fed Chairman Bernanke about the economy. Our Trend Tracking Index (TTI) for domestic funds moved higher as well and now sits +6.10% above its long-term trend line (red) as the chart below shows:

The international index also moved higher and currently sits +11.07% above its own trend line, as you can see below:

We’re living in the information age, so it’s hard to imagine that an individual, claiming to be an investment professional, can get away with any type of scam. But it just happened again.

I am not talking about an advisor exposing your portfolio to undue market risk or failing to implement a stop loss discipline to limit any potential losses. I am talking about intentional fraud and deception.

A recent article in MarketWatch described a 38-year old, who was arrested in Las Vegas on charges of defrauding senior citizens of some $2 million. The “clients” were impressed by his obvious display of wealth via fancy automobiles and expensive watches. They did not know about his gambling debts, or his $5,000 per day strip club habit.

The article went on to say that none of the alleged victims had bothered to verify whether that individual was actually registered as any type of advisor. That’s hard to imagine.

Besides the obvious, what else can you do to avoid becoming a victim when selecting an advisor to manage your assets?

Here’s the most important advice I can give you. Any independent investment professional works with a reputable company that functions as the custodian for clients’ assets. There is no reason to ever make a check payable to anyone else but the custodian. Read that sentence again!

Most advisors work with well recognized custodians such as Fidelity, Schwab, Vanguard, TD Ameritrade and others. If it’s not a household name, you can certainly find out a lot by doing quick internet search or contacting the SEC.

In my advisor practice, it happens from time to time that a client sends me a check, maybe for an IRA contribution, and it is made payable to my company. I am not allowed to endorse it, I have to return it and get another one from him made payable to the custodian.

Bottom line is that, if anyone, pretending to be an investment professional, wants to have you make a check payable to him or his company name, run as fast as you can. You may have just avoided an expensive learning experience.