The Labor Day weekend always has a special meaning to me. Tomorrow, it marks the day I arrived in the United States 34 years ago, as a 24-year old with a Masters degree in engineering eager and ready to take on the world.

It took a few years to get acclimated and integrated into a society that is unique in many aspects. No doubt, I had my struggles with language, work and trying to find my own way. I encountered nothing but helpful and encouraging people that assisted me in getting used to a lifestyle far different than what I was used to.

Back then, as a newcomer, I remember a few things that struck me as being very different from the society I grew up in. Here are a few that stuck with me, but there are many more.

One, the lifestyle that many people had by owning their own home at a fairly young age as well as the latest cars that everyone drove. A little later, I learned the secret word to such immediate worldly possessions: Credit. Contrary to my upbringing, the idea here was immediate gratification as opposed to save first and buy later.

Two, the incredible flexibility the job market offers. It allows people at any stage in their lives to change gears and get involved in a different profession if they so chose. Contrast that to Europe, where your professional direction is chiseled in stone the moment you finish an education. Changing gears in mid-life is to this day extremely difficult.

Three, I have encountered people from all walks of life while being involved in my favorite activity, namely tennis. I’ve played in private clubs and on public tennis courts and I’ve noticed a phenomenon that you will not very likely see in Europe: No separation of classes. I have played with multi-millionaires and unemployed construction workers, it did not matter; it was about the game and not your financial net worth.

Four, money does not equal education. This topic comes up at times when I talk with family in Germany. You can rest assured that for the most part a wealthy individual in Europe is also very educated by having a couple PhDs and maybe a doctorate. It’s the way that society works: You have an education and better job opportunities are available. There is no way that you can become the CEO of BMW and not have a doctorate. This is in obvious contrast with the United States where opportunities abound for everyone no matter what the educational background. It’s entrepreneurship at its finest and there is no place like it anywhere else.

Sure, just like any other country, the U.S. has its problems as well. Some will be addressed some won’t; it’s just how it is. However, I am sick and tired or listening to people complaining how bad things are. My standard answer for 34 years has always been “If you don’t like it here, you are free to move someplace else. Try another country. I bet you won’t make it for a year.”

There is a reason that a lot of foreigners want to move to the United States. It’s still the best game in town because there is no place like it anywhere else.

MarketWatch had a feature story titled “Some managers know how to let you sleep at night,” which identified 5 no load funds that allegedly capture much of the gains in good times without suffering devastating losses in down markets.

It’s likely you have heard of most them, and I have even used some when appropriate. They are good performers, not necessarily in the top, but very solid when used at the right time. The article makes you believe that these 5 can be held without regards to market direction, which, of course is a fallacy. Additionally, some have not been around during the past bear market, so they are not necessarily battle tested.

Take a look at a long term chart:

As you can clearly see, the performance varies widely with FAIRX leading the pack. My point is that these funds could be worthy of your consideration (neither I nor my clients have currently any positions) when the market gets out of the doldrums and the trend heads back up.

However, if we are crossing into bear territory, I suggest, as I always do, that you get out of your positions and move to the safety of the sidelines (money market). The simple fact is that in a bear market all equity funds will decline, some more some less. As many have learned during the 2000 to 20003 disaster, there is no safe haven other than cash.

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

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

A week of roller coaster actions left most investors more than ready for a long weekend.

Our Trend Tracking Index (TTI) for domestic funds/ETFs vacillated and has now moved to +3.02% above its long-term trend line (red) as the chart below shows:



The international index also moved to +1.59% above its own trend line, which puts it back on the positive side.

For more details, and the latest market commentary, as well as the updated No load Fund/ETF StatSheet, please see the above link.

A famous person once said that wealthy people are no different than you and I; they only have more money.

This famous line certainly rang true when I read a news blurb in Marketwatch titled “Goldman hedge fund reportedly hit hard.” After Bear Stearns’ disaster hedge fund collapse, it appears that Goldman Sachs is next on list. Its $8 billion Global Alpha fund has fallen 26% this year and almost 40% since July 31, 2006.

To be fair, that fund surged some 40% in 2005, for which Goldman was paid $700 million. Nevertheless, the reality is that times have changed and the chances are great this fund will suffer further especially if it has a large exposure to subprime securities.

The other factor that could contribute greatly to its potential demise is the “herd instinct” of the investor. As I mentioned before, once the trust is broken, even wealthy people get tired of losing money and will want to cash out. Once that becomes public knowledge, there will be a long line of people wanting access to their money. Especially those who also had holdings in the collapsed Bear Stearns funds.

Surprisingly, Goldman Sachs has said that there was an August 15 deadline for investors who want out.

What the article did not say is how much the investors would receive. I don’t have that insight nor does it really matter.

My point is that as an investor, you need to cut your losses even in a hedge fund. Yes, 26% is a lot to lose, although you may be still ahead with previous years gains However, it certainly is far better to take that loss than going down with the sinking ship and ending up with nothing but a “thank you for your business” letter.

If you felt like a yo-yo over the past couple of days watching the activity on Wall Street, you’re not alone. After yesterday’s sharp losses, the market came back with a vengeance and erased most of the deficit.

The good news of this roller coaster ride is that there seems to be a threshold where buyers can’t resist stepping back in and pushing the market out of the doldrums. If these lower levels hold, I would view this as a stepping stone which may form the basis for further upside moves. Of course, Fed chairman Bernanke’s letter saying the bank will ‘act as needed’ cheered the crowd and no doubt contributed greatly to the rebound.

Our Trend Tracking Indexes (TTIs) recovered as well and are hugging their long term trend lines as follows:

Domestic TTI: +2.46%
International TTI: +0.92%

Again, as previously announced, I will wait for further upside confirmation before moving back into the international markets. Let’s see if tomorrow brings some more excitement.

No positive news anywhere with weakening consumer confidence and more housing weakness leading the charge for the bears. This might not have been too bad of a punch but lack of commitment from the Fed in regards to an interest rate cut sent the market south with the Dow losing 280 points.

Our Trend Tracking Indexes (TTIs) followed suit and are hugging their long term trend lines as follows:

Domestic TTI: +1.23%
International TTI: -0.90%

What a difference a week makes. After last week’s rally, the markets seemed to have calmed down but now we’re right back in the volatility game. As I mentioned in previous posts, I’ve been holding off re-investing in the international arena, despite the international TTI having moved above its trend line.

As this market action proved, we are still in shakeout mode and may be dancing around the trend line for a while. This is why I want to see a clear break to the upside before making any commitments.

This downside move has brought a potential domestic Sell back into the equation. I will liquidate my remaining domestic holdings if either their 7% sell stops get triggered or the domestic TTI crosses its trend line to the downside; whichever occurs first.