How We Eluded The Bear Of 2000

The date October 13, 2000 will forever be embedded in my mind. It was the day after our mutual fund trend tracking indicator had broken its long-term trend line and I sold 100% of my clients' invested positions (and my own) and moved the proceeds to the safety of money market accounts. Some people thought we were nuts, but I had come to trust the numbers.

The shake out in the stock market, which started in April 2000, had all major indexes coming off their highs, violently followed by just as strong rally attempts. The roller coaster ride was so extreme that even usually slow moving mutual funds behaved as erratically as tech stocks.

By October, the markets had settled into a definable downtrend, at least according to my indicators. We sat safely on the sidelines and watched the unfolding of what is now considered to be one of the worst bear markets in history.

By April 2001 the markets really had taken a dive, but Wall Street analysts, brokers and the financial press continued to harp on the great buying opportunity this presented. Buying on dips, dollar cost averaging and "V" type recovery were continuously hyped to the unsuspecting public.

By the end of the year, and after the tragic events of 911, the markets were even lower and people began to wake up to the fact that the investing rules of the '90s were no longer applicable. Stories of investors having lost in excess of 50% of their portfolio value were the norm.

Why bring this up now? To illustrate the point that I have continuously propounded throughout the 90s; that a methodical, objective approach with clearly defined Buy and Sell signals is a "must" for any investor.

To say it more bluntly: If you buy an investment and you don't have a clear strategy for taking profits if it goes your way, or taking a small loss if it goes against you, you are not investing; you are merely gambling.

The last 2-1/2 years clearly illustrate that it is as important to be out of the market during bad times, as it is to be in the market during good times. Want proof?

According to InvesTech's monthly newsletter it turns out that, measuring from 1928 to 2002, if you started with $10 and you followed the famous buy-and-hold strategy, that $10 would become $10,957.

If you somehow missed the best 30 months, your $10 would only be $154. However, if you managed to miss the 30 worst months, your $10 would be $1,317,803! Thus, my point: Missing the worst periods has profound impact on long-run compounding. There are times when you end up better off by being out of the market.

Interestingly enough, if you missed the 30 best months and the 30 worst months, your $10 would still be worth $18,558, which is 80% higher than the buy-and-hold strategy. This all comes about because stock prices generally go down faster than they go up.

Wall Street and most people tend to overlook the value of minimizing loss, and that is exactly why the bear demolished more than 50% of many peoples' portfolios while I and those who trusted my advice escaped the worst of the beast's rampage.

About The Author

Ulli Niemann is an investment advisor and has been writing about objective, methodical approaches to investing for over 10 years. He eluded the bear market of 2000 and has helped hundreds of people make better investment decisions. To find out more about his approach and his FREE Newsletter, please visit: www.successful-investment.com; www.successful-investment.com

weekly home cleaning Highland Park ..
In The News:

Threat intelligence firm Synthient uncovers one of the largest password exposures ever, prompting immediate security recommendations.
Viral video shared by Elon Musk shows Tesla's Optimus humanoid robots performing tasks from cooking to construction, garnering over 58.5 million views on social media.
Chinese hackers used Anthropic's Claude AI to launch autonomous cyberattacks on 30 organizations worldwide, marking a major shift in cybersecurity threats.
Apple's new Sleep Score feature gives you a rating for your nightly rest quality. Learn how to set it up on your Apple Watch and iPhone today.
Essential phone settings to enable before losing your device, including Find My network, location services and security features for iPhone and Android.
The Fox News AI Newsletter gives readers the latest AI technology advancements, covering the challenges and opportunities AI presents.
Cybersecurity research shows weak passwords remain a major threat, with simple patterns and number sequences putting millions of accounts at risk.
New Android malware BankBot YNRK silences phones, steals banking data and drains crypto wallets automatically. Learn how this advanced threat works.
FDA approves first human trial for Paradromics' brain-computer interface that could restore speech for paralyzed patients through neural technology.
New phishing platform QRR targets Microsoft 365 users across 1,000 domains in 90 countries. Learn how to spot fake login pages and protect your accounts.
OpenTable now uses AI to track your dining habits and share insights with restaurants. Learn what data they collect and how to protect your privacy.
Google's discontinued Nest thermostats still secretly upload home data to company servers despite losing smart features, raising serious privacy concerns.
New Android malware NGate steals NFC payment codes in real-time, allowing criminals to withdraw cash from ATMs without your card. Learn protection tips.
DoorDash confirms data breach exposing customer names, emails, addresses after social engineering attack. Learn how to protect yourself from scams.
Concerned about Google's AI scanning your Gmail? Learn how to disable Gemini features that access your emails, Drive files and Chat messages for privacy.
Google warns Android users about dangerous fake VPN apps hiding malware that steals passwords, banking details and personal data from phones and tablets.
Apple's digital passport feature lets iPhone users breeze through TSA checkpoints this holiday season using Digital ID technology at 250+ airports.
A new phishing scam targets family photos with fake "Cloud Storage Full" alerts. Criminals steal credit card information through fake sites. Learn protection tips.
South Korean scientists create ultra-thin fabric muscles that turn clothes into robotic assistants, lifting 33 pounds while weighing under half an ounce.
Archer Aviation has acquired Hawthorne Airport for $126M to launch an LA air taxi network ahead of the 2028 Olympics, featuring AI-powered eVTOL operations and next-gen aviation tech.
Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.
Fake AI apps disguised as "ChatGPT" and "DALLĀ·E" are flooding app stores with dangerous malware that steals data and monitors users without detection.
Fake buyers demand specific vehicle reports from unknown sites to steal credit card information from car sellers, but warning signs can help identify these scams before paying.
Android users can now manage apps across multiple devices more easily with Google Play Store's updated remote uninstall button in the latest update.
NASA's Perseverance rover discovers shiny metallic rock on Mars that could be a meteorite from an ancient asteroid, containing high levels of iron and nickel.

Understanding a Stocks PEG Ratio

A PEG ratio cannot be used alone but is a... Read More

Selling

The stock market has been going up for more than... Read More

What is the Most Important Indicator of All?

Most stock market traders have a favorite technical indicator.The one... Read More

Historical Briefing: Stocks, Finance and Money

The World Bank claims that some two billion of the... Read More

Lies, Damn Lies and Mutual Fund Returns

How many times has this happened to you? You're at... Read More

Trading Education: The Best of Both Worlds!

I made my very first investment in the stock market... Read More

The Shadow

The Shadow knows. There used to be a radio program... Read More

Online Investing & Stock & Share Trading: 4 Reasons Why Most Online Investors & Traders Go Broke

Are you attracted to the idea of being in control... Read More

Oil Stocks CHK WLL - What Is Their Worth?

(1) CHK stock price $16.74, NAV $32.5CHK is my favorite... Read More

How Covered Calls Turned a Trader Around

Sidney felt sick as she looked at her latest OptionsXpress... Read More

Robert Rodriguez Weathers the Stock Market

Robert Rodriguez likes to buy stocks at their lows. When... Read More

Understanding the Bulls and the Bears

If you've ever flipped on the television to CNN Financial... Read More

Being Wrong Buying Stock is Okay

Being wrong is OK, but let's not carry it to... Read More

Never Lose Money

Never lose money in the stock market again. Yeah, I... Read More

Do You Know What is the Single MOST Critical Mistake in Trading the Stock Market??

Well maybe that's overstating it a little, but it's certainly... Read More

Why This Bear?

People are constantly asking me why is the stock market... Read More

Who Knows?

The Shadow knows. Remember him? It seems a shadow has... Read More

The Importance of Using Stop Loss Orders When Spread Trading the Financial Markets

A Guide to Using Stop Loss Orders Stop losses are... Read More

What the Hell is a Stock option?

A 'stock option' is a contract between two parties giving... Read More

Fools Gold

The stock market has been in an up trend for... Read More

True Investment Road Maps

If you don't know where you are going any road... Read More

Investing in the Stock Market

From the book 'The Stockopoly Plan' by the author Charles... Read More

Traders, Defend Against the Dreaded Death Spiral.

It has often been said that there is only two... Read More

?Fears Only Enemy Is Action?

What a great statement!I just heard someone use it in... Read More

Frog In The Pot

You remember the story about the frog that was put... Read More

whole house cleaning Park Ridge ..