“Doing the same thing over and over again and expecting a different result is crazy.”

Who said that? I remember. Albert Einstein. A pretty smart dude, but what does he know about the stock market? He’s only a physicist.

With this volatile and disruptive market we need Albert to come back and help us understand how we can keep from losing money. In fact, Albert, we need someone to help us make money – for a change.

Wait a minute. About 99% of brokers advise their clients to hold on to their stocks and mutual funds. About the same number of mutual fund managers hold onto stocks in their portfolios even when they are going over Niagara Falls without a barrel.

The poor investor (pun intended) is afraid to open his statement.

And these are supposed to be professional money managers. The least to be expected from them is NOT to lose investor money.

During the past 10 years we have seen 2 major bear markets. Remember 2000 when the NASDAQ dropped 78%. No, you don’t want to remember that one. Well, how about 2008 when the S&P 500 Index dropped more than 40%. What did your mutual fund manager or financial planner do with your account?

Let me enlighten you. They were doing the same thing over and over again and expecting a different result. That is more than crazy. It is stupid.

Brokerage companies do NOT teach their brokers how to protect customer funds because they will lose money. It is OK if you lose money, but not them.

Brokers would have to learn about stop loss orders and market timing. Both of these are anathema to the Wall Street bottom line. Yes, they know about them, but if the investor is out of equities and in a money market account they don’t make any money.

So what do the multijillionaires who own the brokerage companies teach? Buy N Hold. And what do they teach in the universities? Buy N Hold. Does it work?

Buy and hold does work only in a bull market, but when the market turns down the investor should Sell N Sit. Investors first question is, “How do I know when to sell?”

There are many good market timing programs, but the slow ones are best for the long term investor. Something like a 200-day Moving Average will protect 80% of investor funds.

During the 10 year period 2000-2010 the S&P index funds lost more than 24%. None of the market timing methods lost money and one I follow made 300% with 7 trades and paid no commission. Will it do that again over the next 10 years? Who knows?

If your broker or financial planner insists on doing the same thing again for the next bear market he is either crazy or stupid.

Don’t you fall into either category? Find a new broker - or go broke.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know. Copyright 2010 Williamsburg Investment Co. All rights reserved.