Just about every type of investment vehicle you can think of is offered to the hapless investor. By the time he leaves he is more confused than before he attended.

Would you care to invest in domestic or international? Stocks, bonds or mutual funds? How about those chancy limited partnerships? Need a money manager for your portfolio? Maybe you are smart enough to buy one of those sophisticated software programs that will find winning (?) trades every time. Options are always an option. And many more.

The wylie mavens give free seminars to mesmerize the little guy with big Wall Street jargon. As a professional trader they are too complicated for me. Questions are usually allowed, but not once did I hear the one that separates the winners from the losers:

“How did your model portfolio perform from 2000 to 2003?” Almost without exception the best any domestic or international fund would answer: “We outperformed the S&P500”. They fail to add the S&P lost 40%. And 80% of all mutual funds do NOT outperform the S&P500 index in any year.

Mutual fund managers are not able to protect customers money. The charter of most funds requires they must be 90% invested at all times. When everything is going down the fund manager must continue to buy and is not allowed to sell, BUT YOU CAN.

During any 10-year period history records at least one or two bear markets of 20% to 40% or more. During those times brokers do not counsel their clients to sell and hold cash in a money market.

Think back to 2000. If you had sold 10% or 15% off the top how much more cash you would have had when the market turned up in 2003.

The market is screaming it is in that same 2000 mode and headed much lower. Will any investor want to take that ride again?

There is once secret to the market Wall Street does not want you to know. It is not how to buy right. It is how to SELL. Any investor without an exit strategy will never make money in the stock market.

Do you or your broker or your financial planner have an exit strategy? Check with them immediately before your portfolio disappears. Have it put in writing now. This is your only protection.

It is the intelligent investor who understands it is better to be in a money market paying 1% than in an equity position that is steadily losing 1, 2 or 3% every month.

Do not wait until losses pile up. CASH IS A POSITION.

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 2006 All rights reserved.

Copyright 2008 Albert W. Thomas All rights reserved. Author of "IF IT DOESN'T GO UP, DON'T BUY IT!"