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What’s Your Time-to-Bail Number?

Thursday’s markets were lousy, and, down early and forecasting more losses, Friday isn’t looking much better. If anything, Thursday’s 420-point drop in the Dow Jones Industrial Average showed that the European debt crisis may be a far more significant market-moving story than the S&P downgrade of the United States’ credit rating. With signs the turmoil in the markets could continue for a while, the debate is being reignited: When is the right time to move money to the sidelines? When the Dow dips below 10,000? When the Standard and Poor’s 500-stock index hits 1,100?

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Many advisers say they’re getting fairly close to their trigger point. In particular, the S&P 1,100 mark – the average closed Thursday at 1,140 — is a popular one. SunGard Global Trading Product Manager Russ Chrusciel points out that would put the S&P at about 20 percent off its 52-week high of 1,370 in early May.

“This is a fairly significant downward move in a three-month period of time, and would certainly make me re-examine how ‘long’ I want to be in this overall market,” he says.

Others, particularly advisers who have already moved their clients to cash, say the time to bail was yesterday. If anything, they see buying opportunities in the current downward spiral. “As opposed to having a bail-out number, we are more inclined to have ‘dip in’ moments,” says David Katz, senior portfolio strategist at New York-based Weiser Capital Management.

Or should one maintain a buy-and-hold mentality in the belief that that what goes down must go up – hopefully sooner than later? “I bail out at zero,” says Frank Armstrong of Miami-based Investor Solutions. “I’m not delusional enough to believe I can predict either market tops or bottoms. Market timing has never worked very well before, while staying the course has always worked.”

Still, if there’s one point that advisers can agree upon, it’s that today’s roller-coasters markets require  some strategy. And “hope is not a strategy,” says Mark Lamkin, who heads his own wealth management firm in Louisville, Kentucky. “Advisers better have a plan and better have a process.”

Readers, what’s your bailing-out threshold?

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    • A lot of people are losing a lot of money in the market lately. We all know that.

      It goes up a little, then drops a lot.

      It’s pretty obvious that the big-shot bankers on Wall Street have been getting richer and richer during this economic crisis, while your friends and family members haven’t.

      Well if you’re interested in cracking open the “black-box investing strategies” of the rich, so you can see how they’re doing it, you’ve gotta check out this video Mike Dillard just posted…

      Despite the fact that he’s not an investor, trader, or financial guru of any kind, he’s made a 280% return since 2008, while the rest of the world has lost 30-40% of their portfolio.

      How?

      Get this… He found a “map” back in 2007 that’s allowed him to basically predict the future.
      Like I said… VERY COOL…

      Check out this video he just posted and you’ll see how he’s doing it…

      http://theelevationgroup.net/presentation/register.php?a_aid=160667&a_bid=290b868b&chan=y

    • I paid $22.87 for an iPad2-64-GB and my girlfriend loves her Panasonic Lumix GF 1 Camera that we got for $38.76 there arriving tomorrow by UPS. I will never pay such expensive retail prices in stores again. Especially when I also sold a 40 inch LED TV to my boss for $645 which only cost me $62.81 to buy. Here is the
      website we use to get it all from, Tag Cent.com

    • For once I guessed correctly, and put everything in a fixed interest account prior to August 6. If I never guess correctly again, I’ll take this once!

    • As usual the financial media runs stories about how market timing is bad then turn around and run a story about market timing. Of course the “Advisors” promote having a strategy, they make money off it.

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