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49

It's Time to Sell and Walk Away

Don't let it get away!

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There's no escaping this truth: The market has lost more than half of its value since it peaked in October 2007.

It could go even lower -- and it probably will.

Things are getting worse. If you have any home equity left, it's still shrinking. General Motors inches closer to Chapter 11 every day -- and General Electric (NYSE: GE  ) is confronting some mighty problems of its own.

Our entire banking system seems on the ragged edge of collapse, as nervous investors wonder who AIG's counterparties are and fret about the true financial condition of institutions such as Bank of America (NYSE: BAC  ) and Goldman Sachs (NYSE: GS  ) . Layoffs continue at a torrid pace, as companies such as General Dynamics (NYSE: GD  ) and Tyco Electronics (NYSE: TEL  ) join the very long list of companies adjusting to new economic expectations.

It's going to get worse before it gets better -- if it gets better. Some folks are saying there's no way out -- a huge collapse might be in the cards. At best, they say, we're looking at a decade or more of high unemployment and stock market misery.

This is the time when you look at your decimated portfolio and wonder how much more you can take. This is the time when many pundits remind you that the "buy and hold myth" has been "debunked," and that the "smart money" is already in cash, waiting for the bottom. This is the time when the temptation to join them is overwhelming.

This is the time when you sell it all and walk away, 

There's just one catch
But if you act while you still have something left to get rid of, answer this: What do you do after that?

I mean, great, you sold. Congratulations. Now what?

You can leave what's left in a money market fund that earns a whopping 1%. You can buy gold, though that seems more and more to me like buying tech stocks in 1999. You could buy bonds issued by a blue-chip company such as Johnson & Johnson (NYSE: JNJ  ) or Procter & Gamble (NYSE: PG  ) -- yet that still leaves you exposed to an economic cataclysm.

You could … geez, I don't know what else. There isn't much available that looks like a great long-term investment strategy once you're out of the market. Picassos? Vintage Ferraris? Rental condos in Scottsdale? The Ferrari would be fun, but it's not really a retirement plan.

Of course, when people talk about selling, they're not thinking about an alternative long-term strategy. They're thinking they'll wait for the bottom and then buy back in.

Is that what you're thinking?

You sure that's a good idea?
Waiting for the bottom and jumping back in would be market timing. That's the practice of using something -- technical analysis, macroeconomic factors, seasonal indicators, astrology -- to buy when markets are about to rise and sell when they're about to fall.

Market timing, the academics say, doesn't work. But there were academic theories that said our current mess couldn't happen. Are they wrong about this, too?

As Foolish retirement guru Robert Brokamp notes in the new issue of the Fool's Rule Your Retirement newsletter, available online at 4 p.m. Eastern time today, some timing indicators seem to work more often than not. For example, when dividend yields go up and price-to-earnings ratios go down, prospects for stocks in general have usually been good. No-brainer, eh? But some notions are more nuanced -- for instance, statistically speaking, the stock market does best between November and April.

Ouch.
Given how the market's done since last November, let's hope that last one doesn't hold this year. But that makes for a good point -- tendencies and trends and "more often than not" isn't reliable enough to bet your retirement fund on. Consider: Will the next sharp upward spike in the markets be yet another bear-market rally -- or the birth of a new bull? One thing history tells us about bull markets: They start sooner than most folks think they will. We'll only know for sure in retrospect.

Likewise, we'll all know what the bottom was -- a year or two later. But how will you know it when it's here? Can you say for sure that we haven't already seen it? The bottom happens, we all know, at "the point of maximum pessimism." I don’t see very many optimists around today.

Wall Street chest-thumping aside, there's only one good answer to that: I don't know.

So what should you do?
The short answer is to "invest well and hang on." Successfully timing the markets involves an extraordinary combination of luck, skill, knowledge, and more luck -- and even the best market timers regularly miss the mark.

A better answer? Well, we can't predict the future -- but as Robert notes in his article, there are reasons to believe that the remainder of this bear market will unfold along certain lines. And there are strategies you can use to mitigate downside risk in the meantime -- strategies that don't involve selling everything and sitting in cash.

These aren't esoteric strategies, either -- they're approaches you can use in any portfolio, even a 401(k). If you'd like to see what Robert has to say, and ponder some worthwhile ways to shepherd your portfolio through the remainder of this global financial train wreck, you can do so free of charge -- with a complimentary 30-day trial of Rule Your Retirement. Signup takes just seconds, and there's absolutely no obligation to subscribe. Click here to get started.

Fool contributor John Rosevear has no position in the companies mentioned. Johnson & Johnson is a Motley Fool Income Investor selection. Tyco Electronics is a Motley Fool Inside Value pick. The Fool owns shares of Procter & Gamble. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.


Read/Post Comments (40) | Recommend This Article (49)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 05, 2009, at 3:56 PM, kryotex wrote:

    I agree with the Title of this Article; the truth at last. It is time to sell and walk away. Save your money, don't gamble it away in a volatile market, where Obama continues to change the rules for business and wall street every week. Forget P/E ratios, or value stocks - that means nothing when there's no confidence in the market. Sell before the indexes are down another 50%. Before the Fools convince you to Buy and Hold again, as they have since the market's crashed all the way down from 15000 to 65xx, take the titles advice. Walk away. Wait until there's some stability in the world economy, and the rules are known. SAVE YOUR MONEY!

  • Report this Comment On March 05, 2009, at 4:42 PM, TMcNasty wrote:

    I tend to agree kryotex. I hate it when pundits tell you to hang on...it'll be over soon. The fact of the matter is if the market is REALLY going down you REALLY should sell. The counter argument presented here assumes there will be some instantaneous turnaround in the market that you're going to miss out on when you go to sleep. That IS NOT GOING TO HAPPEN.

    The markets will turn around. There will be another bull market.

    But when?

    Right now all we see are arrows pointing down. THOSE ARROWS ARE REAL!

    Preserve your capital at all costs!

    IF you have any money left in your 401K keep it there, but in a safe guaranteed instrument and KEEP CONTRIBUTING to it.

    When the market finally becomes stable move it back to the high growth stuff for the long haul bull-market that will finally come.

    There is no reason to hang onto a dying investment...especially when you can sell and rebuy later w/o paying takes like in a mutual fund.

    You want another safe investment?

    Overpay your mortgage! I'm earning 5.75% doing just that. I'll take that over adding more $ to my Scottrade account anyday! For now...

  • Report this Comment On March 05, 2009, at 4:44 PM, TMcNasty wrote:

    "especially when you can sell and rebuy later w/o paying takes like in a mutual fund."

    oops! I meant 401k there at the end.

  • Report this Comment On March 05, 2009, at 5:33 PM, BMFPitt wrote:

    I moved my whole retirement fund into government bonds around DOW 11000, when people told me I was nuts for selling when the market had already hit rock bottom. I'm considering getting back in somewhere between 6000 and 4000, probably in 20% chunks.

  • Report this Comment On March 05, 2009, at 5:42 PM, TMcNasty wrote:

    I actually did the same BMF even though I forgot to type it above you. Mid-summer I just put it all in a guaranteed 5.5% fund TIAA-CREF has. I didn't save all my capital, but I did save most of it. When the time is right I'll move it back. Since my move that long-term fund I'd been in has lost 60% more.

  • Report this Comment On March 05, 2009, at 5:45 PM, kryotex wrote:

    I Might consider some stocks, after confidence has returned to the economy, corporations abilities to tell the whole truth, more transperancy.

    my cash deposit portfolio, which is now 100% of my portfolio in multiple banks, shows a 220% capital increase since 1996. Those are long-term investments, safe and preserve my capital as long as the government is alive. The stock market is all red numbers. I dumped all my stocks last year, and bought insured deposits. My banker thought I was nuts and thought the interest rates (5% at the time on a 5yr insured deposit) was low, and I should stay in the market.

    Glad I didn't listen to her - or the Fools around here!

  • Report this Comment On March 05, 2009, at 5:51 PM, TMcNasty wrote:

    And FWIW I am actually putting $ into my Scottrade account (10% after-tax salary) as well as paying down my mortgage principal ($500/mo). I'm just not buying stocks w/ the $. So I'm dollar cost averaging into the eventual bull-market without dollar LOSS averaging. Maybe buy some KO or MO...or some other dividend paying consumer staple, but even THAT isn't too appealing due to dividend cut surprises. Thanks GE, etc.

  • Report this Comment On March 05, 2009, at 6:08 PM, thedofca100 wrote:

    It's so heartening to see that some people are finally seeing the scam for what it is. They tell you to stay in safe stocks as if they know what they are. BofA, Citigroup, GE, GM, GD, these were all the safest of stocks. What if you get into something that turns out that way? Those of you who plan to play the game in the future, good luck and I hope your pension isn't in some way taken from you. If your company or the govt. can think of a way to steal it, they will, no matter who is in office.

  • Report this Comment On March 05, 2009, at 6:12 PM, CIGA wrote:

    --"You can buy gold, though that seems more and more to me like buying tech stocks in 1999."

    Any facts or data to support this statement? I am interested in your reasoning behind this statement.

    Gold hasn't tanked like the other "commodities" because it has a dual role -- both a commodity and a currency. And because central banks around the world are printing money out of thin air it's current strength is as a currency with no counter party risk.

    For those that planted the vast majority or their wealth in gold it has done exactly what it's supposed to do in times of crisis -- protect wealth. It's not an investment or a speculation, it's insurance against the idiots and thieves in charge of the government and the greedy sociopaths at the head of the banking system. It's a time tested currency that has survived for thousands of years.

    Don't listen to me since I'm just an anonymous voice on the internet -- research it yourself and you'll realize the truth. Gold is the only thing that is worth holding.

    So here's the best free advice you'll ever get -- buy gold -- physical gold -- not ETFs -- and don't tell anyone about it and you'll be smiling by the time the next decade rolls around. Again -- don't listen to me -- research yourself.

    Gold is the place to be -- not forever -- but definitely in times like these. Silver is good too.

    You'll see.

  • Report this Comment On March 05, 2009, at 6:28 PM, srkiff wrote:

    I have an annuity with Axa Equitable whom my adviser with Smith Barney set up for me a year ago. I have lost "on paper" he says about 40% and he says to stay. Does anyone have any advice?

  • Report this Comment On March 05, 2009, at 6:33 PM, jbromet wrote:

    I started noticing things spiral downward earlier in 2008. I asked several times int he year for advice from the people who were managing the IRA where I had my life's savings. They told me to hang on, not to sell low. Well, low became lower, and now lowest. They weren't looking or listening to what the market was doing or they were protecting their own interests. If I had followed my gut instinct to bail back then, I could have saved myself about 1/3 of my money. The alternative is, of course, to sell and keep your money as cash reserves. You won't make a profit, but you won't lose. Maybe that's OK for now.

  • Report this Comment On March 05, 2009, at 6:49 PM, CIGA wrote:

    Advice for srkiff -- BUY GOLD!

    And unlike your adviser who charges you for losing your money -- this advice is free.

    You probably still should research gold for yourself, but since you asked an internet comment board for advice for advice. This is my advice.

    Let me know how this advice looks in 2012.

  • Report this Comment On March 05, 2009, at 7:08 PM, javnnf wrote:

    MF:

    You contradict your own postings and confuse the audience who is so gullible to begin with.

  • Report this Comment On March 05, 2009, at 7:08 PM, TMFMarlowe wrote:

    CIGA, let us just say that with respect to gold, I am increasingly inclined to be fearful, because so many others are greedy (and vice-versa with respect to very good stocks). Just read the threads around the Fool -- heck, read this thread. Is it an exaggeration to invoke 1999? I'm not sure it is.

    John Rosevear

  • Report this Comment On March 05, 2009, at 7:47 PM, Mthirsty1 wrote:

    Bravo,the comments i have just read show that there are folks out there that can see what is really happening.While all of the anylists are still out there saying hold,hold hold,trying to use history to say in the past this is what has happened.Look around,where we are now has never happened in the past.We are the new history and it is on us right now.I have to laugh when these companies use benchmarks and comparisons such as if you buy these stocks you are only loseing 35% of your portfolio instead of 36% loss in the 500.Wow that makes me feel better.Thank goodness i did not listen to those people,if i had i would be bankrupt,but as of right now i still have 95% of my retirement.I am not making any money but i am not loseing any either.We have friends who have lost 75% of their portfolio listening to anylists.

  • Report this Comment On March 05, 2009, at 8:02 PM, brwn8484 wrote:

    You would be wise to start planning for social unrest. I am guessing that the next major catastrophe will be a disruption of the oil supply system... This will create an unprecedented castastrophe, especially in the major metro areas as noone will have the ability to get food fuel or water. I expect that we will see social unrest like never before in this country.

    The Bozo's running our country today announced they were going to add additional taxes to natura gas. We are already subsidizing every foregn oil producer and when the patient is down, we will kick him in the head by adding additional tax.

    We will be taxing the one clean domestic fuel that will help solve our energy dependance. I wanrned my friends about Obama. Wellllll gues what... Its worse than your worst nightmare. On top of the greatest financial collapse in history, our own leaders are beginning to kick the sh*( out of our own energy infrastructure. Boone pickens says that Natural gas is 80% cleaner than diesel. We should be cutting taxes on Nat gas, not raising it.

    In addition, what th*()*(* is Geithner thinking about. He wants to tax industry at the time it needs tax cuts more than at any time the history of the US.

    I have warned you all. If this group of BOZOS is not stopped and soon, the entire world will collapse under the sheer weight of greed and stupidity (not sure whhich is greater, but I am favoring stupidity).

    I told you it was going to be bad. You have been warned. If you dont plan for coming crisis, its your own fault!

  • Report this Comment On March 05, 2009, at 8:24 PM, DogLvr2 wrote:

    I've heard from reliable resources that once a market reaches it's bottom, the market will go upwards for awhile, then it will retest that bottom once or twice before the true bull market takes flight.

    Since nobody knows how low the bottom will get, and nobody knows when it will happen, instead of market timing, wouldn't the best strategy be to let the market get as low as it wants, then wait out the rally for the retested low....then invest?

    Would appreciate your opinions on this.

    Thanks

  • Report this Comment On March 05, 2009, at 8:24 PM, kryotex wrote:

    Make sure you've watched the basic Crash Course covering economics throughout history, including today's federal reserve and Obamamic's at http://www.chrismartenson.com or read some current books, such as When Giants Fall by Micheal Panzer.

    The markets may or may not rally; the point is the momentum is DOWN... not sideways, not up - but down. Today is not a time to invest into stocks, unless you're gambling. When I see confidence return to the markets, and the government providing tax incentives for small businesses to succeed in the future, instead of socialism ideals, then I'll consider purchasing some equities. But right now, corporations are in fear; charities are in fear; taxpayers are in fear. People are turning to gold, cash, and bartering to avoid taxes - an inevitable change in human behavior when governments increase taxes. Heck, if I was earning $260,000/yr (I wish), I'd ask to decrease my salary to $249,999 rather than donate that additional $10,000 to a charity. Sure, there are more factors to consider, but the bottom line is the bottom line.

    Move to Canada! 17% flat tax, no provincial taxes in some provinces like Alberta, and no huge trillion dollar defecits that your children will have to pay for. We already have medical care system in our budgets; our real-estate is slowly stabilizing again as investors are looking to cheaper properties to purchase.

    All I recommend is that you SAVE your capital - SAVE your retirement savings. SELL your stockes, equities, etf's, etc - they're gambling your future and your children's futures. Sell your losses now, before the indices drop another 50% (yes, its possible - its happened before, when the Fools told you to buy & hold each month). Hand down your wealth to your children in safe, insured government-backed deposits. Don't screw yourself. I wish I would have spoke this loud a year ago - nearly all my friends have lost over 65% of their 401k's and retirement savings, along with over 30% of their home's value. They thought I was nuts, but being conservative, I prefer to preserve my wealth, and NOT RISK IT! I've worked my life for it - why risk it to corrupt wall street corporations, stock markets, obamanamics, or 94% income tax rates in the future (based on those in the 1930's-1940's).

    \SAVE, SAVE, SAVE - and keep investing into your savings every month - just not devaluing stocks! wait until the market's stabilized!

  • Report this Comment On March 05, 2009, at 8:32 PM, SteveTheInvestor wrote:

    I only wish my 401K had a government bond option. If it did, I would be in it. The best they have is a Stable Value fund which holds 70% of funds. I moved almost all that money into Stable Value back when the authors here were advocating staying the course. Well, they are still advocating it apparently. Had I listened, my lousy portfolio performance would have gone from lousy to downright horrific.

    You can tell me about the perils of market timing. All I know is that my attempt at timing has allowed me to dodge an additional 30-40% loss.

    I honestly wish I could figure out a way to get my money out of my 401K without incurring huge penalties and taxes. I would do it in a heartbeat. I honestly don't think that a total economic collapse is all that far-fetched. I'm no longer contributing to it, to say the least. I have no faith that the account will be there when I need it.

  • Report this Comment On March 05, 2009, at 8:40 PM, kryotex wrote:

    although i can't help with the 401k part (I'm canadian), we can choose our investment vehicle - whether equities/stocks/commodities or bank cash deposits, GICs or other forms of insured investments. I'd take a lower 5% government-backed yield over a "potential" high risk 8%+ yield with risk associated with it ANY DAY!

  • Report this Comment On March 05, 2009, at 9:04 PM, CIGA wrote:

    At some point the 1999 situation with internet stocks may apply to gold (and possibly to gold stocks, but for now they are risky), but for the time being gold is not in a bubble. It's in a secular bull market which has it making higher highs and violent, but higher lows and the price slowly keeps rising over the long term. I would actually be worried if the gold price was parabolic -- but for now it's not.

    Compared to all the paper money washing the world, the actual amount of gold in existence is quite low and once even a small percentage of that money gets to gold look out.

    Again, even if you don't do your homework and just blindly follow the advice of this anonymous internet poster -- you will do well holding actual physical gold bullion. But you should still do some homework. It can be a pain getting the physical metal compared to just electronically trading stocks, but this is a crisis situation requiring emergency measures to protect yourself and those you care about.

    The stupidest thing I've heard about "the bottom" was from Ali Velshi the money guy on CNN. He said that the Dow at it's current level is now closer to the bottom than it was when it was 9,000.

    Gee thanks. These guys on TV are just cartoon characters like Yosemite Sam who probably could care less about the fact that some gullible people may really be suffering thanks to their advice.

    Protect yourselves -- because no one else will.

    Gold is the place to be until further notice. End of discussion.

  • Report this Comment On March 05, 2009, at 9:05 PM, Chazac wrote:

    What a relief to read your comments. I was one of those that listened to the experts and pundits and stayed in too long. I watched as I lost 40% in 2008. Then this past weekend, I checked in on my investments all - index funds - because they are the "safest"...and I was down another 10%. I decided to ignore the experts...there are no experts anymore. I put everything into money funds as I think that is the safest possible harbor....So I have about 50% of the money left that I saved for nearly 30 years!!! It's all very depressing but at least my money is relatively safe. I agree with the other poster, If market timing is bad, it feels good to be bad. It's good to see other people out there are doing it as well. I agree with paying down the mortgage, it's the only place you are going to get 5.75%. I agree with the sentiment save - save - save...

    I am glad I found this discussion board. Good Luck everyone!

  • Report this Comment On March 05, 2009, at 9:07 PM, Dart65GTConv wrote:

    In sizable position of MELA under 4 average they got the best new product on the way. Take a look wall street is lately. haven't lost a thing in months with this possition. Grabed up on ge 6.56 feels good. IRA see you in 20 yrs ge

  • Report this Comment On March 05, 2009, at 9:13 PM, Irishangel3d wrote:

    I have not sold. Let's face it if everyone pulls their money out, it compounds the problems facing some American Companies. This is not the first time credit was tight and difficult to get loans. We have experienced these types of crisis before. We just didn't have the talking heads who wish to have their 15 minutes of fame Capitalization is used when a company goes to borrow money. If the companies are sound and have good management, they will figure out a way to survive. It could be rough for a while and this is a way that companies that weren't managed properly in a boom economy are sifted out! This has happened before. and it will happen again. Besides @$3000. a year I wouldn't live long enough to use up the losses. I'm a baby boomer.just a few years before the big 65

    Read the companies financial statements, review the management running the company and realize what my Dad said from the time I was little. "You don't invest in the stock market unless you can afford to lose the money! "

    I had thought since I was very conservative that the investments I had made were good ones. Utilities, financial, food,drugs mutual funds etc.

    If you don't need the money and do not have stock in GM.Citibank etc.which are close to junk status, then it is far better to bide your time. Why let someone else benefit while you are experiencing huge losses? Don't let emotions cloud your judgment.That is the biggest problem we are experiencing.

    This is a nation that expects instant solutions. People today lack patience.They want it fixed immediately This situation cannot be fixed immediately.What is forgotten, is the basis of the Dow,is 30 stocks! Think long and hard before cashing in.

    There are people who will make fantastic gains from those who have lost their cool objective perspective.

    These companies were big in their time

    Jones & Laughlin, Woolworth's, Murphy's, Grants Montgomery Ward, Gimbel's Horne's, Ame's MCI,etc.

    No one ever believed they wouldn't last forever.Debt pulled them under.It's part of the cycle. Good Luck!

  • Report this Comment On March 05, 2009, at 9:32 PM, CIGA wrote:

    In regards to financial sites like this one. It reminds me of a tour I took of Seattle. Seattle was the last stop before the Yukon in the days of the gold rush. More money was made in Seattle selling equipment and supplies for people heading to find gold than people actually made finding gold. Same here. I suspect the Motley Fool and CNBC and all these guys have made more money dishing out "advice" than people actually made by taking their advice.

  • Report this Comment On March 05, 2009, at 10:30 PM, steveherb wrote:

    Sell. "I mean, great, you sold. Congratulations. Now what?" No more waking shocks to finding your investment gone due to repeating acts of fraud.

  • Report this Comment On March 05, 2009, at 11:21 PM, anuvaka wrote:

    I could not disagree more.

    The time to sell was Oct 07 to April 08. And where is the bottom? Darned if I know. But now to June is the time to start buying, if you have the cash. Of you could sit out a bit more too.

    As far as gold goes 08 was pretty good, but at $1000/oz this looks like a time to sell off slowly.

    I feel the article and comments are at the wrong time, no one is looking at Today.

  • Report this Comment On March 05, 2009, at 11:37 PM, CIGA wrote:

    Yes $1000/oz is a psychological barrier because gold always hovers around round numbers.

    Please tell me the facts why $1000/oz looks like a time to sell off slowly. I am willing to listen.

    Anyway. To each is own.

    Bottom line. Gold is the place to be. Remember this heading into 2012.

    Facts please.

  • Report this Comment On March 06, 2009, at 12:09 AM, sprogy wrote:

    If people would finally stop making "foolish" decisions it's time to sell and walk away, that surelly would help the market form a bottom. If I would try to predict a bottom based on an average comment posted here, I'm affraid we're not there yet.

  • Report this Comment On March 06, 2009, at 12:20 AM, rofgile wrote:

    You could follow TMFdeej and buy high yielding bonds with rates of 5-10%. You are a lot less likely to lose your capital this way than stocks at the moment.

    Terrible article.

  • Report this Comment On March 06, 2009, at 2:10 AM, kryotex wrote:

    Like Chazak, I sold all my equities, paid off my mortgage in full, and put the remainder in multiple, government-insured cash deposits averaging just over 5% annually (compounded - no trading fees, no management fees, nothing - a pure 5% annual growth rate, compounding). Terrible article, but excellent title! It definately is time to sell; SAVE SAVE SAVE! I could point you to hundreds of references, but you can do your own research. Otherwise, continue buying as the stocks continue falling - your choice. If you still have a mortgage, PAY IT OFF (and any other debt) before you even consider stocks. Stocks are an investment vehicle for people looking more than 20 (TWENTY) years down the road - and even that's a gamble. Based on my last 14 years, I've EARNED over 200% capital in treasuries and other save investments, whereas those that invested in the risky stock markets have lost most of their savings.

    Don't listen to the Fools or suscribe to their Foolish nonsense - they've already admitted they make their money through subscribtions, and not stocks, caps, etc.. So Subscribe if you want to provide them with wealth; otherwise, Sell what you have and Save your money.

  • Report this Comment On March 06, 2009, at 4:14 AM, mikecart1 wrote:

    No guts, no glory. Everyone is investing in gold, MMA, and cashing away all their losses but how are you ever going to make it back? When you have lost half or more of whatever retirement account and you give up, what is the point? You might as well go all the way.

    The odds that everything dropping to nothing and staying there are... well.. possible but who wants to hope for that?

    And what if everything turned around just as fast as everything tanked? You already cashed everything out or bought gold or switched to some safe MMA. You will be on the sidelines with even more regret than ever before.

    Markets like this only happen once in a generation. Think longterm before getting scared and losing all chances to make it all back and then some.

  • Report this Comment On March 06, 2009, at 5:27 AM, vdlspore wrote:

    At a recent conference I attended an "honest" banker was presenting on the financial crisis. When posed with the question "I'm 100% in cash now, what should I do" his immediate response was "buy a small farm and ensure you can grow enough food to keep your family going".

    Alarmist, but point being its best to hang on to what you've got while this uncertainty prevails.

    Gold will be subject to govt intervention, just like eveything else. It is not a safe haven. A farm is a better, and more useful, bet. In the mean time, find a black-box trading platform that runs free of human emotion and is diversified across all sectors - stocks, bonds, currencies, commodities etc. Its the only holding working in my portfolio right now.

  • Report this Comment On March 06, 2009, at 7:09 AM, Chazac wrote:

    mikecart1,

    I will be 68 in 15 years. I don't think I have the time to "gamble" do you? Don't you think I need to start being conservative? I wish I could pay off my mortgage. Everything I have invested in differnt funds would kill me tax-wise.

  • Report this Comment On March 06, 2009, at 9:04 AM, MORK000 wrote:

    Since I became a Fool I learned not to be foolish! So I sold all my stocks an converded it into cash and put it into a safety deposit box. Crazy! crazy! crazy!and foolish!

  • Report this Comment On March 06, 2009, at 9:09 AM, VintageCat wrote:

    Like poker, holding what you've been dealt and riding it out as an investment strategy completely depends upon what is in your hand, how long you have left to play and how much cash you have on the table.

    Unfortunately there is no one size fits all advice. We are just grateful that we bugged our 401Ks out of the market into government bond funds late in 2006 in anticipation of retirement. Now we just need to liquidate some real estate while our housing market has a leg left to stand on, if possible.

    Interesting comment from the banker. I've been having similar thoughts. Living on a family farm is how both of my parent's families rode out the 30's depression in some semblance of comfort. Fortunately my husband and I retain basic life skills. Many do not know the first thing about growing food, sewing clothes, repairing rather than replacing things. Skills needed in a dead economy.

    Some of the dooming and glooming reminds me of the Y2K hoopla, but unfortunately the basis is much more established in solid fact with this crisis. I agree fully with one comment, it behooves us all to listen to our intuition and to take care of ourselves because our brokers, bankers, tax collectors and other "experts" have their hands out looking for their cut and the anonymous internet pundit will be long gone or silent when/if tragedy befalls.

    Anybody got a great big mattress? Looks about as good as the market right now.

  • Report this Comment On March 06, 2009, at 9:23 AM, BTShine wrote:

    All of the pessimism and "doomsday" talk on this board seem like a bullish indicator to me.

    It's when everyone is content and confident that stock values will rise that we seem to hit a wall.

    This is the opposite of what I saw during the green tech bubble at the end 2007; the internet bubble of late 1990s; real estate investors of the early to mid 2000s.

    There's gotta be someone else on this board that can take a step back and realize that in the market we are competing with each other. So, as Buffett says "be fearful when others are greedy, and greedy when others are fearful"

    BTShine

  • Report this Comment On March 06, 2009, at 10:46 AM, cwt3822 wrote:

    Nice Buffett quote. Is it any suprise that we who didn't get fearful when we saw greed are fearful now? Makes me want to quote the other famous Buffett "If we weren't all crazy we'd go insane" The posts sound like a bunch of folks who did the opposite, tried so hard to be sane they've ended up going crazy.

  • Report this Comment On March 06, 2009, at 1:00 PM, ReillyDiefenbach wrote:

    Timing the market. What a terrible thing to do!!!

    I sold all my stocks in November 2007 and I've got 90% of the money I had in June of that year plus a little bit of money market interest plus what I've been putting in since then. But I confess, I timed the market!!! What am I going to do with all this cash?? I have to invest it somewhere, don't I? Otherwise it's just sitting around waiting for me to buy stuff. Anybody got a sure thing for me, a couple of hot tips? No?

  • Report this Comment On March 06, 2009, at 2:21 PM, TMFMarlowe wrote:

    "All of the pessimism and "doomsday" talk on this board seem like a bullish indicator to me."

    Me too, BTShine. It's a necessary and inevitable part of the process. All bears eventually die in a vast sea of doomsaying, just as bulls die in a sea of exuberance. If only we could figure out how to tell in real time when the pessimism was peaking... we could wait until that moment to load the boat and get the biggest bang for our bucks -- not to mention look like geniuses.

    But of course we can't, and that was my point.

    The reaction to this article has been very interesting. Thanks to all of you for stopping by.

    John Rosevear

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John Rosevear
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John Rosevear is the senior auto specialist for Fool.com. John has been writing for the Fool since 2007. A lifelong car nerd, his current daily driver is a Cadillac CTS-V.

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