[l2ridehd]

I talked to one of the owners one time and they seem very through. I have an issue with all money management companies in this market. They all believe that you should stay 100% invested and ride the market up and down. That over time if you maintain a balanced portfolio you will come out ahead. They believe this because they either take a % of your invested money or get paid a commission on what they sell. This strategy has made a lot of people poor in the last 3 years and a lot of money managers rich. I have used a few of them over the years and have also maintained a portion of my investments to manage myself. I also manage my own 401K.

In every year I have done better then the professional managers. In my 401K only by a small amount due mainly to a limited selection of investments, but in my personal account by a lot. To the point that I have removed almost everything from their management. First when the market dropped from a 14,000 DOW to a 7,000 DOW they both rode it all the way down. In my 401K I got out at 12,000 and stayed out until it was 8,500 on the way back up. In my personal account I only buy 3 to 5 stocks of very solid companies. I set target prices to buy and a target price to sell. I also use stop loss orders to minimize the downside risk. In the 2008 free fall, all stop loss orders triggered. However at the bottom I was able to buy 5 stocks on my watch list at very attractive prices. Discounts of 75% to their list price. 4 of the 5 reached their target sell price last year and the 5th I still own and it is still a great value. I even bought more of it in the last two weeks when the market dropped down a few percent. The downside to my strategy is lack of diversity. The upside is an average of 29% annual returns since I have been doing it myself.

I will continue to maintain a small amount with the professional managers and also continue to build a portion of my personal investments into very low risk holdings. The rest will be managed by investing in a very few stocks of very good companies.