Newport News, United States (IBwire.com - July 29, 2009) Consultant Lee Smith, an analyst of stock market statistics is providing an investment strategy that avoids steep declines for mutual funds in a IRA and 401k plan. This is a mutual fund strategy the protects the decline in value for retirement accounts. The process involves switching mutual funds when the stock market is at a one year low to avoid further decreases in account value.

The defensive strategy also shows the stock market trend when the overall market is moving up. This is depicted by knowing the 1 year average which is the average price of the past 12 months. The S&P 500 Index which is considered the benchmark for the overall stock market is presently at its 1 year average. This is the trend watcher to see where the market goes.

The year to date of the stock market is in a positive percentage since its March lows. This is contributed from the fact of investors buying when stocks have gone to 1 year lows. Once the buying of stocks start to ease, the market should continue to move sideways and down.

With the economy still working its way through the recession more lay offs are expected to be announced. Bank of America has just announced that it is closing almost 600 offices. The market will not hold its gains if there are other lay off announcements because it is the revenue of companies that drive the stock market up. The earnings of consumers is important to the retail industry because this how their revenue is measured.

Helga Dietz who has a IRA with American Funds states, "the losses I had in 2008 were 30%. I am considering switching to money market funds if my current portfolio does not hold up. Watching how the S&P 500 Index performs is important to me because it has the same companies as my mutual funds".

Transferring to money market funds should have been done in early 2008 when the market was at its first 1 year low. This would have save thousands of dollars in retirement money that may take years to recover. The only way to avoid a bear market for mutual funds is by having an investment strategy.
 
Information for retirement plans can be found at http://www.LeeSmith.info/Bearmarket.aspx

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