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Special Report
Protect Your Stocks
From A Correction

In This Issue:

A Stock Market Downturn Is Overdue
Stop-Loss Orders Can Save A Portfolio
Safeguard Your Blue Chips With LEAPS
Some Funds Go Up During Downturns
We Don't Recommend Short Sales
An All-Weather Fund For Cautious Investors
The Bottom Line This Week

Since the bull market started last March 9, the stock market has been on a tear. For the 13 month period, the Dow rose 68.7% and the Nasdaq shot ahead 94.8%. After the unpleasant losses investors endured from late 2007 to early 2009, the rebound was especially sweet.

Although we think the bull market has further to go, we also think the near-term downside risks are becoming significant. Consequently, we are devoting this issue of the AIA Advocate to strategies that you can use to protect your portfolio while remaining invested for whatever additional profits are on the way.

The Biggest Danger Now Is A Series Of Bear Traps
The Financial Crisis Has Further To Run
Some Bear Market Investments Have Promise
How Long The Bear Might Stick Around
A Contrary Economic Outlook
Another Shameless Plug For Blue Chip Stocks
The Bottom Line This Week

Stock volatility has become so extreme, we had to redraw the charts. Although there have been up and down days as large as those we have seen recently, never before have they come in such quick succession.

Last week, as everyone from New Guinea to New York must know by now, the Dow and the Nasdaq fell 18.2% and 15.3% respectively. That would have been tough enough by itself, but what made the week even more hectic is it contained a 679 point jump that many investors believed was the start of a reversal. 

The market leaped forward again this Monday with a breath taking 936 point surge when U.S and European leaders decided on a coordinated financial rescue plan. Stocks took a breather on Tuesday. Then it plunged 733 points the next day on poor consumer spending data. We must expect more whiplash days as the credit crisis continues to unfold. 

In This Issue:

Many Americans Are In A Funk
If Everything Is So Bad, Where's The Recession?
The Fed's Rescues Come With A Price
A Lending Conflict Is In The Making
And A Weaker Dollar May Be On The Way
DNA Checks Are Not Just For Crooks
The Bottom Line This Week

The bear picked himself up off the mat last week after having been knocked flat by the bull a few days earlier.

As it turned out, the nasty fellow should have taken the full count to get back more of his strength. The best he could do with his rebound was push the Dow back a miniscule 1.1%. Nasdaq actually rose 1.2%.

When the market reopened this week, we got a dramatic demonstration about how important oil prices have become on Wall Street. On Monday oil ticked up fractionally, and the Dow dropped 240 points. Then on Tuesday, oil dropped back down and the Dow shot up 267 points. The uptrend continued the next day with a 186 point gain.