Jack wanted to know how I could help. Looking at his mutual fund choices I realized that they were actually pretty decent, and he had a variety of some 13 funds. So, what was problem and how could we solve it? In a way, answer was simple. But people were having to get pretty beat up before they would see it.

My first step was, with Jack's permission, to log on to his 401k web site. Then I started making some adjustments. Since my trend tracking model was still in a Sell mode, I liquidated all of his positions and moved proceeds into money market. This accomplished one thing right away: He stopped losing money. When you stop moving backward, in relation to everyone else you are moving forward!

Second, as my trend index moved into a Buy mode on April 29, 2003, I researched his funds again. Based on strong momentum figures, I invested in two of his mutual fund choices. The result was very gratifying: funds I chose moved up around 10% in two months after my Buy. (Other funds I had tracked and selected for other types of investment programs moved up as much as 26% in that period.)

Jack’s been happy ever since. While 10% appreciation is not as great as I was able to do with assets outside his 401k, it still confirms that key to successful investing is methodology and discipline. Our disciplined approach relies on objective information. It disregards Wall Street hype designed to perpetuate commission-rich buy now while it's low, or buy and hold strategies.

If you have been in a situation similar to Jack's, or you want to avoid being in one, find an investment advisor who bases his decisions on a measured and objective approach. That will give you edge no matter whether market is going up or down and will give you greatest protection from sad stories with your 401k.