Tom Lydon's  Instablog

Doug Kass of The Street.com suggests the following ways to avoid large losses when a tactical view is wrong. We also threw in a few of our own:

• Always stay on top of fundamentals and stay on top of industry specialists. Why is your position doing well, and will it continue to do well?
• Use out of the money puts/calls as protection if you feel that it’s necessary. This isn’t for everyone, though.
• Don’t press losing positions – employ your exit strategy and find another spot that’s trending up instead.
• Accelerate every portfolio holding by rechecking the fundamentals at  a 5% to 7% loss and have a reasonable stop loss; a stop loss that’s too high could leave you suffering large losses, while one that’s too small could have you buying and selling more frequently. Our stop loss is 8%.
• Maintain a diversified portfolio – doing this with ETFs is easy.
• Watch the trend lines – use them as your guide as to when to get in and when to get out.
• Do your homework and know what is under the hood of the ETFs in which you’re investing. Don’t simply rely on the names of funds or other assumptions – do your due diligence.
• Use limit orders instead of market orders. Here’s why.
• Be open to new opportunities – trends are always shifting and with all the different asset classes that are now available (global regions, commodities, currencies), new trends are always developing.
• Have forgiveness – you’re only human. But with practice, you can become a pro at sticking to your strategy and making it work for you.

For more stories on trend following, visit our trend following category.

Kevin Grewal contributed to this article.

As the market melted down in 2008, many investors were so horrified at the state of their 401(k) statements that a number of them just stopped looking altogether. Now is the time to figure out how to fix a broken retirement system and explore the role exchange traded funds (ETFs) can have in it.

The importance of the 401(k) has only grown in recent years. A growing number of people entering into retirement (especially now that the Baby Boomer generation has begun to enter the ranks of retirees) and a broken social security system means that now more than ever, we’re responsible for the money we take with us into our golden years.