Don't Take Losses'  Instablog

Try these:

SPY:  the S&P 500 stocks Index;

QQQQ: the 100 largest non-financial Nasdaq listed stocks, mostly tech, some biotech, with 30% concentrated in AAPL, QCOM, MSFT and GOOG);

-  Or XLK: 95% tech with AAPL, IBM, MSFT, T, INTC, GOOG, ORCL & HP comprising 60%

IWM: the Russell 2000 small cap stocks basket;

IYM: matches the Dow Jones Basic Materials Index, 69 companies, largest holdings are DOW, FCX, DD, NEM, PX, APD;

XLI: industrials, heavily weighted in GE, UTX, UPS, MMM, BA, CAT;

XLF: financials, mostly big, like WFC, BAC, JPM, BRK/B, GS, C;

SDY: high dividend stocks with an average yield over 3%, like PBI, CTL, LEG, CINF, VVC, LLY, ED (59 in all utilities, drug companies, chemicals financials - very diversified, but all with big dividends);

PFF: 85 preferred stocks with really big yields, averaging 7.3%, like those of WFC, F, BCS, NCC, JPM,  DUA, MET (a lot of financials, but not all).

CASH: 10% most of the time.

The XLE and XME are two others to consider: energy and metals, the latter partly covered by IWM.

If you have only these 8 or 10 holdings in your account, its:

1) Easier to track;

2) Easier to use stop loss orders if we go into plunge mode, like we did to SPX 666 (many are calling for SPX 950 soon...I'm not, but very wary);

3) Don't have to worry about individual companies blowing up;

4) You get some peace of mind, some dividends, some growth, are diversified across large and small stocks and are postured for a recovery. Of course, if you think the world will double dip into the abyss due to word wide debt, then the dividend, preferred stocks and CASH could be your larger holdings. You might also consider the XLU utilities ETF with a 4.1% yield or the TLT 20 year treasuries fund with a 4% yield.

I doubt the double dip, but never say never.