In my previous article I mentioned that I believe the secular bear market is not over. However, that doesn't mean we are going straight down until great values (6% dividend yield on S&P 500 and 10 year cyclically adjusted PE below 9) are discovered. A secular bear market can last over 20 years, but that doesn't mean you cannot make tremendous profits after a long period of poor performance. There have been 5 years in the past 80 years where the return on large cap stocks over the previous 5 years had just turned negative. The 2004-2008 timeframe happens to be one of them. The S&P 500 has a total return of -12% over these 5 years. This could mean that 2009-2010 could deliver big returns. For the previous 4 periods, I will display and show the subsequent return over the next two years.

1. 1927-1931. From 1/1/1932 to 12/31/1933 the large cap index returned 41% total. Small value stocks trumped those numbers with a 108% return over the two year time frame. This even after dropping over 43% by June 8,1932 and both indexes actually ended 1932 down.

By Matthew Hougan

What's the best U.S. total market ETF?

If you're looking at January performance, the answer is clear: the ELEMENTS Benjamin Graham Total Market ETN (BVT).

By Murray Coleman

With 136 exchange-traded funds still on the market with less than $10 million in assets, the closing of five unpopular bond exchange-traded funds by Ameristock this week isn't likely to be the last, say industry observers.

By Jim Wiandt

I come to that last conclusion by seeing treasuries continue to strengthen against the S&P as well as gold and silver. Worst hit by credit fears, as could be predicted, are small caps, who are obviously most likely to be hit by more stringent credit standards.

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iShares Broad/Total Market Growth & Value ETFs
iShares Russell 3000 Growth Index Fund (IWZ)
iShares Russell 3000 Value Index Fund (IWW)

His argument makes sense. The table below highlights the P/E ratio of the growth and value indices for the S&P 500 (large cap), S&P 400 (mid cap), and the S&P 600 (small cap). As you can see, in the mid cap and small cap indices, the aggregate P/E ratio for growth stocks is actually lower than value stocks. In other words, growth stocks are a better value than value stocks (yes, you read that right!).

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Some of the investment tools used by these professionals are now available to the public. There are several companies that have developed families of mutual funds and ETFs that bundle all these exotic vehicles into easy to understand funds that track common indexes. I will focus on two companies, Rydex and ProShares, as I describe a strategy that will allow you to invest and profit like the professionals.