—The Who, "Won't Get Fooled Again"

Tuesday's market meltdown sent stocks to new 52-week lows, as news of a slowing economy along with big losses in the financial sector related to the credit bubble continue to decimate hundreds of millions of dollars in shareholder value.

Frankly, it always amazes me how long it seems to take Wall Street to just come out with the truth. I am talking here about Citigroup's (C) admission on Tuesday that it would have to take an $18.1 billion writedown for bad mortgage assets. The company also announced it was slashing its dividend.

Now I know the folks who run Citigroup knew about their big loan losses months ago. They had to have known that sooner or later they were going to have to come clean, and that day was Tuesday.

The company's credit market woes are just part of the trillions of dollars of "I owe yous" in the marketplace. Billions on top of billions of dollars are owed from bank to bank, institution to institution, even country to country. No one is immune from this exploding credit bubble, and now the real question is what should be done about it.

My feeling here is that the Federal Reserve will step in and cut rates at least 50 basis points, possibly as soon as this week. If that happens we are going to see a humungous rally in stocks -- but let's not get fooled again.

This big rally is one you are going to need to sell into, meaning if you are overweight stocks here, or if your portfolio is designed for bull market conditions, this will be your opportunity to adjust and get more defensive.

Simply put, we always know when we will sell, and we always know how much money we are willing to lose in any equity position we enter.

As the market continues smacking down the bulls, preserving and protecting capital should be your primary goal. The only way to do that is to reduce your overall equity exposure. And if we get a big rally courtesy of an impromptu Fed rate cut, that should be your green light to sell and move into the safety and security of a high-cash position.

If you'd like to find out how my Successful Investing advisory service can help preserve and protect your hard-earned dollars during this inauspicious start to 2008, simply click here.

My First Live Event In 2008

I am proud to announce that my first live event in 2008 has now been confirmed. I am calling this event: "Managing Your Financial Assets in 2008." Of course, I could call this event something like "Financial Survival 2008," but my optimistic nature wouldn't permit that kind of breach into pessimism.

This event will be held on Tuesday, Jan. 22, 6:30-8:00 p.m., at the Westin Hotel in Pasadena, Calif.

This event is not simply about portfolio management or about what funds to purchase right now. Rather, it's all about properly managing all of your financial assets in what has started out to be a crazy year for the equity and housing markets.

In this seminar, I will teach you how to navigate the tumultuous economic environment in the face of a real estate bear market, a slowing economy and a falling U.S. dollar. We'll cover strategies and tactics on how to optimize your small businesses, your retirement accounts, annuity accounts, taxable portfolios, life insurance and much more.

My opinion is that we all need to be circling the wagons and protecting our assets from what could be potentially serious market damage.

The best part of this workshop is that it is absolutely FREE. The only downside is that this seminar will fill up VERY fast. If you want to attend, you must act now.

The Managing Your Financial Assets in 2008 seminar is sponsored by my asset management company, Fabian Wealth Strategies, and by Fairway Capital. Kevin Yurkus, president of Fairway Capital will make a special presentation on the most common mistakes millionaires make -- and how to avoid those mistakes.

Kevin is an expert on estate planning and asset protection. He'll be presenting strategies that will help you profit from what could be the beginning of the biggest bear market of our lifetime.

The Managing Your Financial Assets in 2008 seminar is designed for investors who have a million dollars or more of net worth and for those who:

Both Kevin and I will be on hand to answer your questions and spend the necessary time to make sure that you understand how to grow and protect your assets in 2008 and beyond.

Once again, this event will be held at the Pasadena Westin Hotel in Pasadena, California, on Tuesday, Jan. 22, 2008, from 6:30-8:00 p.m.

Reserve your seat now! Seating is limited and this event will sell out.

To sign up for this event, click here, or call us at 800.391.1118

A Little Light Peeks Through The Clouds

I suspect the home mortgage market is a huge area of concern for many Alert readers, so to help those of you racked with anxiety about what's ahead for mortgage rates in the midst of the current credit market turmoil, I've enlisted the help of my friend and mortgage expert Josh Lewis. When it comes to mortgages and all things real estate, Josh is one of the smartest guys I know.

Take it away Josh…

By Josh Lewis

The biggest financial news story of the last year has been the bursting of the housing bubble led by the implosion of the mortgage markets. Last year, 2007, was the first year on record that saw a year-over-year decrease in nationwide home values. This year is shaping up as a continuation of that trend as home buyers are in short supply, while sellers, both forced and voluntary, are piling up at a rapid rate. In the face of all of this negative news, what possible good news could we find about the situation?

There is one big positive that many people are not aware of. As the economy has sagged under the weight of the housing and mortgage market problems, interest rates have dropped significantly. In fact, current rates are at their lowest levels in nearly three years, since the Fed is aggressively cutting rates to minimize the damage and keep consumer demand for homes and other goods from completely falling off a cliff.

While the media has been all over the subprime story by reporting on rate resets, defaults and foreclosures, not much attention has been paid to prime mortgage resets. While the issue facing subprime and prime mortgages is the same, the options facing the "A Paper" market are much rosier, especially in light of the great rates currently available.

When we talk about interest rate resets, we are primarily talking about hybrid or fixed period adjustable rates. In the subprime markets, the fixed periods offered from 2002 through early 2007 were only two years. This was not a problem as home values skyrocketed through 2005. But the subprime borrowers who came late to the party in 2005 and 2006 were destined to fail. Rates rose, values dropped, lending guidelines tightened and by the time the two-year, and occasionally three-year fixed period ended, the homeowner had no ability to refinance into a loan they could afford.

Let's contrast that to prime borrowers. The shortest A Paper hybrid offers a fixed period of three years. The most popular was fixed for five years. Since these loans gained mass popularity starting in 2003, 2008 is destined to see the biggest wave of prime hybrid ARM resets. Looking at the chart below you can see we are almost past the wave of subprime resets but just beginning to hit the crest of the prime rate resets.

If you, or anyone you know, face a resetting rate in the next 24 months, you need to read my special report entitled, "Adjustable Rate Mortgage Resets and the Housing Bust." In this report, I cover the critical issues facing homeowners with adjustable rate mortgages, including:

To claim your free copy of this report, just click here. As an added bonus, the first 25 people to respond will receive a recording of my presentation at Wealth Strategies 2008 along with copies of my slide show. The content was extremely well received and has previously been available only to those in attendance.

Introducing The Annuity Coaching Conference Call 3

Are you confused and frustrated with your annuity assets?

Do you understand all your options when it comes to generating income?

Do you really understand how your annuity works?

During the past few months, I've had many one-on-one conversations with Alert readers about their annuities. I have come away from those discussions with some rather disturbing insights. First, most investors know very little about their annuity investments; and second, they know even less about how their annuity can help generate retirement income.

Given the large-scale confusion out there surrounding annuities, I have decided take my coaching sessions public. This month, I am proud to announce that I will be conducting two annuity coaching conference calls. These calls are open to annuity owners and/or those thinking about purchasing an annuity.

These two annuity coaching conference calls will take place on:

Wednesday, Jan. 23, 3 p.m. EST, and

Saturday, Jan. 26, 3 p.m. EST

In these FREE, annuity coaching conference calls I will help annuity owners better understand their annuity investments, and I will explain how annuities can be used to maximize retirement income.

These FREE annuity coaching conference calls will be limited to the first 50 participants per call. If you want to register for one of my FREE annuity coaching conference calls, just click on the link below. There is no cost or obligation associated with this call, and the information in the call is intended for educational purposes only.

To register, click here.

Is It Time For A Second Opinion? 2

Is your full-service broker failing to meet your financial goals?

It happens every time we have a major market decline. People figure out just how weak the advice is from their full-service brokers. I have been meeting with individual investors who have asked me to look over their portfolios and to give them a second opinion.

One couple came in to my office last week and told me a real horror story. They were both retired, and recently they turned their substantial 401(k) accounts over to a full-service broker. They gave the broker $1.4 million, and six months later they had lost 20% of their money -- that's a whopping $280,000 gone in just half a year! Unfortunately, the story gets worse.

The couple then told me they switched from the full-service broker to a major bank with a money management service. They gave the bank $1.2 million to invest for growth and income. The bank put 40% of their portfolio into a real estate investment trust right at the top of the market. Now, the couple is down another $300,000, and these nice people are justifiably frightened about ever investing again. To alleviate their fear, we prepared a complete action plan for them to get out of this mess, and I am proud to say they are now confident again about growing their money.

Want another example of full-service broker mishaps? I recently spoke to a physician in Phoenix, Ariz., who learned that he was not going to be able to practice medicine any longer. He had a medical condition that would keep him from doing surgeries. Fortunately this physician did a great job of saving money and had more than enough in retirement savings to support his family and himself.

He told his full-service broker to protect his nest egg and to make the appropriate changes to suit his new circumstance. Well, the broker failed to take any action and kept the doctor fully invested. That failure to act cost the doctor $300,000 in just 90 days.

The happy ending to this story is that we now are helping the doctor ride out the current market storm by advising him on the appropriate action to take with every position he owns.

I was able to help these investors by putting into place the following three-step plan for weathering the current market downturn.

Step One: Lower your risk. There is no magic formula, there is no silver bullet, and there are no safe stocks. The reality is you must lower your exposure to equities by selling when the waters get really choppy.

Step Two: Lower your fees. I just saw a portfolio with 13 mutual funds, all with expenses of over 2%. One even had expenses in excess of 3%. Always remember that Wall Street makes money whether you do or not. That is why I recommend the use of exchange-traded funds (ETFs).

Step Three: Expand your horizons. Now is the time to rethink your strategies. You need exposure to sectors that are going up, such as healthcare, commodities, energy and bonds. Simply put, you need to start thinking outside the traditional bull in this market environment.

If you need a second opinion about your investments, we're here to help. Just call us at 800.391.1118, or visit our Web site.

They only thing you have to gain is the life you desire.

Blogs Away: A Fabian Aural Fixation 4

Want to hear my latest rant on the state of the financial markets? Well, now listening, and even watching, is as easy as a mouse click.

To listen to the audio blog, simply click here.

Good Ideas And Good Pudding

—H.L. Mencken

There are opinions aplenty about how to deal with the current market volatility, and with nearly every investment pundit on TV spouting a different take on what to do, it might be helpful to keep the above quote from the great writer and social commentator H.L. Mencken in mind. You see, it's not the person making the claim that should be vetted. Rather, it should be the claim itself that receives the scrutiny. If something doesn't sound right to you, be skeptical -- even if what's been said comes from a source you respect.