You all know what CYA stands for. Of course, Cover Your Assets.

And everyone does it. You have protection against losing your car in an accident. You have protection against being sued from that car accident. You have locks on the doors to your home to protect against theft and personal injury. Question. Do you have a lock to protect from loss in your retirement portfolio?

Bet you didnt even know there is one. You sure arent going to hear about it from your stock broker or financial planner. If there is such a thing why hasnt he told me? Maybe it is because it is too expensive.

No, there is no charge for this type of protection and your brokerage company will do it. It is free. Then why dont brokers and financial planners provide this as part of their service? The simple answer is it is too much work. If you decide to use the service they will then have to watch your account.

Oh, did he say he was going to watch your account? Unless your account in seven figures or close to it you do not appear on his radar screen. The average broker has 300 accounts. Could you watch what is going on in each one if you had his job? It is not possible so there must be a way to protect your money. Yes, and it is automatic. When your stocks are going up and you are making money you dont want to give back those profits, do you? Of course not. There is a simple method known to every broker and financial planner, but you must insist it is done or you will transfer your account to someone who will. Money talks and he will understand that.

First you must determine what your risk level is. Are you willing to give back 5, 10, 15% of the price of your stock when it starts down? If you say 10% then each week tell your broker you want an Open Stop Loss Order placed on the closing price of each Friday (or Monday , Tuesday, whatever) as it moves higher and not to reduce that price.

This way he does not have to watch all the different stocks you have in your portfolio and you are protected against any big losses. He may not even want to do this and ask you to place those orders which you can easily do on the Internet.

Instead of trying to figure out where or when to sell your equity you let the price action of your stock tell you when it is getting weak. There are many ways of placing Stop Loss Orders and you may wish to use another method. Many can be found by using a search on Google by typing in the words stop loss orders. Your library should have books on the subject.

For a person who is working or cannot take the time to follow the market this is the best way to protect your investments. Consider it a lock on your profits. Go back and see how this would have worked if you had done it for the past 5 years. You would be money ahead.

CYA cover your assets.

Al Thomas

Albert W. Thomas has spent most of his life in the field of finance. In 1965 he founded an insurance holding company, Security Dynamics Investment Corporation, after having been an agent and General Agent for several life insurance companies. In 1970 he became cofounder and president of Real Life Estate, Inc., that marketed a unique real estate and life insurance package.

After he became interested in commodities he bought a seat for his personal trading on the Chicago Open Board of Trade, which is now known as the MidAmerica Commodity Exchange. Later he became a full time trader and also acted as a commodity broker for a few select clients. By fellow floor traders Al is considered to be an excellent technical analyst much of which is outlined in his book IF IT DOESN'T GO UP, DON'T BUY IT! It became a best seller on Amazon.

In 1981 he sold his membership on the Exchange and with his wife, Carolyn, lived full time aboard their 41' ketch, the Aumakua (which means guardian angel in Hawaiian). They sailed in Florida and the Bahamas for two years.

He founded World Trading Group in 1984 that grew to the seventh largest introducing commodity brokerage firm in the U.S. with 35 offices from coast to coast, Alaska and Canada. It was sold in 1992.

Al is a graduate of Northwestern University with a B.S. degree in Commerce and is a member of MENSA. He is now president of Williamsburg Investment Company that syndicates his weekly financial column since 1999 to more than 300 newspapers and writes a financial market letter called Over My Shoulder that is quoted in Barron?s and many other publications. A 3-month trial subscription is available on his web site. He is a regular guest on several financial radio talk shows.

His favorite pastime is fishing.

Mr. Thomas is available for speaking engagements. Please call 321-453-5300 for more information.