As investors, one of the most difficult things to do is to keep an open mind. Rather than let your feelings interfere with reality, you should avoid trying to have too strong an opinion on where the market may be headed and you should just let the facts on the ground (or in this case the trading floor) determine how you will manage your money.

I know there are many reasons to feel cautious about stocks going forward, but there is no denying that we now have seen the major market averages breach their critically significant 200-day moving averages. The breaking through of this technically significant barrier can be seen in the chart here of the S&P 500 Index.

Technically speaking, this breakout is one big bullish harbinger for stocks going forward. And while some may argue (correctly, I might add) that the fundamentals in the economy and on many corporate balance sheets still are shaky, there's no denying the objective reality that stocks are back above both short- and long-term technical resistance.

One of the pearls of wisdom that I received from my father, Dick Fabian, was that when the stock market is above its 200-day moving average, there is a very good chance that it will continue moving higher. That's simple advice, I agree -- simply beautiful advice.

Another thing that my father taught me is that when investing, you must always look at the worst possible outcome. So, if you were to make a move into stocks now that we have breached the 200-day average, and if you place a stop-loss order in around 7-10% below your purchase price, the worst that could happen would be you'd lose that 7-10%.

I don't know about you, but I say if you aren't willing to take that kind of small risk as an investor, you probably don't belong in the stock market.

Recently, subscribers to my Successful Investing advisory service received a new buy recommendation based on the movement of stocks above the 200-day average. If you'd like to find out how exactly we are playing the market's latest move, then I invite you to check out the service now.

A Bull Roams China

It's been a very tough slog for Chinese stocks so far in 2010. The country's stock market is one of the worst performers of the year, and the heavy selling that took place from early April to late May really ramped up the fear of having any exposure to China. Yet, as we've seen so many times this year, when the fear reaches a tipping point, it's usually the signal for buyers to step in.

This is exactly what's happened in China of late, particularly in stocks that make up the iShares FTSE/Xinhua China 25 (FXI). This exchange-traded fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE/Xinhua China 25 index. Basically, this index contains the top 25 stocks traded on the Shanghai Stock Exchange.

As you can see by the chart here of FXI, the fund now has breached its 200-day moving average, a clearly bullish signal indicating strong future upside potential.

My ETF Trader advisory service has used FXI in the past to profit from the frequent waves of buying in one of the world's biggest and fastest-growing economies. This year, the China trade has been extremely volatile; however, I think the next round in China is going to be decidedly higher.

If you want to find out how we're playing the latest China equity surge, then check out my ETF Trader advisory service today.

ETF Talk: Eyeing Indonesia

The Indonesian equity market ranked as one of the best-performing markets in the world through the first half of 2010. Van Eck's Market Vectors Indonesia ETF (IDX), a fund designed to track the Indonesian stock market, jumped 13.55% during the first six months of 2010.

The Indonesian market is advancing further so far in the second half of the year. As a result, IDX certainly has my attention. The ETF is intended to replicate, before fees and expenses, the price and yield performance of the Market Vectors Indonesia Index. The fund offers an easy way for you to ride the upward climb of the Indonesian market.

A big advantage that helped Indonesia during the downturn is the nation's vast natural resources, which let it benefit from the China-driven commodities boom and should boost Indonesia's economy going forward. The country also now appears to have political stability. That reduced political risk is no small accomplishment in a nation that previously had endured civil unrest. Indonesia's second-term President Susilo Bambang Yudhoyono, known better by his initials SBY, is a former army general who took office in 2003 and has led reforms that included trimming the government's debt as a percentage of GDP to about 30%.

SBY also played a role in ending a civil war with renegade provinces and launching an anti-corruption drive that jailed politicians and central bank officials. His plan for Indonesia during the next five years includes increasing economic growth to 7% by 2014, cutting the poverty level to 8%, and slashing unemployment to 5%. In addition, the government plans to spend up to $34 billion to build roads, ports and power plants by 2017. Combined with projected private sector growth, Indonesia's $433-billion economy should almost double to $800 billion in the next five years.

Even though IDX has been a solid performer so far this year, it appears to have more room to run. If global markets rebound during the second half of the year, IDX should be able to finish 2010 among the top-performing funds in the world.

The Lemony Taste of Mutual Funds

It's summer, and the weather is heating up all across America. To cool off, many people will pour themselves a tall glass of ice-cold lemonade. Hey, I think it's fine if your lemons get squeezed into lemonade, but what isn't fine is if you have lemons in your investment portfolio.

The lemons I'm talking about here are underperforming mutual funds. These lagging funds have earned a spot on the infamous Mutual Fund Lemon List, the list of the worst-performing mutual funds. To be classified as a lemon, the fund must pass strict screening criteria: it must underperform its peer group average for the last 12 months, as well as for the last three- and five-year periods.

Here's a list of this quarter's 10 sourest offenders, ranked by assets.

This quarter's Lemon List includes 1,584 mutual funds -- totaling $715 billion in assets. If one of the funds you own is on the list, you need to squeeze that lemon from your holdings.

To see the latest edition of the Lemon List, and to get your FREE update each quarter, just go to the Mutual Fund Lemon List website today.

Hey, all you have to lose is that sour taste in your portfolio.

Radio Show Update: Managing the Million Dollar Portfolio

In last Saturday's radio show, we talked about the new financial reform laws, and how they may affect your money. We also continued our discussion on underperforming, lemon mutual funds. If you didn't get a chance to listen to this informative hour, then don't worry. As an Alert, reader you have FREE access to my Radio Show archive, and all you have to do is go to the website and listen for yourself, at your convenience.

This week, we have a show dedicated to the very successful investor (and to those who aspire to great success). The topic will be how to manage the million-dollar portfolio. Hey, it's just a fact that greater wealth brings heightened responsibility to prudently manage your money. This week's show is dedicated to what it takes to employ that increased level of prudence.

To listen to the show live each Saturday morning from 10 a.m.-11 a.m. Pacific Time, just go our website.

Remember that we are back live on the air in Phoenix, with the show airing every Saturday morning, 10 a.m. Pacific Time, on KFNN 1510, Arizona's premier financial radio network. If you live within listening range of KFNN 1510, then I invite you to tune in.

On Grasping Principles

"As to methods there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble."

--Ralph Waldo Emerson

These words of wisdom can be applied to virtually any human endeavor, but they are particularly poignant when applied to your money. Remember that sound principles of money management are always in vogue, and it is only after we understand these principles that we should attempt to apply different methodologies designed to make our money grow.

Wisdom about money, investing and life can be found anywhere. If you have a good quote you'd like me to share with your fellow Alert readers, send it to me, along with any comments, questions and suggestions you have about my radio show, newsletters, seminars or anything else, click here to ask Doug

Sincerely,

Doug Fabian

P.S. It's not too early to start making plans to join me at the MoneyShow in San Francisco, August 19-21. This year's event will be held at The Marriott Marquis and will feature 50 of the world's smartest investors, traders and analysts. To join me in San Francisco, you can register FREE of charge by calling 800/970-4355 and mentioning priority code 018509 or by visiting the MoneyShow's website at The MoneyShow San Francisco!

Doug Fabian's Wealth Strategies airs live Saturday morning 10 a.m. Pacific Time on KRLA News Talk 870 AM, and in Phoenix, AZ, at 11:00 a.m. Mountain Time on KFNN 1510 AM. During these times you can listen to the show live from anywhere in the world and you can listen to archived shows at any time. Now you can view Doug's daily market update, guest interviews and excerpts of his radio show at our new Video Archive. Subscribe to the FREE podcast