The buy-and-hold philosophy for exchange traded funds (ETFs) and other investing tools is still being pushed by many advisors. Whether it hold true or not, many investors are bailing out of the markets because they have been burned so badly and simply can not take anymore.

Never mind jumps like one week ago Friday, when the Dow Jones Industrial Average climbed nearly 500 points. Investors are losing income elsewhere and can’t afford to risk more erosion of stocks and bonds, reports Ianthe Jeanne Dugan, Diya Gullaplli and Annelena Lobb for The Wall Street Journal.

The market stalwarts are sticking with the stock market through thick and thin, but we’ve been pummeled so quickly that it may be time to reevaluate strategies. Is it still working? While many are still confident that a market upswing is nigh, we are in a different climate now and simply need to change our thinking.

Many investors are on the sidelines and there’s a lot of cash out there. We need to be ready for a turnaround when it happens, so investors need to be prepared to get back in using a trend-following strategy. An exit plan of selling when a stock or ETF is 8% off its high or below its 200-day moving average is what we follow.

An entry plan is just as important. When a fund is above its 50 day-moving-average, put 25% of the value of your portfolio in. When the fund is up another 5%, put another 25%. By this time, the 200-day moving average should be in sight and things should operate within their normal parameters again.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.