Technical Analysis: Power Tools for Active Investors

Identifying High- and Low-Risk Investment Climates

As we know, all stocks, mutual funds, and related investments are not equal. In Chapter 1, “The No-Frills Investment Strategy,” we considered a strategy for identifying investments that are likely to prove more equal than the general population. Similarly, not all investment climates are equal. During some periods, stocks seem to rise effortlessly; during other periods, gains, if any, are more labored and intermittent. In this chapter, you will learn two readily applied strategies for segregating climates that are generally more favorable for stocks from climates that are, on average, really not much better than neutral climates and that represent periods when severe stock market declines are ...