Chapter 12. Creating a Portfolio of Stocks
One method of preventing major loss is to avoid the market entirely when it is declining. This brings in another testing problem, that of timing the market rather than just individual stocks. Timing the market, using the reaction theory versus the prediction theory, is best done through creating a portfolio that includes specific rules.
You may now realize that you should never try to predict anything connected with the markets. You know the stock market is the best investment vehicle over time, but it often has serious corrections that you would like to avoid. You now know what techniques are important in the selection and deletion of stocks, and you know how to use them. You may protect yourself from ...
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