Combining the Two Indicators
A strategy of being invested in the stock market only when both indicators—monetary and relative strength—are favorable would have had investors in the stock market between 1971 and 2003 only 31.4% of the time, during which invested periods capital would have appreciated at a rate of 30.4% per annum, with full-year gains averaging 8.7% per year (just less than the 9.2% achieved by buy-and-hold strategies).
These figures do not reflect additional income that might have come from interest while being in cash 68.6% of the time. Drawdowns and risk have been considerably reduced while this strategy has been in effect.
Point and Counterpoint
Stock market timing indicators, particularly those that produce trades on a relatively ...
Get Technical Analysis: Power Tools for Active Investors now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
