Systematic Relative Strength

The table below shows the performance of a universe of mid and large cap U.S. equities, broken down by relative strength decile and quartile and then compared to the universe return. Those at the top of the ranks are those stocks which have the best intermediate-term relative strength. Relative strength strategies buy securities that have strong intermediate-term relative strength and hold them as long as they remain strong.

Last week’s performance (3/15/10 – 3/19/10) is as follows:

Last week went to the laggards.

No journey ever seems to get taken without that question getting asked. Most parents have experienced it coming from the back seat of the family car. Most investment advisers have heard it from clients wanting to know if the bull market has run its course.

The Chart of the Day offers some good historical perspective on how our current bull market journey compares to previous ones. Are we there yet?

The Chart of the Day indicates our journey could last a while longer in both distance traveled and time.