The Fallacy That Bull Markets are Easy

Ben Carlson is spot on:

It’s easy to look back on it now and say how much of a lay-up it was to invest at the depths of the market crash in early 2009, but there weren’t too many people saying things were all clear at the time. Investors were scared and constantly waiting for the next shoe to drop. Ever since the recovery started people have been doubting it’s legitimacy. Pundits have been scaring people away with predictions of double dip recessions, hyperinflation and the collapse of the U.S. dollar.

Don’t let anyone tell you investing in this bull market has been easy. It hasn’t, but really, it never is.

A good portion of the money that we manage here at Dorsey Wright is in one of our Tactical Asset Allocation strategies.  One of the key features of these strategies is the systematic way that these models rank a broad range of asset classes and invest in or overweight the strongest asset classes.  We let relative strength dictate whether we are going to be invested in “defensive” asset classes or “offensive” asset classes.  Without a systematic investment process, it’s just as easy to mess up (often by sitting on the sidelines) in a bull market as it is in a bear market.

HT: Abnormal Returns

The relative strength strategy is NOT a guarantee.  There may be times where all investments and strategies are unfavorable and depreciate in value.

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