• Skip to primary navigation
  • Skip to main content
  • Skip to footer
Mullooly Asset Management

Mullooly Asset Management

Fiduciary Fee-Only Financial Planner | Investment Advisor in Wall, NJ

  • Our Fees
  • About us
  • Schedule a Meeting

Making Sure You Don’t Miss Market Run-Ups

March 19, 2014 by Thomas Mullooly

https://media.blubrry.com/invest/p/content.blubrry.com/invest/Making_Sure_You_Don_t_Miss_Another_2009_March_2014_Podcast.mp3

Subscribe: RSS

Missing a market run-up is not something investors desire. It makes them feel left out, nobody enjoys that feeling. But how do you know when it’s time to move money back into the stock market after a big decline, like in late 2008 for example. Tom and Brendan talk about just that in this week’s Mullooly Asset Management podcast. They explain how we try to ensure our clients don’t miss market run-ups. The underlying theme of our work here is supported by the concept of relative strenth. Relative strength is something our friends at Dorsey, Wright and Associates have taught us a lot about.

Dorsey, Wright and Associates have taught us that relative strength illustrates which charts are moving up faster or slower than the market or their peers. We can run tests pitting one chart against another to measure their relative strength. It’s essentially a big arm wrestling match, where the winner displays superior relative strength to its adversary.

So how does relative strength help make sure you don’t miss market run-ups?

One of the long term indicators we rely on here at Mullooly Asset Management measures the relative strength of the S&P500 vs the bond market. Using the 2008-2009 time period as an example, we can show the value of relative strength. The relative strength chart of the S&P500 vs the bond market gave a sell signal in July 2008. When this chart gives a sell signal, it tells us that bonds are favored over stocks at that particular time. As we now know, July 2008 was a crucial point to be getting out of the stock market.

That’s great, but how does this chart let us know when it’s time to get back into the market?

This chart remained on a sell signal until June 2009. It then gave a buy signal, meaning that stocks had returned to favor vs bonds. As we know, the current bull market began in March of 2009. So the June 2009 buy signal on the S&P500 vs the bond market chart was a good indicator that it was time to move back into stocks. Relative strength is never going to get us in at the very bottom or out at the very top, but it does give us an accurate illustration of strong market trends. This is what makes relative strength a valuable tool in our arsenal at Mullooly Asset Management.

Tune into this week’s Mullooly Asset Management podcast to hear more examples of how the relative strength chart of the S&P500 vs the bond market has given us clear signals as to when stocks or bonds were in favor respectively.

Never miss a post...and we deliver!

newsletter mailman

Get our updates delivered right to your inbox. Sign up today!

Success! Now go and check your email to confirm your subscription.

There was an error submitting your subscription. Please try again.

We won't send you spam. Unsubscribe at any time. Powered by ConvertKit

Filed Under: Podcasts, Asset Management Tagged With: relative strength, stocks

About Thomas Mullooly

Thomas Mullooly is owner and founder of Mullooly Asset Management, Inc. In 2002 Tom opened Mullooly Asset Management, a fee-only investment advisory firm. As an investment advisor, and not a broker, Tom works strictly for his clients. With the help of point and figure charting, Tom builds a realistic game plan for clients.

Footer

2052 NJ-35, Suite #203
Wall Township, NJ 07719
Phone: (732) 223-9000
Fax: (732) 223-9600
Email: support@mullooly.net

  • Privacy Policy
  • Disclosures and Legal Disclaimers

Useful Links

  • Contact Us
  • Client Login
  • Pay Bill Online
  • About us
  • Our Fees
Text Example

The information on this website and blog do not involve the rendering of personalized investment advice. A professional advisor should be consulted before implementing any of the options presented. None of the content contained in this website should be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.

Follow Us

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

Resource Center

  • Videos
  • Podcasts
  • Blog

Copyright © 2021 · Design by :- Eliza Jack