Relative Strength is One of the Better Tools

by | Nov 5, 2007 | Asset Management, Stock Market Comments

One of Our Better Tools

We’ve got a tool we rely on here at Mullooly Asset Management called “relative strength.” This tool simply tells us which investments are moving faster than the entire market, or moving slower than the entire market.

Pretty powerful tool!

That’s important – if we want to beat the market, we need to own things that are moving faster than the overall market, right? And when the market is falling, some stocks just seem to really get crushed, while others hardly get scratched, right?

Why is that? Relative strength.

And since relative strength signals (buy signals AND sell signals) typically last about two YEARS; we have a high degree of confidence our money is in the right place.

So, the beauty of relative strength is that it keeps you in a stock (or in a sector) long after the “hot money” has left the playing field.

And this is where really tremendous gains can be scored.

For example, relative strength got us into oil in early 2002, well ahead of the crowds. And it told us to clear out of tech in the first quarter of 2000, before anyone knew the bloodbath that would occur.

Hey, relative strength doesn’t predict. It simply tells us what’s working RIGHT NOW. If you want to know what areas to avoid and what to focus on, send an email right now to and we can set up a time to talk on the phone.


Thomas Mullooly
Mullooly Asset Management LLC
Our Only Business Is Fee-Only Investment Advice


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