Wednesday, April 25, 2007

An comment from last night:

Just curious what your bear market strategy might be. The Zweig screen and Zacks stocks tend to do OK during bears. Would you maintain the same style, get out of the market, or switch to plan B?
Another question would be, how would determine that you're in a bear market?
Obviously, May 2006 looked pretty bear like.

My Answer:
Good question. I'm not smart enough to know where the market is headed. I thought things were looking pretty awful in February and if I would have stayed out for March and April I would have missed out on 15% worth of gains.

You're right about the Zacks and Zweig screens doing OK in struggling markets. You mentioned last May. My portfolio of Zweig and Zacks stocks lost 6.9% from May through July. Not too awful. Higher Relative Strength stocks did slightly poorer losing 10.20%. So if things did start to get sloppy, I would probably avoid some of the more volatile stocks that aren't rated on Zacks.

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