- Invest only when the market is in an uptrend
- Take defensive action when the market begins to weaken
Why is it Important
In many ways, the M in the MILARS strategy — market direction — is the most important.
You may be surprised to know that 3 out of 4 stocks move in the same direction as the market, either up or down. You may invest in quality stocks, but if the overall market is in a downtrend, it will be very hard for even the best stocks to move higher.
Simply put: If you buy a stock when the market is in a strong uptrend, you have a 75% chance of being right. But if you buy when the market is in a downtrend, you have a 75% chance of being wrong.
We keep an eye on the market direction; when our analysis confirms the start of an uptrend, that’s the time we recommend fundamentally strong stocks showing price-strength.
We constantly monitor your portfolio to make sure your gains are protected and losses are limited.
Our goal is to make money for our clients when the market is trending higher and to protect the profits when it starts heading lower.
That may sound obvious, but most investors pay no attention to the overall market direction. They invest randomly and simply ‘buy and hold’. It’s true that this strategy will make money during an uptrend, but ‘holding forever’ means not locking in your gains when a downtrend hits.
The truth is there is a good time and a bad time to buy stocks. Knowing the difference is the key to growing and protecting your stock market profits.