What Relative Strength can do:
- When applied to asset classes it can identify and keep you in the best performing asset classes
- Using cash investments as a proxy, it can keep you from significant losses, like 2008
- Help keep your emotions in check and give you a process to follow to avoid bad decisions
What Relative Strength won’t do:
- Absolutely avoid loss. Until reverting to low-beta asset classes, some losses are possible
- Most likely you won’t experience severe losses like the high beta asset classes in 2008
- Cause emotional panic since the system is fixed
Author: Brian Kasal