Mr. Market Is Distorting Your Tolerance for Risk

When NPR’s update of the day’s headlines mentions the stock market’s lack of volatility, conditions must be extraordinarily calm. Such is the case right now. The Chicago Board Options Exchange’s Volatility Index (the CBOE’s VIX)—an obscure index to those who don’t focus on the financial markets—made the morning news. While most investors prefer calm conditions…

 

A Look at Relative Strength Measures

Just as a rising tide lifts all boats, a rising market tends to lift all stocks. Well, almost all stocks. Upward price individual stock performance during a strong market may represent only average performance while a minor stock price decline during a major bear market represents strong relative price performance. Price momentum is normally measured…