From John Prestbo at Marketwatch (link)
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First, never rely completely on past patterns prevailing in the present or future. Lots of busy, distracted and lazy investors will do just that, which creates opportunity for those who take the time to observe market trends carefully.
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First, never rely completely on past patterns prevailing in the present or future. Lots of busy, distracted and lazy investors will do just that, which creates opportunity for those who take the time to observe market trends carefully.
Second, develop a keen appreciation of the interconnected nature of the market. Large and small, growth and value, industry-group and sector -- they all are entwined; anything affecting one will affect the others. Banks took it on the chin in the subprime mess, and look what that's done to large-cap value as a strategy.
...Third, when the market starts climbing again, don't assume the most-clobbered style will rebound the fastest. In the year following the market bottom on Oct. 9, 2002, the DJ Wilshire Growth Index did soar a stunning 39.87%. But that was only slightly better than the 38.61% gain for the DJ Wilshire Value Index. And value outperformed growth over the ensuing three years.
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