Eyeworld

for a market hit March 2017 • Ophthalmology Business 21 that haven't yet given buy signals. At 40%, there's plenty of room on the upside. But say 80% of all stocks are on buy signals. Then there aren't many stocks left to produce buy signals. So the odds of the market moving much higher become fairly slim. That means almost all stocks are now on buy signals. At that point, there's only a few left that haven't given buy signals. So anyone that wanted to get into the market is most likely already in. At this point, demand is beginning to dry up. What we want to watch for is when the bullish percentage starts falling off from those levels because that signals that supply is now start- ing to come back into the picture. So where are we today? Basically everything's calm right now. The New York Stock Exchange Bullish Percent, our main indicator, is on offense with good field position. This means that there is possibly more room for the market to run. But we'll certainly hit rough waters some time in the future, and we'll want to have a game plan because there'll be no time for deliberating, only time for action. OB also wasn't raining when Noah built the Ark. I like to be prepared for the worst, rather than make emotional, snap decisions about investments. (Those are almost always bad decisions.) Wouldn't it be better to have a clear indication of the trend of your investments before we make a decision to sell? Hopefully you won't need to take defensive steps right away. But eventually, you'll need to use some of these action steps. First, there are times to play "offense" in the market and times to play "defense." Playing offense (meaning to stay invested in the market 100% of the time) is just not a game plan. Playing offense 100% of the time (never selling) means you'll ride the roller coaster all the way to the top and then all the way down. Why go through the harrowing roller coaster ride when we have tools that tell us, very clearly, when supply starts to control the market? Anything with too much supply sees a price decline. That's not theory or even a fact. It's a basic economic principle. Although I can't guarantee you'll be getting out at the very top, I have clear signals when demand has dried up and supply begins to take control. Remember, the main objective when we play defense is to sidestep severe losses in your portfolio and stay in the game. Step one is to know whether we're on offense or defense. The way I know this is by monitoring the bullish percent charts. These insight- ful charts simply show the percent- age of stocks on buy signals. If only 40% of stocks are on buy signals, we know there are a lot of stocks around steps to protect your investment and/ or retirement dollars at that time. Losing money affects your re- turns for many years, not just 1 year. That's because if you have a year where you lose 20%, you'll need to make 25% to get back to where you started. So it's important that you do your best to avoid big losses in your account, whether that account is your regular brokerage account, your 401k at work, or some other retire- ment plan. What should you do to avoid big losses when the market starts falling? Well, the market is not falling now (as I write this article), but it Mr. Balser is manag- ing partner and chief investment officer of Balser Wealth Man- agement, Avon, Ohio. He can be contacted at roger@balserwealth. com.

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