Solid Indicators Are Investor's Best Friend

Following that simple buy-low, sell-high strategy, your stocks would be worth $148 at the end of September 2009 -- more than double what a buy-and-hold strategy would have given you. You can do the math -- over the nine-year period, you would have beaten the buy-and-hold returns by more than 8 percentage points a year, on average, and even more if you had put your cash in money market funds instead of your mattress.

Of course, this strategy would miss sizeable rallies and corrections. It's hardly the best possible way to manage money -- investment professionals with the time and resources to analyze an array of specialized state-of-the-art leading indicators should be able to do better still.

But the average person has little time to study the markets. For that person, the power of reliable leading indices of recession and recovery can spell the difference between a comfortable retirement and many extra years of work during his golden years.

We're now at a juncture where the importance of decent returns to repair many broken portfolios is painfully obvious. Yet, in such uncertain times, it's equally imperative to follow a low-risk strategy. The bottom line is that unless you decide to exit equities altogether, good leading indices should prove to be invaluable for navigating these treacherous economic shoals, with the economy likely to dip in and out of recession in the years to come.

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