I feel nauseous just looking at the ups and downs in the S&P 500's 10-year chart.

Source: Capital IQ, a division of Standard & Poor's.

Index investors didn't generate any real returns, even after their dividend checks. And I think we're in for another decade of volatility, which could start very soon.

Interest rates are pinned to the floor, yet economic growth is slowing. QE2 ends this month, which means easy money is about to go away. Europe's in trouble, the U.S. housing market is double-dipping, manufacturing is starting to slow down, and consumer confidence is beginning to wane.

Those don't seem like the ideal conditions for buying stocks.

But fear not. Oaktree Capital Management co-founder Howard Marks has some great words of wisdom in his new book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor: "One of the things I most want to emphasize is how essential it is that one's investment approach be intuitive and adaptive rather than be fixed and mechanical."

I don't know about you, but I want to make sure I have the right game plan to make money in a low-growth, high-volatility environment. That's why I'm following this "intuitive and adaptive" strategy:

  1. Find the best investments in the strongest trends.
  2. Invest when the odds are in your favor.
  3. Trade if trading is the right thing to do.

Here's what I mean.

Let's go macro!
To find the trends, we have to be willing to look beyond the balance sheet. That's a change from the bottom-up style I've used for years, but I'm not the only one having this epiphany. As value-investing guru Seth Klarman said to investors in his 2010 annual letter, "Bottom-up value investors would not wish to bet the ranch on a macroeconomic view, but neither would they be wise to ignore the macro economy altogether."

Klarman is practicing what he preaches. "Disaster hedging" has put gold stocks such as Allied Nevada Gold (AMEX: ANV) right next to his inflation-fighting shares of oil E&P Breitburn Energy Partners (Nasdaq: BBEP) and alongside his traditional distressed-value investments like CapitalSource (NYSE: CSE).

So don't take it from me. Take it from Klarman. Going forward, we must find the strongest trends and allocate money to the investments that will profit from those trends.

Just the odds, please
"How much is this business worth?"

Trying to answer that question cost me lots of money. No, I didn't lose money. Instead, I passed on lots of money-making ideas simply because my discounted cash flow analysis didn't give me a good number, even though I knew a business was very strong.

I don't want to keep repeating that mistake, so I'm asking a different question: Will this business be worth lots more tomorrow? I think that's what Buffett meant when he said that the value of the business "ought to just kind of scream at you that you've got this huge margin of safety."

Let's take Google (Nasdaq: GOOG) as an example.

Google is the undisputed leader of search advertising, a trend that's still going strong. It's also positioned to capitalize on the emerging trends of mobile search and display advertising. The company has plenty of growth ahead of it -- $98 per share of net cash, or 20% of its stock price, and it trades for 8.2 times next year's EBITDA. I don't care whether Google is worth $600 or $700 per share today. All I want to make sure is that the odds are in my favor. And with Google, I think they are.

Trading is not a dirty word
Buy-and-hold is a great strategy to build wealth. But it's not always the best strategy for every stock. In fact, Crestmont Research founder Ed Easterling, who has spent his career studying the stock market, echoes Howard Marks' comment in believing that investors must have a flexible investment strategy, one that can shift with the market's currents.

Easterling's research shows that sometimes we can sail along in the market using a buy-and-hold strategy, like from 2002 to 2007. Other times we have to man the oars and row with the market's current, willing to trade more frequently to grow and protect our capital.

Consider the data in this graph.

Source: Crestmont Research.

Big market swings destroyed investors' returns. Being willing to trade more frequently could have reduced the headaches -- and the losses.

If you'd invested in Coca-Cola (NYSE: KO) 10 years ago, you would have generated 6% annual returns, with half of that amount coming from dividends. Contrast that with Annaly Capital Management (NYSE: NLY). The stock is has generated 328% returns for investors over the past 10 years.

An astute investor would have been better off trading shares of Coca-Cola along the way, a not-so-intuitive insight. And although Annaly had more frequent ups and downs, buy-and-hold would have been the better strategy.

My point is this: Every investment is different, as is every environment. And just as a good carpenter has a truck full of tools and the knowledge to pick the right one for the job, so should investors. Not every investment lends itself to buy-and-hold -- and trading is not always a dirty word.

Putting it all together
It's been more than two years since the stock market and the U.S. economy started recovering from the depths of despair. Unfortunately, we're not out of the woods yet. Odds are good that we'll see more volatility over the next decade. That's why I've come up with my new investing strategy:

  1. Find the best investments in the strongest trends.
  2. Be vaguely right with the odds than precisely wrong with valuation.
  3. Let the investing context drive your trading decisions.

My flexible approach should pay off handsomely in a volatile environment. That's why I'm investing $50,000 of my own money using it.

I do think Google is an attractive idea today. But it's not the best stock for the next volatile decade. If you'd like to find out about the three strong trends and one money-making trade that I see today, I'll send it to you for free, along with the trade plan to help you make the most of the approach. Simply click here and enter your email address in the box so I know where to send it.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.