Market Risk Report as of April 15, 2019

From Chief Investment Officer Tom Veale,
“Again this week we have the Market Risk Indicator flat at 25% suggested cash for diversified stock portfolios. Also, the MRI Oscillator is again +2 showing only modest upside risk pressure.

With two MRI Components up and two down it washed out to no change seen this week. All components as well as the overall MRI rank are neutral for this period. The Relative Valuation Index shows room for either P/E or Interest Rates to move higher without becoming bearish. The Speculation Index is in the middle of its own neutral range.”

The Market Risk Indicator (MRI) is an assessment tool that serves as a guide through all markets as to the prudent use of a liquid cash cushion. It helps determine an approximation of the amount of cash reserve relative to a diversified equity portfolio. (this is depicted by the graph above)

At times of high risk in the market, the MRI will suggest a higher level of cash reserve. At times of low market risk, the MRI will suggest a lower level of cash reserve. This investment process helps to measure and manage market risk.

Because of this, the fear associated with the uncertainty of the market can be replaced by the security of a sound investment strategy.

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