Market Risk Report as of April 6, 2020

From Chief Investment Officer Tom Veale,
“The Pandemic drama continues to unfold while equity and fixed income markets struggle to find equilibrium. This week SignalPoint’s Market Risk Indicator drops another two points to 10 while the MRI Oscillator shows minus 7 indicating further moderation of risk. This is the 3rd week of the MRI showing a strong bullish signal along with three of the four components also being bullish.”

“The three bullish components all rose slightly in their own risk profiles while remaining well below the Neutral thresholds.

Watching the MRI data unfold weekly gives us a feel for how quickly it responds to market conditions and also the effectiveness of its indications. While it may take a while for the markets to finish their bottoming process it appears downside risk is less than upside potential at this point.

SignalPoint’s Equity and Income strategies have mostly remained at or near their accumulation target prices. We continue to pace the flow of the cash reserves into the markets as the Pandemic story reveals itself.”

The Market Risk Indicator 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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