Market Risk Report as of August 9, 2021

Tom Veale
August 9, 2021

From Chief Investment Officer Tom Veale,

“All major U.S. indexes are showing healthy double digit gains so far in 2021. Even foreign and emerging market indexes are positive at this point. It’s difficult to find reasons not to feel good so far. Our Market Risk Indicator (MRI) shows risk is moderating slowly at this point.

Three of the MRI’s components dropped in their own risk ranges this last week . One only rose slightly.

If we assume the FED’s correct and the current inflation increase is “transitory” do we have to worry? I guess it depends on the duration of “transitory.” A 3% inflation rate reduces the purchasing power of $100 to just $75 in ten years. A 4% inflation rate takes $100 and reduces its value to just $66 in 10 years. The current CPI Core Inflation Rate is 4.5%. Let’s hope the transitory period is significantly less than ten years.

We continue to monitor our various strategies for both profit opportunities and inventory management. This is all being done in concert with overall Equity/Cash optimization.”

Best regards,
Tom Veale

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