Market Risk Report as of December 12, 2021

From Chief Investment Officer Tom Veale

“As 2021 winds to a close I’ve been thinking about some things. What’s a world like without the SignalPoint Market Risk Indicator?

While maybe not the Perfect market timing device, I hope it has been a relatively good guide along the path we’ve chosen. In just the last few years the MRI has given some very clear signals as to what was going on in the marketplace. It still seems to be better at calling out strong Bullish periods than Bearish ones. However, the Bears don’t always put out a calendar notice of when they’re coming out of hibernation. The above illustration shows good probability one would have made money almost anywhere along this short history. However, how much better would one have done if the MRI had been referenced as part of one’s investment strategy?

“In 1962, the business historian Alfred D. Chandler wrote that “unless structure follows strategy, inefficiency results.”

“At most asset managers, strategy follows structure instead. As a result, funds own too many stocks, trade too frequently and charge too much. No wonder most active managers underperform market-tracking index funds that charge a fraction of their fees.”

“Skill is just recognizing when you’ve gotten lucky. It’s when you’ve been fortunate enough to make an investment in a great company, and suddenly you realize just how very lucky you were, and you buy more. That’s skill, I suppose. That—and holding on to what you have and not chickening out.”

The SignalPoint Process provides the Structure in concert with the Market Risk Indicator as both incorporate our Strategy of keeping investment risk balanced with potential rewards. This has kept our trade frequency and portfolio turnover low and our average invested amount relatively constant through our Company’s history. We’ve displayed Strategy, Structure and Discipline all along the way. (it’s hard work remaining contrary!)

I wish everyone a very happy Holiday Season as we close out 2021,

Tom Veale

The MRI dropped a point to 37 this week as the markets rallied back upward. The MRI Oscillator shows minus 1 or very slight risk reduction pressure compared to a week ago. Three MRI components rose in their respective territories while one dropped.”

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