Market Risk Report as of December 27, 2022

From Chief Investment Officer Tom Veale,

The “Scout’s Motto” comes to mind when thinking about 2022. “Be Prepared!” For Scouts it means physically and mentally. For Investors and Investment Advisors it means much the same. 2022 challenged those who invest or manage investments in emotional and fiscal ways we’ve not seen since the outbreak of Covid – 19. Those who were prepared managed to average down in share cost as stock and bond fund prices sagged. Averaging down in cost while averaging up in effective yield is an effective countermeasure when Bears attack. It doesn’t immediately offer relief, but as markets recover, the benefits become apparent. Being prepared for such times and then executing a plan with that preparedness was 2022 in summary.

The SignalPoint Market Risk Indicator (MRI) closes 2022 in its neutral range and well below where it started the year. There are lots of “reasons” for investors to worry for 2023. There are also lots of reasons to see all the negative commentary on markets and the economy as possibly a sign the Bear has finished its gluttonous feasting. A hibernation would be welcomed by all!
Best wishes for the New Year,
Tom Veale
SignalPoint’s MRI falls one point this week to 33 with the MRI Oscillator indicating no new upward or downward pressure with a zero reading. Three MRI components fell in risk while one rose slightly. Of note was the Price/Earnings average falling nicely. The flip side of share price decline is the improvement in effective yield (dividends steady while shares decline). This put the Value Line Median Dividend Yield at 2.3%/Yr – the best it’s been since mid-October of this year.

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