Market Risk Report as of June 27, 2022

From Chief Investment Officer Tom Veale,

Like a kid in a life jacket, the markets were dunked and then resurfaced quickly last week. Were there reasons for this? Probably, but what is interesting is what is the effect for serious long term investors. Our Market Risk Indicator (MRI) was stubbornly giving cautious signals for the better part of two years. That’s a long time in the face of rising indexes. Now, as indexes have been in decline, did we see the odd market behavior as being correct or the MRI?

With the MRI nearly at its Median value, is it time to load up on equity investments? Or is it time to slowly shift cash assets to those sectors which have been driven downward in 2022? The SignalPoint Process has been busy rebuilding inventories of downtrodden ETFs where the discounts have been deepest. The MRI seems to suggest we have a better chance of seeing equities rise from here than we’ve had in quite a while.
The SignalPoint Speculation Index has moved solidly into its lower risk range.
It’s taken a thorough washing of the equities markets to rid itself of speculative zeal. Can we move forward from here?
All of the other MRI components are neutral as of the start of the last week of Q2, 2022.
Best regards,
Tom Veale

The MRI dropped to 28 this week and the MRI Oscillator moved to negative 5. The low Oscillator value suggests market risk is retreating quickly here. At 28, the MRI is just 2 points above its Median value. After tedious months of very high average stock valuations we seen the MRI’s Relative Valuation Index drop back to its neutral range. This doesn’t suggest “bargains” but at least “fair value.”

Share Article: