Market Risk Report as of October 7, 2019

From Chief Investment Officer Tom Veale,
“Three components of SignalPoint’s Market Risk Indicator (MRI) moved lower while one move up in risk profile. Three remain neutral while our Divergence Index moved into bearish territory with simultaneous increases in the number of 52 week high and lows last week. This left the MRI unchanged at 24% suggested cash for diversified stock portfolios and a zero for the MRI Oscillator.”

“Both the Relative Valuation and Speculation Indexes dropped back toward their bullish thresholds as stock market indexes remained nearly unchanged for the week. Overall the MRI is still just under the middle of its neutral territory.”

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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