01 Jul Market Risk Report as of July 1, 2019
From Chief Investment Officer Tom Veale,
“This week’s Market Risk Indicator level remains unchanged at the median value of 26% suggested cash for diversified stock portfolios. The MRI Oscillator dropped to zero showing no upward or downward pressure on risk this week.”
“Note I’ve trimmed the MRI histogram to just the data starting in 2017 to the present. The solid bullish signal we had at the start of this year seems enough to give viewers an idea of how the MRI moves around with the markets over time. All four MRI components are neutral this week with two moving up and two down in risk profile. They cancelled each other out giving us the zero Oscillator value.”
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.