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RISK INDICATOR
Getting the odds on your side
The most fundamental question in equity investment
Panic selling is common in stock market dips - because few know the answer the most fundamental question in equity investment:
"Is now a good time to own stocks - or not?"
Risk indicator app
Stock Market Safety Level
The RISK INDICATOR's “Stock Market Safety Level” display a safety level between -100 and +100. Negative or Positive is pivotal - the level merely indicates distance from turning point and can change rapidly due to market stress.
RISK INDICATOR's quant algorithm is an objective and mathematical model based on macro-economic and financial market stress data.
Strategy
In the App - Strategy displays the outcome of acting 100% upon the App's Stock Market Safety Level - being in stocks in Green (positive safety level) and out of stocks in Red (negative safety level).
- opposed to the Benchmark being in stocks all the time.
In some periods Benchmark outperform the Strategy in terms of absolute return - however accompanied of much higher risk (Drawdowns). Research shows that Drawdowns exceeding -10% for many Private Investors is intolerable and make them leave the stock market in large numbers creating a new problem - when to return?
Drawdown
In the App - Drawdowns displays the Strategy outperforming the Benchmark in terms of drawdown reduction.
Stock Market Drawdown Statistics
- Drawdowns exceeding -5% occurs every year.
- Drawdowns exceeding -10% occurs every 3th year.
- Drawdowns exceeding -20% (defined as "Bear Markets") are more rare - however identifiable and manageable by the RISK INDICATOR's algorithm to the benefit of the investor.