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Strategies & Market Trends : A.I.M Users Group Bulletin Board

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From: OldAIMGuy	12/9/2024 8:59:05 AM
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Market Risk Report Market participants' enthusiasm seems to have no bounds. New highs in the major market indexes are mundane because of frequency these days. I'm not complaining as this has allowed frequent inventory reductions in investment inventory as prices have been rising. Not to be like the Grinch, but maybe more like Scrooge, there are measurable increases in stock/fund market risk that have come with the index's upward slope. The v-Wave 3-5 Year outlook is showing caution with a value of 34% suggested cash. For the 18 Month time horizon the v-Wave is far more cautious at 48% suggested cash held in reserve. The SignalPoint Market Risk Indicator has similar posture with 37% cash reserve suggested. These values are unchanged from previous weeks. The MRI Oscillator is +3 showing only mild upward risk pressure. Let's review the three main objectives of investors: A) Price Appreciation over Time B) Dividend Capture over Time C) Profitable Volatility Capture over Time........ Right now both the v-Wave and the MRI are showing lower potential for "A." Some are saying stocks are "priced to perfection" and won't stand much bad news at this point. With the higher share prices, we're also seeing lower current yields, so "B" isn't as good now as at other times. Value Line shows its dividend yield as being 1.9% currently. Its long term median is 2.2%, so the market isn't offering us very generous coupons to clip on new dividend investments. "C" looks to be where our efforts will be most rewarded in the near term should the markets consolidate or retreat from current levels. We've had adequate opportunity to "sell to the greedy" during much of 2024 to build out our reserves of cash. Will 2025 be a year to "buy from the scared?" Our stock/fund inventory management method seems to be suggesting that could be in the future. But, remember that it takes more than a 15% discount from our most recent sale prices before we start to shift our cash back toward stock/fund inventory. Best wishes, OAG Tom Buy from the Scared; Sell to the Greedy.....

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