The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model declined toward the end of October but entered November with a fully invested equity allocation recommendation. If our models shift to bearish levels (below 40% for two consecutive days), we will raise cash.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the financial markets. The model improved toward the end of September and entered October with a fully invested fixed-income recommendation

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model declined toward the end of August but entered September with a fully invested equity allocation recommendation.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model held steady during July and entered August with a fully invested equity allocation recommendation.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model held steady during June and entered July with a fully invested equity allocation recommendation.

The risk management model seeks to reduce exposure to fixed-income sectors most sensitive to equity drawdowns. The model improved during the month and entered June, recommending full exposure.

Entering May, the fixed income allocation strategy’s positioning is overweight Long-term Treasurys, U.S. High Yield, and International Investment Grade. U.S. Investment Grade Corporates are neutral. Floating Rate Notes, Emerging Market Bond, TIPS, and Mortgage-Backed Securities are underweighted relative to the benchmark.

Entering April, the strategy continued to favor risk-on leadership but did not rebalance. The model remains overweight, U.S. Treasuries (allocated across short-, intermediate-, and long-duration), High Yield, & Emerging Market Bonds. The portfolio is market weight TIPS & Mortgage-Backed Securities & underweight U.S. Floating Rate Notes, U.S. Investment Grade, and International Investment Grade.

The allocation of International Investment-Grade bonds remained underweight. Rising inflation expectations are bearish for the sector but offset by rising stock market volatility. Price-based measures—rising relative strength and short-term trend—improved during the month to bullish levels.

Entering February, the strategy continued to favor risk-on leadership but did rebalance. The model remained overweight (versus the AGG benchmark), U.S. Treasuries, High Yield, & Emerging Market Bonds. The portfolio is market weight TIPS & Mortgage-Backed Securities & underweight U.S. Floating Rate Notes, U.S. Investment Grade, International Investment Grade, & International Bonds.

Entering January, the fixed income allocation strategy shifted to risk-on leadership. The model is relatively overweight: U.S. High-Yield, Long-Term Treasurys, Short-Term TIPS, U.S. Investment Grade Corporates, International Investment Grade, and Emerging Market Bonds. The model is relatively underweight in U.S. Mortgage-Backed Securities and U.S. Investment-Grade Corporations.

Entering December, the fixed income allocation strategy shifted to risk-on leadership. The model is relatively overweight: U.S. High-Yield, Long-Term Treasurys, Short-Term TIPS, U.S. Investment Grade Corporates, International Investment Grade, and Emerging Market Bonds. The model is relatively underweight in U.S. Mortgage-Backed Securities and U.S. Investment-Grade Corporations.

Entering November, the fixed income allocation strategy continued to favor mixed leadership. The model is overweight U.S. Long-Term Treasurys, International Investment Grade, and U.S. Treasury Inflation-Protected Securities. The model is underweight U.S. Floating Rate Notes, U.S. Investment Grade Corporate, and U.S. Mortgage-Backed Securities.

The risk management model seeks to reduce exposure to fixed income sectors most sensitive to equity drawdowns. The risk management model deteriorated from last month but entered October recommending full model exposure to areas most sensitive to equity markets: U.S. High Yield, Emerging Markets, U.S. Investment Grade, and Floating Rate Notes.

Entering September, the fixed income allocation strategy remains with a risk-on message and suggests no rebalancing from the month prior. The model remains overweight U.S. Treasurys, U.S. High-Yield Bonds, U.S. Investment Grade Corporate, U.S. Mortgage-Backed Securities, Emerging Market Bonds, and underweight U.S. Treasury Inflation-Protected Securities, and Floating Rate Notes.

Risk management model remains unchanged, advising full exposure to U.S. High Yield, Emerging Markets, U.S. Investment Grade, and Floating Rate Notes. Steady indicators support this allocation.

Risk management model recommends full exposure to equity-sensitive fixed-income sectors: U.S. High Yield, Emerging Markets, U.S. Investment Grade, and Floating Rate Notes. Fixed income markets show mixed performance, with short-term yields rising and long-term yields cooling. Sector allocations remain stable, with slight changes in weights.

The risk management model (chart at right) seeks to reduce exposure to fixed income sectors most sensitive to equity drawdowns (U.S. High Yield, Emerging Markets, U.S. Investment Grade, and Floating Rate Notes) during periods of market stress.

The risk management model (chart right) seeks to reduce exposure to fixed-income sectors most sensitive to equity drawdowns. The risk management model improved from last month and entered May recommending full model exposure to U.S. Treasury, U.S. Mortgage-Backed Securities, U.S. Corporates, International Investment Grade Bonds, and U.S. Short-Term Bonds.

With yields across the board declining in March, fixed-income sectors rallied. Entering April, the fixed income allocation strategy is overweight International Bond, U.S. Long-Term Treasury, TIPS, U.S. Investment Grade, and Floating Rate Notes. The U.S. Corporate, U.S. High Yield, and Emerging Market Bond sectors are underweight.