Investment Road Signsᵀᴹ Strategy Update
At Compass Wealth Management, we have developed a set of comprehensive economic and policy indicators called Investment Road Signsᵀᴹ that serve as guidance for our proprietary investment risk management system. These indicators help us determine whether we are currently on an Investment Highwayᵀᴹ or facing an Investment Detour Strategyᵀᴹ.
What is an Investment Highwayᵀᴹ?
We define an Investment Highwayᵀᴹ as a period of relative stability and normal returns across investment portfolios with little to no Investment Road Signsᵀᴹ present.
What is an Investment Detour Strategyᵀᴹ?
In contrast to an Investment Highwayᵀᴹ, an Investment Detour Strategyᵀᴹ characterizes a changing market environment as potentially higher volatility and greater market uncertainty where investment road signs are more prevalent.
So what are our Investment Road Signsᵀᴹ telling us at this moment?
We believe the jury is still out on a Fed policy road sign being present, which means the only road sign we see on our continued journey on the Investment Highwayᵀᴹ is the market valuation road sign.
What this tells us is that there is increased caution of an Investment Detour Strategyᵀᴹ environment when any road signs are present. However, the last time we had activity with our road signs in January of 2022, we considered every sign present which was a clear indication that we were in an Investment Detour Strategyᵀᴹ environment:
Please note: This graphic is from a previous presentation in 2022 that showed which road signs were present at that time. We added the unemployment road sign in 2023 therefore all road signs being tracked at the time were present.
Going forward, we will keep you posted for any additional Investment Road Signsᵀᴹ that show up which could indicate that an Investment Detour Strategyᵀᴹ should be considered.
Have questions or want to speak with our team directly? Contact us.
Robert Amato, CFP®, CIMA®
Principal
--------
This article may not be copied, reproduced, or distributed without Compass Wealth Management’s prior written consent.
Compass Wealth Management is a Registered Investment Advisor. Advisory services are only offered to clients or prospective clients where Compass Wealth Management and its representatives are properly licensed or exempt from licensure. This article is solely for informational purposes and is not intended to be relied on as a forecast, research, or investment advice, and is not a recommendation, offer, or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by Compass Wealth Management to be reliable, are not necessarily all-inclusive, and are not guaranteed as to accuracy. Past performance is no guarantee of future results. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. Investments involve risks.