From the early 1980s through October 1997, investors benefitted from a persistent “risk on” (bullish) market. In today’s environment, the timing and duration of “risk on” and “risk off” (bearish) periods will be difficult to predict. Understanding when they begin and end will be a critical component to investment and risk management strategies.
MY TAKE: Investors must be nimble and adaptive to the changing landscape. I have added a process to monitor “risk-on, risk-off” market changes to my investment toolbox (more details will be shared in the coming weeks). As of Friday’s market close, the S&P 500 and FTSE 100 were among the market indexes in “risk-off” mode, but that could change soon.