Are we heading for a bear market?
PSG Wealth has constructed its own bear market risk indicator
Speculation has been rife, not just about whether US markets are nearing their next bear market, but about the potential knock-on effects on global economies. In the past, some investors even became famous by predicting bear markets correctly (and profited from it). But, while we can make educated forecasts, it’s not an exact science. To manage this potential risk, and provide its clients with the best advice possible, PSG Wealth constructed its own bear market risk indicator. The model considers four broad areas: fundamental, technical, sentiment surveys and macroeconomic data sets. It’s also flexible to ensure that it adapts to market changes and that it base predictions on the latest data. In line with its investment philosophy, PSG Wealth focused on building the core of the model around fundamental and macroeconomic indicators.
The typical fundamental indicators PSG uses are: Valuation of shares; Corporate earnings; and The number of initial public offerings. The model al...
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