Our Investment managers at Regal and Regulus use metrics to compare the performance of market components and their correlation to one another. We find great value in viewing the market objectively, and acting upon a set criteria for trades.
We use seven metrics to monitor our models position: 1. Fed Fund Rate 2. BAA Corporate Bond VS. 10-Year Treasury Spread 3. 10-Year Treasury/ 3 Month Treasury Yield Curve. 4. 10-year Treasury Yield 5. CBOE Equity Put/Call Ratio 6. Percentage of S&P 100 Above 200-Day Moving Average 7. Stock Market Fair Value.
By utilizing the monitoring of these metrics, this portfolio creates a specific sliding scale of allocations. This means that as the market becomes less favorable, more of your money gets positioned conservatively into cash . As the market becomes more favorable, your money invests more aggressively according to your risk tolerance.
• When 5 to 7 of our metric scores are negative, the portfolio is invested 75–100% in fixed cash
• When 1 to 4 of our metric scores are negative, the portfolio is invested 50–75% in fixed cash
• When 0 to 3 of our metric scores are positive, the portfolio is invested 10–25% in fixed cash
• When 4 to 7 of our metric scores are positive, the portfolio is invested 100% in the original risk tolerance allocation