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Adding Long Exposure

All of our core market health indicator categories improved this week. Our measures of market quality moved back above zero and as a result we’re removing hedges and adding long exposure to our portfolios.  All of our portfolios are now 100% long.

Measures of perceived risk subsided this week, but most of the components of our Market Risk Indicator are still negative. At the moment this is the most likely indicator that could have an impact on our allocations.  If the market falls substantially then I expect it will signal, resulting in aggressive hedges or moving to cash.  In the absence of a market risk warning we’ll most likely be riding out any volatility over the next few weeks.

Below are charts that show our allocations changes over the past year. Green lines represent adding long exposure. Yellow lines represent raising cash. Red lines represent aggressive hedging.

Hedged Portfolio Allocations

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2 Comments  comments 

2 Responses

  1. Ali

    Just wanted to comment that your graphics under “Market Conditions” to the right don’t reflect that you added to your long positions.

    Love your site – very fascinating analyses – thanks for all you do!

  2. DownsideHedge

    Oops. Sorry, I forgot to change the current conditions. Thanks for letting me know.

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