Market Entries vs Exits
A refresher of when our models will return to equity positions.
When do we buy the market again?
This serves as a refresher course designed to provide both our current and prospective clients with a firsthand understanding of how and when market movements are expected to occur moving forward. Currently, our portfolios remain in cash, following the Balance of Strength indicator turning negative on March 7th, 2025.
Balance of Strength Indicator
At present, the only scenario in which we would transition back to a fully invested position is if the Balance of Strength indicator shows a decline in the ranking of cash, moving it closer to the bottom. Currently, cash is rising in the rankings, indicating that institutional demand for cash is increasing. This signals a heightened likelihood of market weakness, as historically, when cash demand strengthens, there is an 86% probability that the market will experience a downturn. This presents a risk that no prudent investor should take lightly.
Calendar Effects Indicator
The calendar effects indicator is currently in the negative, but it is expected to turn positive on March 25th. It’s important to note that a calendar effects trade involves capitalizing on statistically favorable periods throughout the year that have historically yielded positive returns. These trades typically last for about a week. If the Balance of Strength does not return to positive territory during this time, the portfolio will be repositioned to a more conservative stance being cash/treasury notes.
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Bull/Bear Indicator Reading
Current reading of the Bull/Bear Indicator.
Our long-term market analysis relies heavily on the Bull-Bear Indicator, which, while currently showing a decline, has not yet reached the threshold necessary to turn negative. It is important to note that, for our portfolio to transition back to a fully invested position, both the Bull-Bear Indicator and the Balance of Strength (BoS) Indicator must be positive. This is a key component of our strategy, as we do not proceed with a fully invested stance unless both indicators signal favorable market conditions. As long as either the Bull-Bear Indicator or the Balance of Strength (BoS) Indicator remains negative, we limit our exposure to the market by engaging in only Calendar Effects trades.
A critical differentiator between our firm and others is our approach to investment decisions. While many firms base their strategies on predictions of what might occur or assumptions about what should happen, we take a data-driven, analytical approach grounded in what is actually occurring in the market. Our decisions are not influenced by speculation but by concrete, quantifiable data. This method allows us to manage risk more effectively and align our strategies with current market conditions, ensuring that every move is backed by actionable insights derived from rigorous analysis.
Yieldmax Indicator
Current indicator reading.
As of the close of business on March 17, 2025, the Yieldmax indicator, which exclusively governs high-yield fixed income, has turned positive. It is important to note that this indicator may experience whipsaw action, characterized by rapid shifts between exit and entry signals, until the high-yield bond market stabilizes.
The “Yieldmax” model will transition to an invested position in high-yield bonds today at market close. This indicator solely affects the Yieldmax model ONLY, which is dedicated to high-yield bonds when the Yieldmax indicator signals a “Long” position.
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Frequently Asked Questions
Commonly asked questions that might be of relevance.
What is a fiduciary and why is it important?
A fiduciary is a financial advisor or firm that is legally and ethically required to act in your best interest, putting your needs ahead of their own. This means they must provide unbiased advice, avoid conflicts of interest, and disclose all fees and potential risks.
The importance of working with a fiduciary lies in the trust and transparency it offers—knowing that the recommendations and services provided are designed solely to benefit you and help you achieve your financial goals, without any hidden agendas.
How does a fiduciary differ from a non-fiduciary advisor?
A non-fiduciary advisor may not be legally required to act in your best interest, which could result in recommendations that benefit them more than you.
In contrast, a fiduciary, like us at Royal Wealth Management, is bound by law to provide advice that serves your best interests at all times, ensuring that your financial well-being is the top priority.
By choosing a fiduciary, you gain peace of mind that your financial plan is built with integrity, transparency, and accountability.
Why should I choose a fiduciary for wealth management?
Choosing a fiduciary for wealth management ensures that your financial advisor is legally and ethically obligated to act in your best interest. This creates a level of trust and confidence that you won’t find with non-fiduciary advisors who might have other financial incentives.
At Royal Wealth Management, our fiduciary duty means we prioritize your goals and make decisions that are right for you, helping you secure your financial future with sound, unbiased advice.
What does being a fiduciary mean for my financial planning?
Being a fiduciary means that every aspect of your financial plan is designed with your best interests in mind. At Royal Wealth Management, we provide transparent, objective advice that is free from conflicts of interest, ensuring that our recommendations align with your unique financial goals. From investment strategies to retirement planning, we focus on helping you achieve long-term success, knowing that our fiduciary duty requires us to act with the highest level of care, loyalty, and integrity.