– 3 of 5 our key asset classes managed to finish the year in positive territory, with US equities leading for two yrs in a row.
– Growth stocks dominated, and 2020 beat the dot com era for growth vs value outperformance. Energy has been the worst sector for 6 of the last 7 yrs.
– Emerging market equities beat developed market equities in 2020, led by strength in Chinese equities.
– Despite a strong Q4 in credits, it wasn’t enough to outperform long duration Treasuries in 2020. Bitcoin finished the year up nearly 300%, and lumber more than doubled.
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Market Risk Index
Market Risk Index scales from 0 to 100%. Higher readings correspond with higher risk markets. Scores below 25% are bullish. Scores between 25-75% are neutral, and scores above 75% are markets vulnerable to major drawdowns.
Model Category Readings (Percentiles)
- Psychology 99.7%
- Monetary 87.2%
- Valuation 99.3%
- Market Trend 9.8%