You can find the current signals of the long term Rhy Risk Indicator here.
- Systematic indicator for assessing long term risks in the stock market
- The long-term Rhy risk indicator (RRI) is based on three pillars: Fundamental, technical and psychological factors
- The measurement of investor risk appetite is a central aspect of the indicator
- Risk changes are measurable
Compared to the short term RRI, risk appetite is measured over a longer period of time and the criteria for a signal are more restrictive. In addition, the long term RRI also takes fundamental factors into account.
However, in order to generate a high risk or low risk signal, these must be confirmed by the technical and psychological factors. A signal comes first and foremost when the risk appetite reaches extreme values or there are divergences.
Due to the specific risk constellation, the indicator can be different between a potential correction and a bear market. All bear markets since 1970 have been preceded by a long term decline in risk appetite.
Again, there is no need to forecast individual factors such as interest or economic activity, as all these factors are automatically reflected in investors’ willingness to take risks.
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Long term RRI on the S&P 500 Index
Long term RRI on the MSCI World Index
Theoretical returns and drawdowns of a systematic trading strategy using long term signals: