Objective research to help experienced investors navigate equity market extremes
Introduction to the True Risk Service

What is True Risk

  • An objective measure of prospects for future equity returns
  • Designed to highlight long-term market extremes
  • Calculated by monitoring the gap between sentiment & the underpin to equity prices from valuation and fundamentals
  • Current week’s score can be compared to similar scores over 25 years of history to evaluate future return prospects

How can True Risk help me?

  • Equity positioning prior to, during & after violent market corrections has hugely impacted returns & client performance for many years afterwards
  • Our goal is to help subscribers make better decisions by providing an objective research input to their investment process
  • True Risk has consistently performed better than valuation measures on their own when evaluating prospects for future equity returns

Your key decisions where the True Risk service can help:

  • When to buy downside protection?
  • Should new cash flows be held back or deployed in the market?
  • When to be aggressive and go “mandate maximum” invested in equities?

Markets currently covered:

  • S&P500
  • FTSE/JSE Top40
  • Coming soon: Nasdaq, ASX200, Kospi200

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MACROtimer’s weekly True Risk measure for the S&P500 showed extreme risk levels 44 times over the past 25 years. The subsequent total return over the next 2 years averaged -14.9%. In contrast, the 20 occasions True Risk scored very low, the average subsequent 2 year return was 52.4%.

“No we can’t tell you whether this is the top or bottom, but by highlighting the current True Risk score and showing what that score has meant for future returns, we provide an objective input to your process to help you navigate equity market extremes.” see below (*)

“MACROtimer’s author has 22 years experience in investment management, in analytical and money management roles with both large institutions and hedge fund boutiques. After selling his shares in his hedge fund manager employer in March 2014, the author has spent the past year developing the True Risk service with one goal in mind: To provide an objective input that helps investors improve their decision making around equity market extremes, and make it widely available at an affordable price.”

(*) Actual future returns can deviate dramatically from historic averages & hence may bear no resemblance to the returns depicted above. Total returns on the S&P500 per Bloomberg data. Based on MACROtimer 25 year S&P500 weekly backtest over 1286 weeks. Extreme risk taken to be a Minsky Ratio score of +3 or +4, very low True Risk taken to be a Minsky ratio of -7 or -8. Please register and log in for more details on the methodology used.

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New from MACROtimer – True Risk Service for the Top40 Index

MACROtimer now also offers the True Risk service for the FTSE/JSE Top40 Index.

MACROtimer now also offers the True Risk service for the FTSE/JSE Top40 Index.

Subsequent total returns averaged -27.5% in the year following an extreme True Risk reading, compared to an average gain of over 40% for the year after a very low True Risk reading.      See (#)

The service is based on a 13 year/700 week backtest using similar methodology to the S&P500 True Risk service.

Ideal research input for SA focused hedge funds, wealth managers & volatility traders

Affordable pricing to assist smaller businesses and investors

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(#) Actual future returns can deviate dramatically from historic averages & hence may bear no resemblance to the returns depicted above. Total returns on the FTSE/JSE Top40 Index per Bloomberg data. Based on MACROtimer 13.5 year Top40 weekly backtest over 700 weeks. Extreme risk taken to be a Minsky Ratio score of +3 or +4, very low True Risk taken to be a Minsky ratio of -5, -6, -7 or -8. Please register and log in for more details on the methodology used.