Johnny Ringo Market Risk Dashboard

The Johnny Ringo Market Risk Dashboard attempts to define risk across multiple asset classes. Rather than looking at market price action alone, this dashboard aggregates data from the following to provide a Market Overview:

The Volatility Index (VIX) (aka The "Fear Gauge"): This measures how nervous investors are feeling. High fear usually means seasoned investors are hedging and trouble is coming.

The 10/2 Spread (10Y/2Y) (The "Economic Engine"): This compares Interest rates on 10yr and 2yr Bonds. When bond rates go up, bond prices go down because you get paid more for "locking up" your money for 10 years and the extra risk over time. So, when the 2yr starts paying more Interest (a curve inversion) the market expects a recession.

US Dollar (DXY): This is how strong the US Dollar (USD) is.

-- Strong USD has more buying power outside the US and makes imported goods cheaper for US Citizens to buy and US made products become expensive for people outside the US can lead to lower sales of US products. Then, when the foreign currency gets converted back to USD it then buys less USD so the company actually gets less income for their product.

-- Weak USD has less buying power outside the US and makes imported goods more expensive for US Citizens to buy and US made products become cheaper for people outside the US, leading to increased sales. Then, when the foreign currency gets converted back to USD it buys more USD so the company actually looks like they are making more money.

S&P 500 Equities (SPY): This tracks the 500 biggest of the big boy stocks.

S&P 500 Equal Weight (RSP): This is the same as SPY, except it treats all 500 as equal weight, so the "Big Boys" don't over influence.

Small Caps (IWM): This looks at smaller businesses and they are a good way to monitor the economy because, if they are struggling, then it’s likely the whole economy is slowing down.

This dashboard uses two simple math tools to see if the current data is "normal" or "extreme"

1. The Trend Filter: This compares each instrument to its 20-day average and determines whether the trend is up or down.

2. The Ranking System: This compares each instrument to its 90-day history and determines whether the level is unusually high or low.

The user enters (in settings) their time to retirement, time to first withdrawal and time to RMD. This is because, from the two very same people below ... the first person can be more of an accumulator, while the second person is more of a protector with a different approach.:

-- 60yrs old, 5 years from retirement, withdrawal age 70, RMD 70
-- 60yrs old, 5 years from retirement, withdrawal age 65, RMD 70

Based on their individual situations the Dashboard tracks the market and attempts to determine and alert each person to their current Risk Level using a traditional Traffic Light color system. The Dashboard then alerts the user to what it thinks is their best approach to the market, based on their profile, as one of the following:

Aggressive: The market is clear and safe to put your money into stocks to grow your savings as fast as possible.

Lower Risk: The market is still good, so you can keep most of your money in stocks but start keeping a little bit in "safe" spots.

Balance Out: The market is 50/50, so you should have an equal amount of "Risky" stocks and "Safe" bonds so, if one side grows too much you can move money to the other and stay balanced.

Look to Bonds: The market is getting shaky, so move money into Bonds that pay you back with interest, because they are much safer than stocks during bad times.

Stable Funds: The market is getting dangerous, so move money into the safest possible accounts (like cash or savings) where their value won't drop with the market.

Most Important of all:

THIS DASHBOARD IS AN EDUCATION TOOL TO HELP YOU UNDERSTAND THE MARKET.

THIS DASHBOARD DOES NOT FORECAST THE MARKET OR GIVE FINANCIAL ADVICE.

THIS DASHBOARD SHOULD NOT BE USED TO FORECAST THE MARKET OR GIVE FINANCIAL ADVICE !!!

HAVE FUN ... Ringo