The Barometer Top-Down Process
On a daily basis, we assess market risk and identify market leadership through our top-down methodology.
The process begins with a review of proprietary risk models to assess risk at the portfolio level. In effect, we are asking the question: is now the right time be invested?
Next, through our sector risk models, we further screen 41 asset classes, sector silos and geographic markets to identify pockets of the market that are experiencing positive capital inflows. By isolating areas of the market that are attracting investor interest we are able to isolate markets or sectors that are undergoing a positive revaluation.
While this screening activity provides an objective indication of capital flow, we believe that this must be accompanied by a thorough macro analysis to ensure that we understand what is driving any given revaluation trend.
In addition to identifying any emerging investment themes, it is critical that we take the time to understand both the technical and fundamental factors at play. This helps to ensure that we are able to properly identify the most appropriate security candidates for investment.