2026 | March Risk Odometer

For the first time in nine months, our Risk Odometer moved lower, from +3 to +2.  Despite the move lower, our Risk Odometer remains in bullish territory, keeping our Current Outlook at its highest level of “Positive.” 

Causing the Risk Odometer to move lower was a spike in volatility, caused by the war in Iran that started on February 28^th.  This unfortunate event caused oil to spike above $100 and the stock market to be on edge.  Our volatility indicator is our most sensitive of the five indicators we monitor, and often the first to provide early warning signals.  Most other indicators remain bullish; therefore, we maintain a positive outlook.

Underlying our bullish perspective despite the decline in the Risk Odometer is the current strength of the economy.  Geopolitical events naturally create short-term volatility but rarely derail long-term bull markets when an economy is healthy prior to the event.  A strong economy is often able to absorb the shock, causing short-term volatility to become long-term opportunities.  This is how we are viewing the current situation. 

We have concerns that the short-term volatility has been minimal for an event of this magnitude.  We are on heightened watch as these situations can change quickly.  We would not be surprised to see additional short-term volatility, but we would view it as opportunistic given the underlying strength of the economy and its history for absorbing geopolitical shocks outside of a recession.

The recent geopolitical shock further reinforces our opinion that diversification is more important this year than in years past.  In the previous two to three years, a very select few large-cap technology stocks dominated while everyone else lagged.  That narrative has shifted recently.  Disruptive impacts from AI on software stocks, a broadening out of earnings growth, and macro-economic themes such as reflation have changed the landscape.  Sectors such as banks, energy, commodities, and international equities have begun to outperform, highlighting the importance of diversification in portfolios.  We believe this will continue until valuations fall in line with historical norms.

As always, we continue to believe our Risk Odometer provides guidance in making better investment decisions because it keeps us objective and disciplined.  We use this methodology and advise our clients to do the same.  Emotions are our enemies in investing. 

It is important to understand that our Risk Odometer is not designed to anticipate small to medium corrections, typically those in the 5-15% range.  Instead, it monitors for conditions which have typically preceded larger corrections.  We believe trying to anticipate small to medium corrections sounds attractive but more often results in lost opportunity than savings.

The Equity Market Risk Odometer is our guide for judging risk in the equity market.  It is used as a guide for investment decisions in our proprietary investment strategies.  It is composed of various indicators based on leading economic indicators, earnings, technical price action, breadth, and volatility.  Its score can range from +5 to -5.  Readings greater than one are positive and readings less than or equal to zero are negative.

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_{This information does not have regard to the specific investment objectives, financial situation and the needs of any specific person who may view this information. Statements, opinions, and forecasts made represent a particular observation and assessment of the market environment at a specific point in time and are not intended to be a forecast of future events or a guarantee of future results. Statements regarding future prospects may not be realized and may differ materially from actual events or results. Past performance is not indicative of future performance.}

_{FC Wealth Solutions and its representatives do not provide legal or tax advice. You may want to consult a legal or tax advisor regarding any legal or tax information as it relates to your personal circumstances.}

_{Michael Fickell is an investment advisor representative of FC Wealth Solutions}

_{Securities and investment advisory services offered through FC Wealth Solutions, a registered investment advisor.}

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