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Introduction To SEDNA’s Compass Risk Report

A common question that I often receive is where should I be investing my money right now. The answer really depends on your own time horizon and risk tolerance, but my answer to almost everyone is ideally you should be considering all investment ideas and judge whether you can benefit from one investing principle: Buy Low And Sell High.

After years of advising Financial Advisors for their portfolio models, I created the SEDNA Compass Risk Report as a simple guide for make changes to portfolios over time. The report is based upon a proprietary model that is updated daily and uses price, volatility and trend to evaluate the current investment opportunity for each asset class. The idea is to create a risk management tool that actually helps investors to buy at the low risk level and sell as the price reaches a maximum level and thus poses a greater risk to go down.


How Does It Work


Our Compass Risk Report evaluates asset classes using a yearly (rolling 12 month periods) model that changes based on what the market is actually doing in terms of the price, volatility and trend of that asset class. These factors change continuously so our models are automatically updated on a daily basis.

Ideally you want to sell or trim a position at the top end of the price range and buy or increase holdings at the low end. The  proprietary model calculates the direction and risk level of each followed asset class and produces a directional forecast similar to a compass. Our model also assumes a time frame of at least one year or longer so it’s ideal for long-term portfolios or retirement accounts.


How To Use SEDNA’s Compass Risk Report


Clients of SEDNA Wealth Management benefit in that each client portfolio is customized to their individual investment objectives and then we use our proprietary Compass Risk Report to effective manage the allocations within the portfolio.

Recently because of interest from some do it yourself investors and to show the public the how the SEDNA Wealth Management model differs from the average investment firm we have decided to release a monthly version of our Compass Risk Report. Using common ETFs to represent each asset class we will show you an end of the month snapshot of the same Compass Risk Report that we look at on a daily basis.

In reality most people would like to save themselves the trouble of figuring out when the appropriate time to adjust long-term portfolio holdings and simply hire SEDNA Wealth Management. However, there are plenty of DIY Investors and we are happy to provide this report although only on a monthly basis as a useful guide.

Thank you for taking a look and sharing with others,

Rick Drew, Managing Director


July SEDNA Compass Risk Report


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