The long-term stability of the stock market has been a source of potential concern for many investors. The possibility of a market crash can be a frightening prospect, bringing back memories of the global financial crisis of 2008. Yet, despite recent global economic and political uncertainty, some financial experts are now predicting that the chances of a market crash are extremely low.
At the center of current optimism is the “CITI-MAC” indicator, which establishes a baseline for market trend adjusting for global factors. Developed in 2006 by the CITI Bank of New York and the Massachusetts Institute of Technology’s Sloan School of Management, the indicator works by factoring in past market movements in order to assess future risks.
According to those behind the CITI-MAC, the indicator is able to provide a more accurate reading of risk levels in the stock market. By taking into account such factors as inflation, unemployment, interest rates and energy prices, it effectively measures potential volatility, while providing a more comprehensive long-term perspective.
In recent months, the CITI-MAC indicator has consistently returned readings of “zero” across all markets, indicating that the chances of a market crash remain highly unlikely. According to expert opinion, this suggests that the US and global markets are currently in a period of relative stability and strong returns are being made by properly managed investments.
While the chance of a market crash may remain to be seen, the CITI-MAC indicator provides an interesting perspective on risk levels in the stock market. Investors should use the indicator as a cautionary guide to assess their own risk strategies and make decisions accordingly. However, it is important to remember that there can never be any guarantees when it comes to the stock market.