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Risk-On / Balanced
Signal:

Normal Signal

Description:

Default state - when no stress signals are active

Action:

All metrics healthy → Balanced portfolio

Priority:

8 of 8

Trigger Condition
Real 10Y ≥ 0%
AND Real EY ≥ 0%
AND (EYP ≥ -1% OR no clear fork signal)
AND Real EY ≤ +3.0%

Key Insight

In Normal conditions, traditional portfolio construction principles work well. Focus on diversification, rebalancing, and long-term goals.

What This Means

  • •Financial system functioning normally
  • •Risk-free rate provides real return
  • •Equities compensate for inflation
  • •Standard asset allocation applies

Recommended Action

Balanced Portfolio

  • •Diversified portfolio appropriate
  • •Risk assets can be held
  • •Normal risk/return tradeoffs apply
  • •No forced rotation required