While many consumers "feel" the pinch of paying higher interest rates or realize their job may be at risk when their company "restructures" to save money, they do not actively pay attention to the signs that the economy posts along the way to the tune of "how it's doing"? There are numerous economic theories by experts to choose from in trying to define the "economy's behavior." There are fiscal policy economists, supply side economists or international economists. Whose school of thought you subscribe to can define your perception. Rather than take a position in economic theory, we try to define how well the "tenor" of things is based on different economic indicators. We create this "model" in order for us to first gain an underlying sense of how things are. Our model calls for a review of several indicators that we rate positive or negative.
We review:

Long Bond Interest rates

Short Market interest rates

Market Breadth Indicators

Trailing Earnings Valuation

Forward Earnings Valuation

This type of economic review helps us determine if the underlying ground is too soft to walk on. We sometimes change our portfolio allocations based on what these signs tell us. We do this so you won't have to.