About The Holistic Market Model

The HMM is the integration of three models:

1. A model that explains the total demand for all financial assets, whether equities, bonds, or cash

2. A model that explains the portfolio allocation across the three asset classes

3. A model that explains the price differential between equities and Treasuries – this latter model is a re-engineered Capital Asset Pricing Model

The first two models have been scaled from 1913 onwards; the third has been scaled over the last century and half.

The HMM answers two fundamental questions: 

1. Which forces, and in what combination, have driven the stock market over the past 150 years?

2. And how will changes to those forces determine where equity prices go next?

Most important, it calculates how changes in inflation, taxation, interest rates, income inequality, market psychology, and other drivers will determine future market levels.