The MRI takes various data components of the economy and assesses how far into the current business cycle they are relative to all previous business cycles in their data set. These various components are then averaged together approximate the level of risk in the overall market.

There is a strong negative correlation between the Market Risk Index and future returns in the S&P 500. The higher the Market Risk Index stands; the lower future returns are likely to be as shown by the colored table above.

Because the Index takes a comprehensive approach to assessing risk in the market, a single component of the MRI can be outweighed by the others.