Regime
What a market regime is
Why the same portfolio is riskier on some months than others.
Markets have moods. For months at a time prices drift with small daily moves and holdings that usually behave differently keep behaving differently. Then something shifts: daily moves double, everything starts falling together, and a portfolio that looked well spread out suddenly moves like a single bet. Analysts call these moods regimes, and the two that matter most are calm and stressed.
The reason a regime matters for you is simple. Your risk numbers are built from recent history. In a calm regime, recent history is gentle and the numbers are reassuring. When the regime turns, the numbers lag: they keep describing the calm months while the market has already moved on.
How Sentinel reads it
Sentinel watches how jumpy the broad market has been and how strongly holdings have been moving together, and classifies the current state. It then cross-checks that reading against credit markets, where stress often shows up first, and tells you whether the two agree. When prices say calm but credit says stressed, the page says so, because that disagreement is itself a warning.
What to do with it
Nothing automatic. A stressed regime does not mean sell; it means read your Value at Risk with more suspicion, look harder at the stress tests, and expect your holdings to fall together if they fall. A calm regime is not a promise either. The regime read is context for the other numbers, not a signal on its own.
