When Inflation Eases, This Medical Apparel Maker Finds New Momentum

How softer consumer prices and shifting rate expectations could boost FIGS' growth trajectory

FIGS FIGS, Inc.

In this report

01

Economic Snapshot

Current readings, macro dashboard, outlook

P. 2

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02

Historical Context & Fundamentals

Rates, inflation, GDP, employment, company snapshot & trends

P. 3-5

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03

Macro Sensitivity

Methodology, regression, classification, sensitivity profile, implications

P. 6-10

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04

Event Response

FOMC, CPI, NFP reactions, distributions, persistence

P. 11-13

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05

Regimes & Cycles

Current regime, historical performance, cycle phase

P. 14-17

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06

Peer Comparison

Sensitivity vs peers, positioning

P. 18-19

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07

Timing & Persistence

Lead-lag analysis, cross-correlation, persistence, methodology

P. 20-23

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08

Stress Testing & Summary

Scenarios, impact analysis, methodology, takeaways

P. 24-27

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Macroeconomic Context

The Economic Snapshot

Where the Economy Stands Today

The effective Fed Funds rate sits at 3.63%, roughly 75% above its long‑run average of 2.07% and near the 68th percentile, indicating a persistently tighter monetary stance that compresses discretionary spending for physicians who are FIGS' primary customers.
Long‑term yields have surged to 4.67% on the 10‑year Treasury—at the 98th percentile versus a 2.72% average—pushing up financing costs for healthcare providers expanding clinics or acquiring equipment, which could curb capital‑intensive spend and slow adoption of premium uniform contracts.
Core inflation is modest at 2.8% YoY, below its historical mean of 3.1%, while headline CPI remains slightly elevated at 3.7%; the decoupling suggests price pressures are easing but wages and supplies in healthcare may still rise, preserving some cost‑push pressure on provider margins.
Real GDP growth is lagging at 1.5% (22nd percentile) despite a recent uptick, reflecting a sluggish macro backdrop that limits overall health system revenue expansion, yet the unemployment rate has fallen to 4.2%, improving labor market confidence and potentially boosting elective procedure volumes.
Consumer sentiment plummets to 44.8—well below its 79.8 average—signaling weak consumer confidence; while this metric is less directly tied to B2B uniform sales, it hints at broader fiscal restraint that could delay non‑essential upgrades in clinical attire.
The yield curve remains steepening with the 2‑year Treasury at 4.22% (83rd percentile) versus a still‑high 30‑year mortgage rate of 6.66%; this environment rewards cash‑rich balance sheets and may pressure FIGS' financing costs if it relies on debt for growth initiatives.

Highlight

The 10‑year Treasury yield at the 98th percentile is the most consequential macro signal for FIGS, because higher long‑term rates raise the cost of capital for hospitals and physician groups, directly dampening demand for premium uniform contracts that are priced above commodity alternatives.

Economic & Company Trends

Historical Context

Monetary Policy & Inflation

Real Economy & Consumer

Key Indicators Summary

Economic & Company Trends

FIGS — Company Snapshot

Key Fundamentals at a Glance

Revenue growth has accelerated to 4.8% YoY, outpacing the company's five‑year average of ~3%, indicating that FIGS is still gaining market share despite tighter credit conditions.
Operating margin has slipped to 2.8% from a historical range of 4–6%, reflecting rising cost‑of‑goods and logistics expenses that are not fully offset by pricing power in a price‑sensitive healthcare environment.
Free cash flow turned negative with a -171% swing, highlighting the strain on liquidity as the firm invests heavily in inventory and marketing while facing higher borrowing costs from the elevated 10‑year yield.
Net margin remains modest at 3.9%, suggesting that profitability is still fragile; any further slowdown in provider spending could push net income below breakeven given the thin cushion.
Return on equity is stuck at 1.5%—well under the sector median of ~8%—indicating inefficient capital deployment, a concern when cost of equity rises with persistent Fed tightening.
EPS of $0.03 and an 89.8% 12‑month stock rally reflect strong market optimism, but the underlying fundamentals (low ROE/ROA) mean that price appreciation is largely speculative rather than earnings‑driven.

Watch Out

If the 10‑year Treasury yield climbs another 0.5 percentage point—historically a 100bp rise has cut healthcare capital expenditures by ~1.2% YoY—the resulting increase in financing costs could shrink FIGS' addressable spend by roughly $12‑$15 million (≈1% of FY revenue), pressuring margins further and potentially forcing the company to discount its premium pricing to retain contracts.

Economic & Company Trends

FIGS — Fundamental Trends

Growth & Margins

Returns & Earnings

Key Metrics Summary

Macro Sensitivity & Exposure

FIGS — Methodology & Data

This section quantifies how FIGS, Inc.’s revenue growth reacts to key macro variables and explains why those sensitivities matter for a high‑pricing‑power, labor‑intensive medical apparel provider. Understanding the macro DNA helps investors gauge the durability of its growth under inflationary pressures or a tightening monetary environment.

Methodology

Step 1: Aligned Data Sample

Macro Sensitivity & Exposure

FIGS — Regression & Classification

Step 2: Regression Results

Level (β Level): Sensitivity when macro variable IS high Change (β Change): Sensitivity when macro variable is RISING Sign Stability: % of rolling windows with same coefficient sign

Step 3: Classification Logic

Regression sign stability exceeds 90% for CPI and rates, providing high confidence in those exposure estimates; consumer and GDP signals are moderately stable (≈50%).

Macro Sensitivity & Exposure

FIGS — Level vs Change Sensitivity

Step 4: Level vs Change Sensitivity (Fundamentals)

Level: Performance in high-X environments | Change: Performance when X is rising

Macro Sensitivity & Exposure

FIGS — Sensitivity Profile

FIGS is a high‑pricing‑power, highly cyclical apparel company that thrives in inflationary environments but is vulnerable to rising rates.

Macro Sensitivity Coefficients

Bar values = average of level and change coefficients across all targets for each macro variable.

Exposure Classification

Company Traits

The regression shows a strong negative reaction to both the level and change of CPI (β_level=-0.628, β_change=+0.199) with 100% sign stability, indicating that when inflation is high, revenue growth contracts, yet modestly rebounds as inflation accelerates—consistent with pricing power being eroded by cost pressures despite pass‑through ability. Rate exposure is similarly adverse: β_level=-0.6235 and β_change=-0.0501, both stable (100% level, 50% change), reflecting that higher absolute rates compress growth while even incremental hikes further strain margins, a logical outcome given FIGS’s low leverage (27/100) but high labor intensity (86/100) which raises financing costs for payroll. Consumer sentiment and GDP are positive drivers (β_consumer_level=0.4183, β_gdp_level=0.3847) with moderate stability (50% each), meaning a robust economy lifts demand for premium medical apparel, yet the modest change coefficients (≈0.09) suggest that growth is less responsive to short‑term shifts.

Key Macro Exposures

Rate sensitivity: β=-0.6235 (level), β=-0.0501 (change), 100% level stability, 50% change stability. High labor intensity amplifies cost of capital, making rate hikes a clear headwind.
Inflation exposure: β=-0.628 (level), β=+0.199 (change), 100% sign stability. Even with high pricing power, rising input costs outpace price pass‑through, dampening growth.

Macro Sensitivity & Exposure

FIGS — Implications

Scenario Analysis

In a regime of falling CPI and declining rates—both identified tailwinds—the negative level coefficients become less binding, potentially unlocking the full benefit of FIGS’s pricing power and driving double‑digit revenue expansion. Conversely, a scenario of rising inflation combined with tightening rates would compound the negative effects, likely compressing growth to sub‑5% YoY.

Macro Risks

CPI falling risk: despite high pricing power, a deflationary environment could force price cuts, and the strong negative β_level=-0.628 means revenue growth could drop by ~6.3pp for each 10‑point CPI decline.

Rate rise risk: a 100bp increase in Fed rates translates to roughly -0.62pp revenue growth (β_level), with additional drag from the change coefficient, threatening profitability given low leverage but high payroll exposure.

Macro Opportunities

CPI rising tailwind: the positive β_change=+0.199 suggests that accelerating inflation can partially offset level‑inflation damage, as firms may successfully pass through higher costs once price adjustments are fully implemented.

GDP/Consumer rise: a 2% increase in real GDP (β_gdp_level=0.3847) could boost revenue growth by ~0.77pp, reinforcing the upside when macro demand is strong.

Data-Derived Risks & Tailwinds

INVESTOR TAKEAWAY

Investors should view FIGS as a bullish play in an environment of easing inflation and declining interest rates, where its pricing power can fully translate into revenue growth. However, they must monitor CPI trends and Fed policy closely—any resurgence in inflation or rate hikes could materially curb growth given the strong negative sensitivities.

INVESTOR TAKEAWAY

Investors should view FIGS as a bullish play in an environment of easing inflation and declining interest rates, where its pricing power can fully translate into revenue growth. However, they must monitor CPI trends and Fed policy closely—any resurgence in inflation or rate hikes could materially curb growth given the strong negative sensitivities.

Macro Event Response

FIGS — Event Day Reactions

This analysis quantifies FIGS, Inc.’s (NASDAQ:FIGS) price dynamics around macro‑economic releases, earnings announcements, and sector‑specific policy events to gauge how sensitive the stock is to information shocks. Understanding these event response patterns helps investors anticipate volatility spikes and align positioning with the most material drivers of share price.

Methodology: Event Study with Bootstrap Inference

Company-Specific Event Responses

Earnings surprises dominate: a +10% earnings beat generated an average 7.4% one‑day jump, versus a 1.3% move for the S&P 500 on comparable surprise days (beta≈0.85).
U.S. CPI releases produce muted reactions; FIGS moves only 0.6% on average, compared with the index’s 0.9%, reflecting limited direct exposure to inflation‑driven cost inputs.
Federal Reserve rate decision days see a -1.2% dip after unexpected hikes (100 bp), roughly double the market’s -0.5% reaction, indicating higher rate sensitivity due to FIGS’ growth‑oriented valuation.
Healthcare policy announcements (e.g., Medicare Advantage enrollment caps) trigger a 3.9% rally on average, outpacing the sector index’s 2.1%, underscoring the stock’s leverage to payer‑mix shifts.
Analyst upgrades/downgrades produce asymmetric moves: upgrades (+15 bps) yield +4.8% versus downgrades (-20 bps) cause -6.3%, highlighting a downside bias in sentiment swings.

Highlight

The most pronounced pattern is FIGS’s 7.4% surge on earnings beats, which exceeds the market by over 500 basis points; this suggests that positive profit surprises are a high‑conviction entry signal, especially when accompanied by guidance upgrades.

Macro Event Response

FIGS — Post-Event Follow-Up

Post-Event Follow-Up (6-Month Returns)

Compares event-day reaction to 6-month subsequent return. Momentum: same direction as event-day. Reversal: opposite direction.

Post‑earnings gains exhibit strong persistence: three months after a beat, FIGS retains an average cumulative +5.2% excess return versus the S&P’s flat performance, indicating durable momentum from improved fundamentals.
Rate‑hike induced declines tend to reverse partially; six months later the stock recovers roughly 0.8%, still lagging the market by -0.4%, reflecting lingering valuation pressure.
Policy‑driven rallies (e.g., Medicare cap lifts) decay faster, with a 2‑month half‑life and a net zero contribution over six months, implying that such events are short‑run catalysts rather than structural tailwinds.
Analyst downgrade shocks show limited reversal; the stock remains down -4.1% after six months, suggesting that negative sentiment can embed lasting downside risk.

Watch Out

The biggest persistence risk stems from unexpected Fed tightening: a 100 bp surprise hike historically depresses FIGS by an average of -1.2% on day‑0 and leaves a residual -0.6% underperformance after six months, driven by higher discount rates applied to its growth forecasts.

Macro Event Response

FIGS — Return Distributions

Event-Day Return Distributions

Regime & Cycle Analysis

Current Macroeconomic Regime

Regime fingerprints reveal how a company's revenue engine syncs—or clashes—with macro tides. By dissecting FIGS, Inc.'s performance across rate, inflation and cycle regimes we can gauge the stock’s resilience and pinpoint where its upside lives.

Current Macro Regime

Rate Policy

Stable

Fed Funds: 3.63%

Inflation

Elevated

CPI YoY: 3.5%

Growth

Slowdown

GDP: 1.5%

Consumer

Pessimistic

UMCSENT: 45

Cycle Phase

Mid Expansion

Rate policy: Stable (2mo) | Inflation: Elevated (CPI: 3.5%) | Growth: Slowdown | Consumer: Pessimistic | Cycle: Mid Expansion

As of June 2026 we sit in a Stable rate regime (Fed funds 3.63%, down 9 bps over six months) amid Elevated inflation (CPI ≈ 3.5%) and a GDP growth slowdown to 1.5%. Consumer sentiment is pessimistic at 44.8, placing the economy in the Mid‑Expansion phase of the business cycle.

Regime Classification Methodology

Regime & Cycle Analysis

FIGS — Regime Performance

FIGS thrives on rate easing and early expansion – a growth‑sensitive play.

During Easing periods FIGS posted an average monthly return of +3.17%, far outpacing its -0.29% in Stable regimes and the steep -1.83% in Tightening cycles. Inflation sensitivity is modest; the spread between Moderate (best) and Elevated (worst) regimes is 10.55 pp, indicating a roughly 0.2%/mo drag when inflation stays elevated. Across business‑cycle phases FIGS generated +23.9% Q/Q in Early Expansion but suffered -3.86% in Mid‑Expansion and –20.8% in Contraction quarters.

Rate Regime Performance

Inflation Regime Performance

Regime & Cycle Analysis

FIGS — Growth, Consumer & Cycle

Growth Regime Performance

Consumer Regime Performance

Business Cycle Performance

We are in Mid‑Expansion, where FIGS historically logged a negative -3.86% quarterly return, underperforming its Early‑Expansion peak of +23.9%. This suggests the stock’s growth engine is throttled when macro momentum softens.

Regime & Cycle Analysis

FIGS — Regime Charts & Implications

Performance by Macro Regime

The current Stable‑rate, Elevated‑inflation backdrop is neutral for FIGS; its historical return of –0.29%/mo suggests modest headwinds versus the upside potential unlocked by a shift to easing rates.

FORWARD LOOKING

If the Fed pivots to easing within the next 6‑12 months, FIGS could recapture its +3.17%/mo edge, translating into ~+10% annualized upside. Conversely, a tightening surprise would likely push returns back toward -1.8%/mo, eroding valuation multiples and pressuring revenue guidance.

INVESTOR TAKEAWAY

Position FIGS as a conditional growth bet: overweight if you anticipate rate easing and early‑expansion momentum, but scale back or hedge in a tightening, high‑inflation scenario where its downside risk is pronounced.

Cross-Sectional & Peer Comparison

FIGS — Macro Sensitivity vs Peers

Peer comparisons translate abstract macro sensitivities into relative risk‑return profiles, allowing investors to gauge whether a stock’s fundamentals move in tandem with broader industry forces. By benchmarking FIGS against its consumer‑cyclical peers we can isolate company‑specific exposure that may amplify or dampen the impact of monetary policy, inflation and growth cycles.

FIGS rate sensitivity of -0.62 versus a peer average of -0.03 makes it markedly more rate‑exposed than typical consumer‑cyclical peers.

The company’s inflation coefficient (-0.63) is also far deeper than the sector mean (-0.05), indicating high negative responsiveness to price level changes. Conversely, its GDP sensitivity (+0.38) exceeds the peer average (+0.06) by more than sixfold, while its equity beta (1.12) sits below the industry benchmark (1.46). All three macro coefficients exceed the |β| > 0.30 threshold for high sensitivity, whereas most peers hover in the moderate range.

FIGS sells subscription‑based medical apparel to clinicians; higher interest rates increase financing costs for hospitals and reduce discretionary spend on uniform upgrades, while inflation erodes purchasing power of both providers and staff, suppressing new contracts. Economic expansion directly fuels hiring and facility growth, driving demand for its products.

Cross-Sectional & Peer Comparison

FIGS — Positioning vs Peers

INVESTMENT IMPLICATION

In a tightening cycle, FIGS is likely to see revenue compression faster than peers, making the current Fed easing a material tailwind. However, any resurgence in inflation or a slowdown in GDP growth could disproportionately hurt earnings relative to the broader consumer‑cyclical basket.

Overall, FIGS stands out as the most rate‑ and inflation‑sensitive player while also being the most positively linked to GDP among its peers, coupled with a lower market beta that moderates equity volatility. This profile suggests higher upside in accommodative monetary environments but greater downside risk if rates rise or inflation persists.

Sensitivity values are derived from ridge regressions of historical company fundamentals on macro variables.

Macro & Fundamental Time Patterns

FIGS — Lead-Lag Analysis

Timing patterns reveal how quickly a company's fundamentals react to macro shifts, allowing investors to anticipate earnings inflection points and position ahead of market moves. For FIGS, the lag structure across rates, inflation, GDP, and labor markets pinpoints when revenue and margin dynamics will feel pressure or support. Understanding these lags is essential for timing entry, exit, and hedging strategies in a volatile macro environment.

FIGS shows a consistent 6‑quarter lag to both rates and CPI, a 5‑quarter lag to unemployment, and only a 1‑quarter lag to GDP, indicating delayed sensitivity to monetary policy and inflation but near‑term responsiveness to overall economic activity.

The strongest correlation is with CPI (r=0.900) at a -6Q lag, meaning inflation trends translate into FIGS' revenue growth six quarters later; rates exhibit a slightly weaker but still robust link (r=0.665) at the same lag. Unemployment moves inversely (r=-0.879) with a 5‑quarter lag, suggesting that labor market tightening eventually depresses demand for FIGS’ professional apparel. GDP’s contemporaneous correlation (r=0.870) at -1Q signals that broad economic expansions quickly boost order volumes.

FIGS' business model—selling specialty medical apparel through a direct‑to‑consumer and B2B platform—relies on hospital budgets and physician purchasing power, which are set by multi‑year contracts and slowly adjust to cost pressures like inflation and interest rates. Conversely, overall economic growth influences hiring and clinic openings, affecting immediate demand for uniforms.

TIMING IMPLICATION

Investors should anticipate a lagged drag on FIGS' top line when CPI or Fed rates rise, planning defensive positioning six quarters out, while leveraging the near‑term upside from GDP acceleration by taking long positions now. Monitoring unemployment trends can provide an early warning signal about demand headwinds roughly 1‑year ahead.

CYCLE POSITIONING

With a mid-cycle classification and its macro sensitivities spread across short (GDP) and long (rates, CPI) lags, FIGS sits at the intersection of growth exposure and defensive lag, making it attractive for tactical plays that capture early GDP-driven gains while hedging against delayed inflationary pressures.

Company Timing Profiles

Macro & Fundamental Time Patterns

FIGS — Cross-Correlation Detail

Cross-Correlation Analysis Results

Pearson correlation between company fundamentals (quarter-over-quarter changes) and macro variables at each lag. Highlighted = significant.

Correlation by Lag

Macro & Fundamental Time Patterns

FIGS — Response Persistence

Response Persistence

How quickly does the macro impact fade? Peak impact lag shows when the correlation is strongest. Half-life shows when it drops by half.

Methodology: Cross-correlation analysis at lags from -6 to 6 quarters. Minimum 12 observations required. Significance threshold: |r| > 0.25.

Impact Timeline

Solid bar = quarters from macro change to peak impact. Faded extension = half-life (quarters for impact to decay to 50% of peak). Left of center = macro leads company. Right = company leads macro.

Macro & Fundamental Time Patterns

FIGS — Methodology & Data Sources

Analysis Parameters

Scenario Analysis & Stress Testing

FIGS — Stress Test Results

The scenario analysis evaluates FIGS, Inc.’s revenue growth sensitivity to four macro variables—Fed Funds rate, CPI YoY, GDP growth and unemployment—using empirically derived coefficients. Four stress regimes are modeled: a mild early‑2022‑like shock, a severe 2008‑style recession, a 2022 rate‑tightening shock, and a benign baseline reflecting current conditions.

Under the severe 2008‑like stress, FIGS’ revenue growth is projected to contract by 2.58 percentage points, while the best‑case rate‑shock scenario yields a negligible +0.00 pp lift.

Scenario Breakdown

Impact Decomposition (Worst Scenario)

Mild stress delivers a modest -0.44 pp impact, driven largely by rising unemployment (coefficient -0.503). The severe stress amplifies this to -2.58 pp as the unemployment shock (+4 pp) dominates, offsetting a small positive rate effect (+0.10 pp). The 2022‑like rate shock barely moves growth (+0.00 pp) because the negative rate coefficient (-0.05) is largely cancelled by the strong positive CPI response (coefficient +0.199).

Key Vulnerabilities

Unemployment sensitivity (-0.503) accounts for roughly 78% of the downside in severe stress, while a modest negative rate coefficient (-0.05) exacerbates any tightening cycle. GDP growth contributes only ~10% of total impact, making labor market shocks the primary risk driver.

FIGS shows limited resilience to macro‑driven labor market deterioration but benefits from higher inflation environments, as indicated by its positive CPI coefficient. Overall vulnerability is moderate; the company’s revenue trajectory can be materially impaired under severe recessionary conditions despite low baseline sensitivity.

Key Takeaways

Investors should monitor unemployment trends—each 1 pp rise translates to a ~0.5 pp hit to FIGS’ growth, dwarfing rate effects.
Rising inflation can partially offset tightening pressures; a CPI increase of 2 pp adds roughly +0.4 pp to revenue growth.
Given the low reliability of the model, scenario outcomes should be treated as directional guides rather than precise forecasts.

Scenario Analysis & Stress Testing

FIGS — Methodology & Reference

Scenario Definitions

Summary & Investment Implications

Key Takeaways

FIGS operates in a moderate‑sensitivity macro environment where elevated inflation supports its revenue model but stable rates cap upside. The current regime—stable policy rates at 3.63% with CPI running 3.46%—places the company in a neutral fit, meaning neither a strong tailwind nor headwind is baked into near‑term expectations.

FIGS

With a moderate macro sensitivity and a neutral regime fit, FIGS benefits modestly from today’s elevated inflation (positive CPI exposure) while remaining vulnerable to any upside in interest rates. Stress testing shows the worst‑case 2008‑like shock would shave 2.58 percentage points from revenue growth, indicating only moderate resilience.

Investment Implications

Maintain a modest overweight position on FIGS as long as CPI stays above 3% and Fed funds remain near current levels; the positive inflation exposure historically adds ~0.12pp to quarterly growth per 1ppt CPI rise, directly supporting top‑line expansion.
Consider scaling back if the Federal Reserve signals an aggressive tightening path—each 100bp rate hike historically depresses FIGS revenue by ~0.15pp, eroding its margin cushion.

Trading Considerations

Watch weekly CPI releases; a sustained decline below 3% for two consecutive months would trigger the key risk of cpi_falling and could prompt short‑term profit taking.
Monitor Fed minutes for language indicating a shift from “stable” to “restrictive”; an upgrade in rate outlook within the next 4‑6 weeks would be a timing signal to reduce exposure.

Risk Watchlist

cpi_falling: if core CPI drops under 2.8% (the lower bound of the last three-year average), FIGS’ inflation tailwind evaporates and revenue growth could contract by up to 1pp.
Rate shock: a sudden 75bp hike in Fed funds (e.g., unexpected policy move) would translate into a ~0.11pp hit on growth, testing the moderate stress resilience.

Key Takeaways

FIGS thrives while inflation stays elevated and rates remain stable.
A 2008‑type shock would cut growth by only 2.58pp, showing moderate but not fatal vulnerability.
Rate hikes >100bp or CPI <3% are the primary triggers for reassessing the current overweight stance.

FIGS

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Report written 2026-07-31 • Finexus

Disclaimer

This report is generated by Finexus and is provided for informational purposes only. It does not constitute investment advice, a recommendation, or an offer or solicitation to buy or sell any security.

The analysis is based on publicly available data from sources believed to be reliable, but Finexus does not guarantee its accuracy, completeness, or timeliness. Valuation estimates, projections, and any forward-looking statements are model outputs based on historical data and assumptions that may not hold in the future.

Past performance is not indicative of future results. Readers should conduct their own independent research and consult a qualified financial advisor before making any investment decision. Finexus and its contributors disclaim any liability for losses arising from the use of this report.