The concept of Macro Indicators is to enable adjustments in portfolio allocation based on the prevailing economic and monetary environment. For instance, increasing holdings in riskier assets, such as equities, during favorable conditions. Conversely, increasing allocation to safer investments like cash, treasuries, and gold, when conditions deteriorate. While this approach may not completely eliminate drawdowns, it can improve the overall risk-return profile of the portfolio.
Please note that this is not financial advice and be sure to read our disclaimer. For additional research materials, visit our articles section.
Evaluates economic and monetary conditions, short-term liquidity, and various risk factors. Slowly changing macroeconomic factors are supplemented with the faster capital flow, credit availability, yield curve analysis and other indicators
Analyzes trends in significant economic data, which includes the ones used by the National Bureau of Economic Research to identify recessions. This indicator is based on scientific principle and changes at a slower pace
Values above zero suggest a dominantly positive market dynamic and may indicate an opportunity for allocation towards riskier assets, such as equities. Conversely, values below zero may suggest a portfolio could benefit from staying out of the market or being invested in the defensive asset classes