Asset Allocation | Portfolio Updates
Asset Allocation Update: The ‘Everything Breaks’ Portfolio
- By Bilal Hafeez
- 3 min read
When markets go through regime changes, you need to throw out the conventional ways of investing. Take a common approach – business cycle investing. Here, investors split the cycle into four sections or quads – early cycle, mid, late, recession – then look at past relationships to pick the best assets for each.
Currently, most such investors say we are in the fourth quad (recession) and recommend being long bonds, long gold, short (other) commodities, and short equities. Yet only the short equities has worked this year. The rest have failed: bonds are down 13%, gold is down 7%, and commodities are up 25%. Some even added real estate (REITS) to mitigate against inflation, yet REITs are down 25% this year.
This article is only available to Macro Hive subscribers. Sign-up to receive world-class macro analysis with a daily curated newsletter, podcast, original content from award-winning researchers, cross market strategy, equity insights, trade ideas, crypto flow frameworks, academic paper summaries, explanation and analysis of market-moving events, community investor chat room, and more.