How we invest · Global Macro Strategy
Read the economy first. Then build the portfolio.
Our in-house Global Macro Strategy starts with two questions: is economic growth speeding up or slowing down, and is inflation rising or falling?
Before anything is bought, a quantitative check of the market has to agree. The strategy runs as a standalone portfolio of roughly 20 to 30 stocks and ETFs, and it’s built into our MPD and MPD+ models.
The framework
Two measurements. Four regimes.
We track which way growth and inflation are moving, not just where they sit. Together they place the economy in one of four regimes, and each one sets how much stock-market risk the portfolio is designed to take.
The sweet spot
Growth speeding up while inflation cools.
Example tiltsTech, consumer discretionary, high-yield bonds
Running hot
Growth and inflation both rising.
Example tiltsEnergy, industrials, TIPS
The squeeze
Growth slowing while inflation rises.
Example tiltsUtilities, REITs, munis
The slowdown
Growth and inflation both falling.
Example tiltsConsumer staples, healthcare, government bonds
The Quad framework and the Economic Dynamics Model are FCM’s own. Target beta is how much the portfolio is designed to move with the stock market.
The process
How an idea becomes a position.
Every position has to clear two independent checks: one about the economy, one about the market’s own behavior.
- 01
Read the regime
Our Economic Dynamics Model tracks the rate of change in growth and inflation across roughly 50 countries, then maps the regime to the sectors and asset classes that have tended to fit it.
- 02
Confirm with the market
A separate quantitative model checks price, volume, and volatility over short, intermediate, and long timeframes. Both gates have to agree.
- 03
Size and hedge
Positions are sized for conviction, volatility, and fit. Inverse ETFs may be used as short-term hedges, typically held for less than a week.
- 04
Sell by rule
If the regime shifts or the market stops confirming, the position is trimmed or sold by rule, not by feel.
If the regime shifts or the market stops confirming, the position is trimmed or sold by rule, not by feel.
04 · Sell by rule
Built-in discipline
What keeps the process disciplined.
Our priority is managing risk while pursuing growth when conditions support it. Discipline is built into every step, so the process holds up when markets get loud.
Written rules
Every decision follows rules set in advance: what qualifies, how much to own, and when to sell. Headlines don’t change the process.
Two independent checks
Nothing is bought until the regime fit and the market’s own price, volume, and volatility agree.
Active risk management
Positions are sized for conviction and volatility, and short-term hedges are put in place when risk rises.
Adjusts with the regime
As growth and inflation change direction, positioning and target beta move with them. Sell rules are applied without emotion.
Worth knowing
Mixed environments
The economy may straddle two regimes or switch between them.
Timing
No strategy can perfectly time buying the bottom and selling the top. We aim to capture the meat of the move.
Building positions
We build positions over time rather than buying a full position at once, so the strategy trades more frequently than passive strategies.
How it fits
One framework, two ways to use it.
- As a standalone portfolioRoughly 20 to 30 stocks and ETFs that clear both gates, with equity risk set by the target-beta dial.
- Inside MPD and MPD+A Global Macro sleeve of commodities, precious metals, currencies, digital assets within caps, and hedges, sized with a regime-by-signal discipline grid. It’s used in every risk band of both tracks: MPD+ for accounts of $150,000 and above, MPD for $25,000 to $150,000.
Straight answers
Is it its own portfolio, or part of MPD?
Both. You can hold Global Macro as a standalone portfolio, or as a sleeve inside MPD or MPD+. We help you choose based on your goals, account size, and the rest of your plan. Client accounts are custodied at Charles Schwab.
Do you predict the market?
No. We measure which way growth and inflation are moving and position for the environment the data describes. When the data changes, the portfolio responds by rule.
Can I see how it has performed?
A strategy fact sheet is available on request. Ask for it on your fit call, or mention it when you book one. Any performance we share includes the time period, net-of-fee results, and a relevant benchmark.
Is it right for me?
It depends on your goals, your timeline, and how much of your wealth already rides on the economy through your business or company stock. If it looks like a fit, you complete a personal profile and a risk questionnaire, then we talk through portfolio construction together.
Keep up with the framework:The Forecast ReportThe Friday 5
Next step
Curious how your portfolio is positioned for the economy we’re in?
A 20-minute call is the easiest place to start. A member of our team replies within one business day.
Prefer to talk now? Call 720-432-1435
Forecast Capital Management LLC is an investment adviser registered with the State of Colorado. Registration does not imply a certain level of skill or training. FCM may transact business only in states where it is registered or exempt from registration, and maintains offices in Castle Rock, Colorado, and a branch office in Florida.
Content on this page is for educational purposes only and is not individualized investment advice. Investing involves risk, including possible loss of principal. Past performance does not guarantee future results. No strategy assures a profit or protects against loss. The regimes, example tilts, target-beta settings, and position counts shown describe the general design of the strategy, not current holdings or recommendations; actual portfolios vary. Inverse ETFs are intended for short-term use. For fees, risks, and conflicts of interest, see our Form ADV Part 2A.