Macro Minute: Week of January 26, 2026
What am I paying attention to in markets?
I am watching a vicious bull market running in precious metals and possibly spilling into all commodities.There’s a continuation of trends from last year with international markets outperforming U.S., global growth accelerating, and real assets showing its benefits within a diversified portfolio. I am also watching continued volatility driven by government actions. When I take the sum of all these actions, I conclude that weaker dollar, strong international markets, and national hording of resources should continue.
What do these observations mean to my portfolio process that I laid out last week?
In broad strokes, not much. Remember that I stay diversified, but I am sinning a little at the moment. In equities, I am a little more than 50/50 international over U.S. primarily because international has grown faster, but equity exposure overall is normal. Out of the remaining asset classes (bonds, real assets, and managed futures/trend), I prefer real assets and managed futures/trend over bonds. This is because with the current penchant to run the economy hot, the risk is that inflation could run higher too.
What are the risks to the current trends?
The one risk that I am watching the closest is a strong dollar. If the dollar strengthens considerably, it will be a hinderance for these trends to continue. Another risk is a weakening of the economy. This could be for a multitude of reasons. Geopolitical risk could change these trends somewhat, but most likely that risk would just add volatility, not change, the direction of trends.
What is my advice to individuals during a time of elevated volatility?
Stay the course. Have a long-term strategy that provides diversification and a margin of safety. When volatility is elevated, it provides opportunities as much as it creates risks. Avoid leverage. Don’t take on more risk than you are willing to tolerate. Above all, take the long view.
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