Macro Minute: Week of June 1, 2026
When I look through my email inbox every day, I see lots of smart people saying lots of different things. Most of these people get paid to sell a product or service, in other words, they are incentivized to say something and have an opinion at all times. In my observation this leads to bad behavioral outcomes for investors. If you are constantly hearing smart people articulate an informed market perspective, it creates the urge within yourself to do something with your investment portfolio. Let me dig in to how I attempt to filter out the noise.
The first thing I focus on is time horizon. My preferred holding period for an investment and the portfolio as a whole is infinity. This is why I try to extract the only free lunch in markets, beta. I have written about beta before here. While I would like to hold something forever, the world is ever changing so we must be aware of how those changes can impact our investments. With that in mind, I attempt to identify medium to long-term trends to tilt the portfolio into. One example is the rising interest rate environment since 2022. I won’t bore you as to why we are experiencing rising rates, but I will note that in this type of environment stocks and bonds tend to move directionally similar. Why this is important to a portfolio is because it means that when your stocks go down so do your bonds. You want a part of your portfolio to offset equity losses and bonds do a poor job of that in a rising rate environment. This trend is why I have tended to hold more real assets and managed future/trend assets in portfolios. In summary of time horizon, we must focus on our own race and time horizon. In my opinion, the longer an investor sets his or her time frame, the clearer the picture and the better the results.
The other filter I try to apply is observing the price action of the market. I follow the price actions of global equity markets, commodities, global bond yields, and currencies. A general understanding of these global markets allows me to interpret the daily deluge of information. This allows me to quickly agree with or disregard the information. For example, the South Korean stock index, the Kospi, has exploded over the last year. There are several reasons for this. If I get bombarded with information saying that you should only focus on U.S. markets, I know that does not fit my framework or observation of global price action.
The result of these filters allows me to form my own picture of what is happening and invest in trends that fit my preferred time horizon. I like to always own beta (market returns) and stay macro (globally, high level) aware. I find this allows me to harvest what the market gives while not being exposed to too much risk. I hope this gives a little insight into my process.
DISCLOSURES:
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