October 08, 2022

All investors face capital-market risk. Managing that risk, evaluating opportunities in the context of their goals, and assessing specific investments efficiently requires broad, objective, close-to-the-capital-market thinking. A global allocation framework does not need to be a black box that processes statistical variables and then spits out an investment plan. It should be a logical framework that lays out choices for investors. The LJE process strives to accomplish these objectives. It summarizes in a logical and consistent way the investment choices recommended by our assessment of the coming economic environment. Our process estimates the probabilities of the individual countries outperforming the world benchmark. The Year-to-Date Performance of the global capitalization weighted tilt strategy is lagging the benchmark by 2 basis points. The remaining two strategies are adding value relative to their benchmarks. The global buy strategy with a 24.16% decline outperformed the 25.98% decline posted by the global benchmark. In turn, the sell strategy with a 29.39% under-performed the benchmark as expected. The international strategy fared better. The tilt and buy portfolios with a 26.43 and 22.99% decline outperformed the 26.48% decline posted by the benchmark. The global sell portfolio with a 29.35% loss, under-performed the benchmark as expected.

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