Stock-picking happens against a backdrop. The very same company that's worth a 10 % position in a calm bull market may only be worth 6 % when volatility is spiking and the index is below its trend. After scoring every name on its own merits, we apply a single market-wide adjustment to all of them at once. In a benign environment, exposures stay near their full target. In a stressed environment, every position gets trimmed in proportion and the spare capital is held as cash. This isn't a veto on any individual name — it's a tilt that gets gentler or more defensive depending on conditions. The signals that drive this dial are the broad direction of the S&P 500, the level of the VIX, the shape of the Treasury yield curve, and the trend in the US dollar.
At a glance
| What we watch | S&P 500 trend, VIX, yield-curve shape, US dollar trend |
|---|
From today’s portfolio
The market backdrop right now reads as Risk-on, leaving exposure at full size.
| S&P 500 vs. its 200-day average | 1 |
|---|---|
| VIX (market fear gauge) | 14.870 |
| Volatility regime | low |
| 10-year minus 3-month Treasury yield | 1.114 |
| Dollar strength (z-score) | 1.561 |