Real Asset Allocation
To succeed in the future, investors must expand their asset menu AND modernize their allocation framework.
- Two-step process: Proprietary trend ranking + ML-based optimization.
- Scale into and out of positions.
- Built-in stop loss parameters to protect downside.
- Stay diversified while overweighting the strongest assets.
S&P 500 Drawdown Risk
As risk managers, we focus on downside protection.
- Dozens of indicators synthesized to predict the risk of an +10% drawdown in the next month.
- Four broad categories represented: Macro, Vol, Technicals, and Valuations.
- Probabilistic approach: “Risk” is not binary.
- Machine learning based predictions.
As the rally matures, the importance of sector selection rises.
- Sector selection based on Trend, Flows, and Tactical ML.
- Precise weights rebalanced monthly and benchmarked to the S&P 500.
- Internal scorecard updated monthly.
- Sector Scorecard x-rays the model and reveals internal drivers.
Top 20 stocks selected every month based on a proprietary blend of Quality and Trend factors.
- Top 20 stocks from the S&P 500.
- New stocks added each month with turnover controls.
- Quality forms the system's base.
- Emphasis on finding the stocks that can outperform across the entire economic cycle.
Core Real Asset Models
- Core Models covering Crude Oil, Gold, and Bitcoin.
- Each model updated daily with component weightings.
- Market expertise helps us select the correct indicators.
- ML process allows us to combine and weight appropriately.
Prior to founding 3Fourteen Research, Warren led Ned Davis Research’s Energy and Commodity strategy. In that role, he built the firm’s commodity-related studies, models, and unique indicators. His research combines proprietary fundamental, technical and macro indicators to identify major investment themes and market trends affecting capital markets.