Individual investors and advisors we work with are often curious as to our exact process with regards to portfolio construction. I thought it might be helpful to create an article going over everything.
1. Top-Down, Data-Driven Macro Regime Framework
At the heart of our work is a quantitative, regime-based model designed to identify the prevailing macro environment. The model focuses on the rate of change in three key factors:
- Growth
- Inflation
- Liquidity (Monetary & Fiscal Policy)
Dale uses nowcasting and forecasting techniques to determine whether each of these variables is accelerating or decelerating over time. This combination forms what we call the Macro Regime—a guide to which assets are likely to outperform.
There are four core regimes:
| Growth | Inflation | Regime Name | Risk Bias |
| ↑ | ↑ | Inflation | Pro-commodity, short duration |
| ↑ | ↓ | Goldilocks | Pro-risk, bullish equities |
| ↓ | ↑ | Stagflation | Defensive, overweight commodities |
| ↓ | ↓ | Deflation | Bonds, USD, defensive equities |
2. Growth, Inflation, and Policy Dynamics
We then monitor the interaction of Growth, Inflation, and Policy. Each element is studied using leading indicators and high-frequency data to identify inflection points early.
- Growth: Industrial production, retail sales, labor markets, etc.
- Inflation: CPI, PPI, commodity prices, breakevens, etc.
- Policy: Fed balance sheet, interest rates, fiscal stimulus, etc.
We then apply this regime diagnosis to asset allocation across equities, fixed income, commodities, and currencies.
3. Portfolio Construction: Probabilistic Risk Management
Rather than making binary bets, we assign probabilities to each macro regime and tilt portfolios accordingly. This helps manage drawdowns while maintaining upside participation. Core elements of our portfolio construction include:
- Conviction-weighted exposures across asset classes
- Cross-asset relative strength analysis
- Dynamic rebalancing as macro conditions shift
The result is a risk-aware, macro-tactical strategy that adapts in real time to the market environment.
4. Leading Indicators and Market Signals
We track a dashboard of over 50 economic and market-based indicators, including:
- ISM surveys, PMIs, and leading economic indices
- Yield curve metrics (e.g., 2s/10s, OIS forwards)
- Cross-asset correlations
- Real-time inflation expectations
These help validate (or challenge) the dominant macro regime and allow for refinement of risk positioning.
5. Transparency & Education
A standout aspect of Armor Wealth is our commitment to transparency. Our models and views are shared regularly through posts, articles, and interviews with various media outlets. Our goal isn’t just to inform investors—it’s to educate them on how macro works and empower better decision-making.
Whether you’re managing institutional capital or your own portfolio, Armor Wealth’s framework provides a powerful lens to interpret the ever-changing investment landscape.
Be More Confident About Retirement
No retiree stops needing income. And no retiree can know in advance which financial risks may threaten their standard-of-living.
Don't confront retirement without a plan for monthly income.
Jim Tassoni, founder of Armor Wealth Strategies, brings over two decades of financial expertise to guide clients towards clarity and certainty in their financial lives. Driven by his own life-changing experiences with a rare genetic condition, Jim is dedicated to helping others not only secure their financial future but also enjoy the life they have.
Reach out to Jim for a custom plan tailored to make the most of your financial and personal aspirations.
