A systematic investment framework built on economic regime identification. Understand the process, the research behind it, and how it translates to portfolio positioning.
No investment strategy guarantees profits or protection from loss.
Economic environments shift — and portfolio positioning should reflect those shifts. Caldric's framework uses measurable indicators to identify the current regime and adjust exposure accordingly, through a repeatable, rules-based process.
The result is disciplined exposure management that responds to conditions as they change, tracking measurable macro signals in near-real time.
Regime-aware positioning
Exposure responds dynamically to the current regime identified by measurable macro data.
Broad asset class diversification
Risk is distributed across equities, fixed income, commodities, and cash based on regime signals.
Defined decision framework
Every adjustment follows a documented, systematic process with predefined signal thresholds.
The economy cycles through four distinct environments based on growth direction and inflation direction. Each regime favors different asset classes — and your portfolio should reflect that.
Goldilocks
Growth Up / Inflation Down
Reflation
Growth Up / Inflation Up
Deflation
Growth Down / Inflation Down
Stagflation
Growth Down / Inflation Up
Drawing on the literature
The framework draws on academic literature in regime allocation, trend-following, and volatility-aware risk management. The implementation challenge is translating that research into client-appropriate, rules-based portfolios.
A written process starts with the Portfolio Design Record, then aligns positioning with current economic conditions through regime identification, target allocation, signal validation, and systematic execution.
Client facts are reduced into a focused design record before market evidence changes portfolio exposure. Objectives, liquidity needs, withdrawal pressure, account type, tax sensitivity, risk willingness, risk capacity, risk composure, and implementation limits set the client-specific operating lane.
The portfolio lane comes before the regime view, so market evidence works inside documented client constraints.
High-frequency economic data identifies which of four regimes the economy is in. Growth direction and inflation direction combine to determine the current environment. This top-down view informs current exposure within the portfolio lane appropriate for the client.
Understanding current conditions is the foundation of systematic positioning.
Each regime can favor different asset classes. Allocation targets shift from a disciplined reference allocation toward the reward-for-risk profile supported by the current environment and client constraints.
The framework draws on academic literature in regime allocation, trend-following, and volatility-aware risk management.
Quantitative filters confirm that identified trends are persistent and actionable. Position sizing follows signal strength and market volatility — stronger signals warrant fuller positioning, while high volatility means more conservative scaling.
Bottom-up signal validation helps ensure that macro views and market behavior align before positioning changes.
When risk-reducing signals change, accounts are reviewed and repositioned promptly where operationally feasible. Risk-adding changes are implemented systematically and may be staged.
Quarterly drift and suitability reviews continue even when no signal change requires a trade.
Clarity about our approach helps you decide if this is right for you. Understanding behavioral biases in investing is part of that clarity. The companion page on limitations of a systematic process explains the tradeoffs a rules-based process cannot remove.
Systematic positioning is about aligning portfolio risk to the economic environment as it actually is. The Portfolio Design Record connects the framework to the facts that affect how your portfolio should be managed.
How much systematic adjustment your portfolio can absorb, given the household context and objectives. Positioning is calibrated to the framework your portfolio is built around.
Matching portfolio design to actual withdrawal needs so distributions don't force liquidation at unfavorable points in the regime cycle. Household cash flow shapes how the framework is applied.
Known near-term cash needs, expected withdrawals, and available liquidity are reviewed so the portfolio is not forced to fund spending at unfavorable points in the regime cycle.
Periodic review of whether the framework still matches the household's objectives, risk tolerance, liquidity needs, and account structure. Drift gets addressed before the portfolio and the facts diverge.
Each portfolio follows the same regime-based framework. What differs is how aggressively we respond to it — calibrated to your situation.
Low Volatility Tactical Allocation
For investors whose portfolio priority is lower peak-to-trough drawdowns and who can accept more defensive positioning during uncertain regimes.
Moderate Volatility Tactical Allocation
For investors who want systematic tactical allocation applied across a balanced risk budget, accepting the normal range of regime-driven positioning changes.
High Volatility Tactical Allocation
For investors with the volatility tolerance for a more aggressive systematic allocation, accepting larger drawdowns during adverse regimes in exchange for higher exposure to growth assets during favorable regimes.
Caldric's methodology language is grounded in published research on regime-aware investing, trend following, and systematic allocation.
Alex Shahidi
Frames growth and inflation as the two macro dimensions that define regime-aware allocation work.
Hurst, Ooi, Pedersen
Documents the long-horizon evidence base for systematic trend-following across markets.
Kritzman, Page, Turkington
Supports the case for dynamic strategies that respond to changing market regimes.
Antti Ilmanen
Supports a disciplined, systematic approach over ad hoc discretionary investing.
