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the Forecast global macro strategy & process

Our Global Macro Process

How do we thrive in today's markets?

Welcome to Forecast Capital Management, where our approach to investment management sets us apart from the norm. Unlike traditional financial advisory firms or investment houses, we operate on a different wavelength. While many firms offer investment models tailored to your risk tolerance, we believe these models often fall short. They may rely on single factors without adequately considering the risks inherent in each component. This became evident during turbulent periods like the 4th Quarter of 2018 and the 2nd Quarter of 2020 when supposedly "diversified portfolios" faced unexpected levels of risk.

At Forecast Capital Management, we recognize the need to evolve and adapt, much like humans do. We understand that survival and success hinge on our ability to adjust to our environment. Our investment process has organically evolved to suit the changing investment landscape, unlike rigid single-factor models. We acknowledge the cards we're dealt and base our decisions on probabilities and data rather than gut feelings. As risk managers, we embrace change rather than resist it because, ultimately, our goal is not to be right but to generate returns.

Our approach to Global Macro Risk Management integrates historical analysis, mathematical modeling, and insights from behavioral psychology. While conventional firms, including those on Wall Street, may rely on economic theories, sentiment, and a "This time is different" mindset, we adhere strictly to mathematical principles. We believe that if we can't quantify it, we can't confidently invest in it. Our decisions are rooted in facts, not feelings.

At Forecast Capital Management, we offer investors the opportunity to entrust their hard-earned assets to a firm equipped with modern risk management tools. We've democratized access to hedge fund strategies that were once exclusive to the ultra-high-net-worth individuals and families. Using our risk management tools, we aim to make well-informed investment decisions ahead of major market shifts. While nothing is guaranteed, our objective is to tilt the odds in your favor, delivering consistent gains, compounding returns, and safeguarding your capital.

Our Risk Management Process

Our Global Macro Strategy is a multi-factor, multi-durational risk management process designed to foster capital growth while mitigating downside risk. We take a comprehensive approach to investing, considering all stages of the economic cycle. Central to our investment philosophy is our Economic Dynamics Model, which analyzes and tracks the rate of change for economic growth and inflation across 50 different countries. By examining year-over-year changes, we gain insights into whether growth and inflation are accelerating or decelerating. This forms the basis of our fundamental outlook, enabling us to anticipate the prevailing economic environment.

Using the insights from our analysis, we then identify the asset classes and factor exposures that are poised to perform well in the forecasted economic conditions. Our investment ideas are typically executed through ETFs or individual equities. Each investment thesis is rigorously back-tested to ensure alignment with our objective of achieving optimal returns.

The culmination of our efforts is a dynamic, high-performance investment approach that integrates insights from diverse fields such as Global Macro, Retail, Energy, Healthcare, and Washington Policy.

While fundamental analysis plays a crucial role in our process, it represents just one facet of our comprehensive strategy. Our approach is bolstered by a sophisticated multi-factor, multi-durational model, which guides our decisions on when to buy or sell specific securities. This quantitative model is designed to anticipate market movements, effectively staying ahead of the curve. It evaluates the price, volume, and volatility of publicly traded securities, analyzing their interplay across immediate, intermediate, and long-term timeframes. For an investment opportunity to be pursued, it must align with both our quantitative model and our Economic Dynamics Model.

In today's increasingly volatile markets, the primary objective of any investor should be effective risk management and capital preservation, balanced with the pursuit of positive returns during opportune market conditions. For those interested in accessing our Fact Sheet, please reach out to us at info@forecastcapitalmanagement.com.

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