You will build a one-page macro dashboard and write three scenarios that link it to your holdings.
By now you have a way to read each piece of macro data on its own. The risk is that you end up with eight browser tabs, a head full of opinions and no record of what you thought last month. Professional investors solve this with a short dashboard they update on a schedule and a set of written scenarios they revisit. This exercise builds both for your workbook, on one page.
Allow about forty minutes for the first version and ten minutes a month to keep it current.
Pick indicators that cover the ground from this module, one or two per area. More than eight and you'll stop updating it. Marcus chose these:
Singapore GDP growth, US core PCE inflation, MAS core inflation, the federal funds rate, the US ten-year minus two-year spread, the US ten-year TIPS yield, the Fed's broad dollar index and the ICE BofA US high-yield spread
He keeps the MAS policy stance in a notes line under the table, since it changes only when MAS publishes a statement.
For every indicator, add a row with four fields: the source, the latest value, the direction over the past three to six months, and the date you checked. Sources should be official where possible: the Ministry of Trade and Industry and the Department of Statistics for Singapore data, MAS for its policy statements and SGS yields, the US Bureau of Economic Analysis and Bureau of Labor Statistics for US data, the Federal Reserve for the funds rate and dollar index, and FRED for the series that are hard to find elsewhere.
The direction field matters more than the value, because regimes are about change, as lesson 3.1, Growth and inflation: four regimes and what tends to do well in each, explained. Stick to three labels, rising, falling and flat, so months can be compared at a glance.
The date field stops you trusting stale data, since a GDP figure arrives quarterly and gets revised while a spread changes every day. When you update, change the date even if the value didn't move.
Under the dashboard, write three scenarios for the next twelve to eighteen months. Each needs four parts: a name, what the indicators would show, a rough likelihood, and the holdings it would help or hurt most.
The likelihoods are your own rough weights, and they should add up to 100%. They aren't forecasts and nobody is grading them. Their job is to make you consider more than one future at once.
Here are Marcus's, written against his dashboard on the day he built it, with likelihoods that are his own judgment.
Gentle slowdown, 50%. Growth eases, inflation keeps falling, the Fed and MAS loosen gradually, spreads stay calm. His SGD bond fund and S-REIT would benefit from lower yields. His shares would probably be flat to modestly positive.
Recession, 30%. Unemployment rises, spreads widen sharply, the curve steepens as rate cuts are priced. His chip stocks, bank shares and STI ETF would be hurt most. His bond fund and T-bills would help, and a stronger US dollar would soften the fall in his US holdings in SGD, as lesson 3.5 showed.
Inflation returns, 20%. Core inflation turns back up, real yields rise, central banks hold or tighten. His bond fund and REIT would suffer through duration, and his chip designer through the discount rate effect in lesson 3.3, Real rates and breakeven inflation from inflation-linked bonds. Only his T-bills would hold up well.
Notice that the scenarios do the same work as the risk premia in lesson 2.7: each one names the conditions in which a part of the portfolio fails.
The last line on the page is the most important one. Write down what would make you change your portfolio, so that headlines alone don't.
Marcus wrote: "The dashboard can trigger a review, never a trade. I review my allocation when three or more indicators move against my base case in the same month, or at my yearly review. Any change must follow the rules in my investment policy statement."
That rule connects this module to the written policy from Build and run an ETF portfolio, module 8, Write your investment policy and review it every year. The macro work informs your scenarios. Your policy decides what you do.
Marcus's finished page holds eight indicators with their four fields, three named scenarios whose likelihoods add up to 100% with the holdings each would hit, and his one rule at the bottom, all on a single screen. If your version spills past one screen, cut indicators until it fits, starting with any you haven't looked at in the last month. Then fill in the latest values from the sources you listed, dated today.
Build the macro tab with your indicators and sources, write three scenarios and mark which of your holdings each one would hurt most.
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