Real Vision managing editor Ed Harrison sits down with Darius Dale, founder and CEO of 42 Macro, to lay out his investment framework for markets and provide a strategic update on his macro outlook for this year. He introduces his GRID regime framework, which measures, tracks, and contextualizes the rate of change in key macro variables across time and geographies to evaluate their impact on a wide array of asset classes. Using this model, he offers his insights into the trajectory of economic growth and inflation and how this will shape policymaking and markets over the coming months. Dale also shares how to apply this model for portfolio construction. Follow Darius on Twitter @42macroDDale and @42macro. Filmed on May 28, 2021.
For the next three to six months, Dale discusses how investors who are positioned for reflation may not need to change their allocations much at all as markets are currently signaling that there is more room to run. In the back half of the year, he suggests that those who want to incrementally position themselves for a transition to a more deflationary regime should invest in more defensive stocks such as healthcare, real estate, consumer staples, and utilities as well as bonds, gold, and the dollar. Over a three to five year time horizon, Dale sees the dollar falling drastically as a new era of fiscal policymaking begins.
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