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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"US markets rallied post-election while international equities fell on tariff fears. Despite potential inflation risks from new policy proposals, a strong US economy supports a constructive outlook managed via hedging protocols."
The Stonehearth Capital Management Q4 2024 commentary, authored by Jamie Upson, reviews a volatile quarter marked by distinct market phases. Before the US election, markets drifted aimlessly, but surged following Donald Trump's victory. However, international and emerging markets experienced significant declines due to the anticipated impact of tariffs and decreased exports. In December, the Federal Reserve surprised investors by projecting fewer rate cuts for 2025, leading to a downbeat end to the year without a traditional holiday rally. Key assets discussed include the SPDR S&P 500 ETF (SPY), Vanguard FTSE Developed Markets ETF (VEA), Vanguard FTSE Emerging Markets ETF (VWO), and iShares Growth Allocation ETF (AOR). Looking forward, concerns exist that policies such as mass deportations and tariffs could reignite inflation, potentially prompting the Fed to resume rate hikes instead of the currently projected two cuts (down from four). Nevertheless, the US economy entered 2025 from a position of strength, which should help absorb these headwinds. Stonehearth manages risk via a proprietary hedging protocol analyzing 49 different market indicators, including 34 from Ned Davis Research, to adjust equity exposure as needed. This dynamic risk-management tool provides objective criteria to decrease equity exposure when structural weaknesses emerge, ensuring portfolio protection.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
High-conviction positioning: US markets rallied post-election while international equities fell on tariff fears. Despite potential inflation risks from new policy proposals, a strong US economy supports a cons...
Growth Outlook
Market outlook remains high conviction: US markets rallied post-election while international equities fell on tariff fears. Despite potential inflation risks from new policy proposals, a strong US economy supports a cons...
Risk Appetite
Risk appetite posture is high conviction: US markets rallied post-election while international equities fell on tariff fears. Despite potential inflation risks from new policy proposals, a strong US economy supports a cons...
Capital Deployment
Manager actively deployed capital into high-conviction opportunities. US markets rallied post-election while international equities fell on tariff fears. Despite potential inflation risks from new policy proposals, a strong US economy supports a cons...
Forward Guidance
Forward guidance signal: US markets rallied post-election while international equities fell on tariff fears. Despite potential inflation risks from new policy proposals, a strong US economy supports a cons...
Language Signal
Tone analysis indicates high conviction language: US markets rallied post-election while international equities fell on tariff fears. Despite potential inflation risks from new policy proposals, a strong US economy supports a cons...
Perceived Risk
Perceived risk level is evaluated as moderate conviction. US markets rallied post-election while international equities fell on tariff fears. Despite potential inflation risks from new policy proposals, a strong US economy supports a cons...
Opportunity Density
Opportunity density index indicates high conviction actionable entry points. US markets rallied post-election while international equities fell on tariff fears. Despite potential inflation risks from new policy proposals, a strong US economy supports a cons...
Time Horizon
Investment time horizon reflects a high conviction orientation. US markets rallied post-election while international equities fell on tariff fears. Despite potential inflation risks from new policy proposals, a strong US economy supports a cons...
