Portfolios positioning reflects cautious message from weight of the evidence.
Watching to see if evidence argues for increasing exposure or getting more defensive
When volatility picks up, there can be a natural desire to review and reconsider or reduce all long exposure. This impulse reflects the reality that for many, risk tolerance is higher in periods of strength than in periods of weakness. Our view is that proactive risk management can lead to better outcomes than reactionary decision-making.
That is a major reason why we spend so much time reviewing and discussing the weight of the evidence. We don't know what the future will hold, but we can increase the odds of looking in the right direction by watching where the wind is blowing. While always open to new information, we do not want to over-react to a situation that has already been accounted for.
