Darius Dale recently joined Víctor Hugo Rodríguez on Negocios Televisión to discuss why markets may not have bottomed yet—and what needs to change before risk assets become attractive again. If you missed the appearance, here are three key takeaways that likely have huge implications for your portfolio.

1) Markets Won’t Bottom Until Three Things Happen

Darius laid out a clear three-point checklist that must be met before investors can confidently reallocate into risk assets:

  • The Fed must expand its balance sheet (i.e., QE or liquidity support).
  • Consensus earnings and GDP estimates must be revised lower to reflect recession risks.
  • Clarity is needed on fiscal policy—specifically, whether Trump’s tax cut package will actually be stimulative and whether the “DOGE” budget cuts will be softened.

Key Takeaway:
We’re still early in all three of these processes, meaning downside risk remains elevated over the next 2-3 quarters. Investors should expect more volatility until policymakers act decisively.

2) Foreign Demand for U.S. Assets Is Cracking

Darius warned that global capital allocators may be stepping back from U.S. Treasuries and equities. As the U.S. turns away from globalization and fiscal prudence, foreign investors are less willing to finance America’s growing deficits. With Congress potentially adding another $5-plus trillion in debt via tax cuts, this shift could put significant upward pressure on long-term yields.

Key Takeaway:
This marks the potential beginning of a structural regime shift in global capital flows—a bearish signal for bonds and a growing risk to U.S. financial stability.

3) The KISS Portfolio Is Positioned for Defense

Months ago, Darius moved his own allocation—and that of thousands of 42 Macro clients—into defensive posture. At the time of recording on Tuesday afternoon, the 42 Macro KISS portfolio featured:

  • 67.5% Cash
  • 0% Stocks
  • 30% Gold
  • 2.5% Bitcoin 

Key Takeaway:
KISS pivoted to 0% equities on March 5th, and will remain in defensive mode until it quantitatively derived volatility targeting and dynamic position sizing signals inflect. The strategy is designed to minimize drawdowns and preserve capital during cyclical bear markets—while also participating in bull markets.

Final Thought: Wait for the Signal, Not the Noise

Markets are still searching for footing in a rapidly shifting macro landscape. As Darius makes clear, this isn’t a moment for hero trades or blind optimism — it’s a moment for discipline. Until we see a dovish policy pivot, meaningful earnings downgrades, and/or clarity on fiscal direction, staying defensive isn’t just smart — it’s necessary. Risk-on will have its time, but we’re not there yet. Let the checklist, not emotions, guide you.

If you are not confident your portfolio is positioned correctly for the evolving macro landscape, partner with 42 Macro for data-driven insights and proven risk management overlays—KISS and Dr. Mo—to help you stay on the right side of market risk.

No catch—just real insights to help you stay ahead in the #Team42 community.

Best of luck out there,

— Team 42