Last year we observed that a host of commodity markets were rallying (see our post on cotton markets). At the time, commentators weren’t predicting the rapid world changes that the last six months have delivered. Globally, inflation is in the high single digits, commodity prices have soared, bond markets crashed, equities have dramatically corrected, and the risk of recession is increasing.
ECCM’s systems were already positioned for these moves in October 2021. That’s the power of systematic investing – participating in large market moves without having to predict or explain why, and avoiding negative left tail risks, which some (many) investors have paid dearly for in bond and equity markets.
At ECCM, 100% of our trading is systematic. We see the value in systematic trading through the cycle, and a substantial allocation to this investment style is especially valuable in challenging market environments, when it’s not necessarily obvious that traditional asset classes will deliver wealth creation.
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