Three Allocations, One Regime Model
Diversified, conservative allocations whose weights are set by the same overlays you see on the chart. Fully published, rebalanced monthly, sized to be held through a bad year. A framework to study and adapt — not a recommendation.
The framework needs one input: which regime you are in. Hand that research to the analyst. It splits the correlation on all three axes, says which bucket the last session sits in and since when, and shows what the split changes — the regime read →
Disinflation / easing current
Inflation trending down, policy rate falling, liquidity improving. Risk assets carry the most weight the framework ever allows; duration is rewarded; gold stays as the hedge against the regime being wrong.
| Sleeve | Target | Current | Drift | Rule that changes it |
|---|---|---|---|---|
| Global equities | 40 % | 41.6 % | +1.6 | −10 if CPI trend turns up 2 prints running |
| Government bonds 7–10y | 25 % | 24.1 % | −0.9 | −15 if Fed Funds direction flips to hiking |
| Gold | 15 % | 15.3 % | +0.3 | +5 if escalation ≥ 70 for 4 weeks |
| Broad commodities | 5 % | 4.8 % | −0.2 | +20 on reflation regime |
| Digital assets (BTC / ETH) | 5 % | 5.4 % | +0.4 | 0 on risk-off; capped at 5 always |
| Cash / T-bills | 10 % | 8.8 % | −1.2 | absorbs every cut above |
Rebalance band ±3 pts · nothing is outside the band today, so the September rebalance made no trades. Drift is measured against the target since 2026-08-01.
How the Regime Model Sets Weights
Four flags from the same overlays on your chart. The combination picks one of three allocations; the rules in the tables above adjust it at the edges. No forecast anywhere in the chain.
Inflation trend
Three-month change in CPI YoY, release-aligned. Up = reflation pressure, down = disinflation. Two consecutive prints are needed to flip.
Policy direction
Fed Funds: hiking, hold-at-peak, cutting. Read from the effective rate and the FOMC calendar, never from expectations.
Growth
ISM manufacturing below 48 for two months or a negative three-month payroll trend, together with widening credit spreads, flags contraction.
Geopolitical shock
Escalation index ≥ 85 in any region, or ≥ 70 for four weeks, adds a watch flag: gold +5 in any regime; ≥ 85 forces risk-off.
Why three, why so conservative
- Three regimes, not thirty. More states means more flips, more trades and more ways to be wrong. Three has been enough to move the big weights when it mattered and stay still the rest of the time.
- No sleeve above 40 %, no leverage, cash never below 10 %. A framework has to survive the year in which it is wrong. These caps are the price of that.
- Monthly, banded. Rebalance on the first business day only if a sleeve is more than 3 points off target. Most months nothing trades.
- Every rule is a recipe. The four flags are overlay recipes shipped with the terminal, so you can see the flag on your own chart the day it changes — and change the rule if you disagree.
Hand the Regime Read to It
The framework above needs one input from you: which regime you are in. That is research, and it is exactly what the analyst does. It splits the correlation on each of the three axes, tells you which regime the last session sits in and since when, and — the part that matters — how much the split changes the answer. It reads the regime; it does not set a weight and it does not size anything.
| Axis | Labelled from | r across all 10 years | r inside regimes | Spread the single number hides | Now |
|---|---|---|---|---|---|
| Liquidity | Fed Funds, 63-session change | −0.36 | −0.47 … −0.25 | 0.22 | Easing since 14 Jun 2026 |
| Inflation | CPI YoY, 126-session change | +0.47 | +0.29 … +0.61 | 0.32 | Steady since 25 Jun 2026 |
| Geo-risk | ACLED escalation, 63-session mean | +0.42 | +0.24 … +0.56 | 0.32 | Elevated since 24 Aug 2026 |
XAUUSD against the series each axis is about, ten-year sample. Ask the analyst is the split real? and it recomputes the correlation inside every regime bucket; buckets under 60 sessions are dimmed and flagged as thin rather than quoted.
What the geo-risk split actually says
| Geo-risk regime | Sessions | XAUUSD return / yr | Vol | r vs escalation |
|---|---|---|---|---|
| Calm | 602 | +13.8 % | 13.2 % | +0.24 |
| Normal | 1,238 | +13.2 % | 14.8 % | +0.42 |
| Elevated | 680 | −5.9 % | 17.0 % | +0.56 |
The escalation index is at 88 and the last session sits in the Elevated bucket — the one where gold's ten-year annualised return is negative and its volatility is highest. That is a description of 680 past sessions, not a forecast for the next one.
What it will and will not do here
- It will label the regime, say since when, and show what the label does to the correlation — on all three axes, with the sample size behind each bucket.
- It will arm a condition on the reading that flips the label, backtest it over 2,520 sessions and tell you how often it crossed — then watch it and log what it finds, including the checks where nothing crossed.
- It will not propose a weight, a trade size or a return. Asked, it answers plainly: "RegimeLens is a research terminal, not an execution or advice tool." The allocations above are a published framework you read and adapt; the analyst is the research that tells you which column you are in.
- It will not overstate the split. Where the gap between regimes is under 0.10 it says so — "on this axis the split barely matters, which is itself worth knowing."
Questions
Is this investment advice?
Where are the returns?
Why no leverage and why is cash never below 10 %?
How often do the weights actually change?
Can I change the rules?
Model portfolios are illustrative allocations for educational purposes. Nothing on this page is investment advice or a recommendation. Diversification does not guarantee against loss; past regime behaviour does not predict future behaviour. RegimeLens is analysis software and does not execute trades.