A fraying ceasefire, renewed pressure on the Strait of Hormuz and an American election cycle beginning to warm have pushed one question to the top of the investor agenda this summer: should portfolios be doing something about geopolitics? It is a reasonable question, and we believe it is also the wrong one. Macquarie’s July global strategy commentary, the most persuasive piece of research we have read this year, explains why, and its conclusions align so closely with the principles on which Demeter was built that we want to set them out here.
Wars fester, markets navigate
Macquarie’s first conclusion is that coercive statecraft has a remarkably poor record of producing decisive outcomes, which is why the conflicts dominating today’s front pages are likely to grind on for years rather than resolve in either direction. That sounds like grim news for markets, yet the historical record points the other way. In the absence of extreme tail risks, economies and markets have consistently found a path through festering conflict, and the investors who suffered most over recent years were those who overreacted to Ukraine, to Iran or to the tariff wars, rather than those who held their course. This matches everything our own process has taught us across more than thirteen years of live trading. Geopolitical noise has been a far greater danger to portfolios than geopolitics itself, and discipline, rather than prediction, has been what protected capital.
A market of rolling bubbles
The second conclusion concerns the technology cycle. Rather than a single great bubble waiting to burst, Macquarie describes a market of rolling bubbles, in which each deflating wave gives way to the next. Software handed the baton to large language models, which passed it to infrastructure, and robotics, automation and biotechnology are already queuing up behind them. Because artificial intelligence is a general-purpose technology propagating across nearly every corner of the economy, the deflation of one wave tends to fund and provoke the inflation of the next. Sharp corrections between waves are part of the pattern, and so is the arrival of new champions that few investors saw coming. We regard those corrections as a permanent feature of modern markets, and our strategy is designed on that assumption.
The line worth framing
The commentary closes with a sentence we would happily hang on the office wall: identifying new waves while avoiding the deflating winners of previous cycles will remain the key to successful investment. It is elegant advice, and it is also extraordinarily difficult to follow through stock selection, because it demands that an investor spot the next wave before the crowd does and abandon the last one before it rolls over. Very few have managed either feat consistently, let alone both. We built Demeter on the conviction that there is a better way to follow that advice.
How Demeter puts this into practice
The market already performs the rotation Macquarie describes. A capitalisation-weighted index captures each new wave as it grows, without requiring anyone to name the winner in advance, while yesterday’s champions fade from the index without a sell decision ever being made. New waves grow in and old winners fade out, automatically and without sentiment. We therefore do not pick stocks, and we never have.
Our work concentrates on a different decision entirely, which is whether to hold market exposure at all. Demeter’s process is rooted in the academic research of Nobel Laureate Eugene Fama and treats price as the primary indicator of market conditions. Our systematic, rules-based daily signal evaluates price movements and adjusts exposure accordingly, shifting into US Treasuries when equity conditions deteriorate and returning when momentum turns positive. The process has operated on live capital for more than thirteen years, through every conflict, tariff war and correction that period has produced.
On the geopolitics itself, we take no view. We do not forecast the trajectory of any conflict, and we cite Macquarie’s analysis as valuable third-party context rather than as an input to our process. Our strategy responds to market conditions rather than headlines, and that distinction is precisely what allows us to remain disciplined while the news cycle does not.
Built for the certainty of change
The decades ahead will produce waves nobody has yet named and retire champions nobody expects to fall. We believe the portfolios best placed for that world will be those designed around the certainty of change rather than the forecasting of it. That principle is where our strategy begins, and it is why a summer of alarming headlines has changed nothing about how we invest.
Third-party research cited for context; the views expressed in the Macquarie commentary are those of its authors. This material is provided for information only and does not constitute investment advice, an offer or a solicitation. Past performance does not guarantee future results. For qualified investors and registered investment advisers only. © 2026 Demeter Tactical Investments Corp.
