Q3 2023 Economic Outlook cover image

Q3 2023 Economic Outlook


If you’re feeling FOMO and itching to get into equities lately, this is the report for you.

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A Glance Inside

We make the argument for why positioning defensively for a hard landing may reward the most patient and disciplined investors.  

At Equi, our goal over the past 6 months has been to position ourselves defensively to capture potential gains in the event of a hard landing. In addition, we strive to remain truly diversified and uncorrelated to equities so that we can preserve and grow wealth across almost any economic environment.  Despite the S&P 500 demonstrating gains that we believe to be the calm before the storm, we remain committed to and confident in our strategy of remaining defensive and diversified.  We continue to position ourselves to capture what we believe will be the more significant upside in the long-run. 

Here are a few clips from our report: 

Our View on What’s Driving the Equities Rally

Economic cycles tend to follow the same pattern and we believe that the recent S&P 500 rally is due to what is called a “Return to normal” phase that usually hits before a hard landing. Much of the gains in the S&P 500 are being driven by just a handful of AI stocks.

Why is the NY Fed predicting a recession by July 2024, and are Equi’s macroeconomic models predicting a recession as well?

The NY Fed’s prediction of a recession is consistent with Equi’s proprietary macroeconomic model. The reason for the discrepancy between the media vs. Equi and the NY Fed is the fact that most reports analyze lagging indicators, which point to a soft landing. We believe in placing emphasis on leading indicators (tax receipts, the 2-10 yield curve, the LEI, etc.), which we believe point to an upcoming recession.

How should asset managers position themselves if they anticipate a hard landing?

We believe that asset managers who prioritize trading spreads rather than trading pricing will benefit if there is a hard landing. However, the most challenging aspects of taking a contrarian stance will be patience. Few investors will likely have the patience and the discipline to resist chasing higher pricing that may manifest in the markets short-term.

We encourage you to view our full report to understand what we believe to be the top leading indicators that point to a hard landing. 

We remain confident that our patience in this market will result in our continued ability to preserve and grow wealth for our investors.

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*Towards Equilibrium Inc. (“Equi”) and Equilibrium Ventures Inc. (“EquiV”) communications are intended solely for informational purposes. They should not be construed as investment, legal, tax, or trading advice and are not meant to be a solicitation or recommendation to buy, sell, or hold any securities including funds mentioned. Any such offer or solicitation can only be made by means of the delivery of a Confidential Private Placement Memorandum to qualified eligible investors.

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The information contained herein is as of the date indicated, not complete and is subject to, and qualified in its entirety by, the more complete disclosures, risk factors, and other terms and conditions contained in the respective offering documents of the respective investment funds.

Before investing in the fund, you should thoroughly review the offering documents with your legal, tax and investment advisors to determine whether an investment is suitable for you in light of your investment objectives and financial situation. An investment in the fund is not suitable for all investors. Performance results are net of all fund and investor adviser expenses and incentive fees, and reflect the reinvestment of interest, capital gains and other earnings. Performance results for 2022 and all subsequent periods are unaudited and are subject to adjustment. The returns shown may vary from the returns for each individual investor based on the timing of capital contributions and/or different fee arrangements.

A significant portion of a fund’s investments may be invested in assets in illiquid investments and, therefore, will be subject to less frequent liquidity.

Any portfolio composition discussed is accurate only on the date set forth. Portfolio composition may change, and you should not expect the same or similar portfolio composition to be maintained at any time in the future. Asset allocation does not guarantee a profit or protection from losses in a declining market. Investments, when sold, may be worth more or less than the original purchase price.