Macro● Neutral
Fund Manager Raises Cash as Topping Process Risk Rises
Auour Investments raised its cash allocation to 15% from 10% in aggressive equity strategies, signaling a view that market tops are processes, not events, and that patience is warranted.
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Auour Investments last week lifted the cash allocation within its aggressive equity strategies to 15% from 10%, a move the firm said reflects a higher probability that markets are moving through a topping process, not a prediction of an imminent peak.
“Our evidence suggests that the probability we are moving through a topping process has increased,” the firm wrote in a client note seen by AlphaScala. The note, originally published July 31, outlines a broader philosophy that market tops are rarely single events. They are processes where valuations become more demanding, optimism broadens, leadership narrows, and the balance between potential reward and risk gradually shifts.
The cash increase is modest, but the reasoning behind it cuts against the common impulse to treat uncertainty as a problem to be solved with a single decisive bet. Auour’s approach is to adjust portfolios only when the weight of the evidence changes, not when headlines demand conviction.