A regime label never tells you the final allocation by itself. It only sets the ceiling for stocks, gold, and bitcoin.
The dashboard starts with a reference maximum-risk portfolio of 60% stocks, 30% gold, and 10% bitcoin. The market regime can keep those targets or cut them. VAMS then decides how much of each reduced or unreduced target is active.
The four regime mappings
Goldilocks and Reflation use the full reference targets:
| Regime | Stocks | Gold | Bitcoin |
|---|---|---|---|
| Goldilocks | 60% | 30% | 10% |
| Reflation | 60% | 30% | 10% |
| Inflation | 30% | 15% | 5% |
| Deflation | 30% | 30% | 5% |
Goldilocks and Reflation are both risk-on regimes in this portfolio. Their economic stories differ, but the current top-down capital targets are the same.
Inflation cuts all three risk sleeves in half. Deflation also halves stocks and bitcoin, but keeps the full 30% gold target. That is a deliberate portfolio mapping, not a claim that gold must rise in every deflationary episode.
The SEC’s asset-allocation guide ties allocation to objectives and constraints. The dashboard’s 60/30/10 reference is illustrative. It is not a universal recommendation.
CFA Institute’s asset-allocation framework provides the broader portfolio-construction context. The dashboard supplies a public model with explicit rules; the investor still supplies the objective, horizon, and constraints.
Then VAMS applies a multiplier
Each core asset receives its own VAMS state:
- Bullish: 100% of the top-down target
- Neutral: 50% of the top-down target
- Bearish: 0% of the top-down target
Suppose the regime is Inflation. The stock target is 30%. Bullish stocks remain at 30%, Neutral stocks fall to 15%, and Bearish stocks fall to 0%.
Now suppose gold is Neutral and bitcoin is Bearish. Gold receives half of its 15% Inflation target, or 7.5%. Bitcoin receives none of its 5% target. If stocks remain Bullish, the complete allocation is 30% stocks, 7.5% gold, 0% bitcoin, and 62.5% cash.
So the actual allocation cannot be read from the regime label alone. You need both layers.
Why use two layers?
Top-down and bottom-up evidence solve different problems. The regime asks whether the market environment supports risk. VAMS asks whether the individual asset is behaving well enough to deserve its available target.
A macro view can be early. A trend signal can whipsaw. Combining them does not eliminate either problem, but it prevents one story from controlling the entire portfolio. AQR’s long-run trend evidence explains why price trends can be useful even when the economic explanation is incomplete.
The Federal Reserve’s Financial Stability Report also illustrates why market risk is better understood through several categories such as leverage, funding, and market functioning. The dashboard uses its own simpler four-domain structure for allocation.
Where cash comes from
Cash is the residual. It rises whenever the regime cuts a top-down target or VAMS applies less than 100% of that target.
Cash is not treated as long-duration Treasury exposure. It earns the declared three-month Treasury cash proxy in the model simulation and remains available when evidence improves. Vanguard’s rebalancing guidance is useful here because it treats portfolio changes as maintenance, not as a dramatic market call.
Read the weights in order
Read the allocation in this order:
- Identify the confirmed or held top-down regime.
- Read the target for each sleeve.
- Apply each asset’s VAMS multiplier.
- Put the unused amount in cash.
Do not stop at the regime label. It provides the ceiling; the actual weights show what the model owns.