DECISION TOOL / 03

Economic Event Review.

Determine whether an economic development changes your assumptions, scenario probabilities, portfolio exposures or conditions for review.

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Define the event precisely.

Describe what happened without interpretation.

Neutral one-sentence summaryEvent typeWho said, published or decided it?Event date

Separate fact, interpretation and reaction.

Keep what happened distinct from what it may mean.

FactInterpretationInitial market reaction

Compare it with the previous baseline.

An event matters when it changes what was previously expected.

What was previously expected or priced?How much did the baseline change?

Trace the economic mechanism.

Do not jump directly from the headline to a portfolio conclusion.

Transmission mechanism

Examine effects and time horizons.

Record immediate effects, later consequences and opposing forces.

First-order effectsSecond-order effectsPossible countereffectImmediate horizon3–12 monthsMulti-year

Build three scenarios.

Include the observable evidence that would support each one.

Base caseAdverse caseRelief case

Translate the event into portfolio exposure.

Identify where the economic effect could appear and what evidence would justify a formal review.

Portfolio relevanceWhich original assumptions are affected?What evidence is still required?What predetermined condition would require review?Current threshold state

Run the behavioural check.

Separate changed fundamentals from emotional urgency.

Which statements apply?Today’s price movement is creating urgencyI am treating the initial market reaction as confirmationI want relief from uncertaintyOther investors’ actions are influencing meNone of these pressures appears material

Review date

Complete all required fields, the exposure map and behavioural check.

Economic Event Review.

One decision idea, every Saturday morning.