Flexibility
makes a tactical asset allocation strategy superior to a static or fixed asset allocation which would not allow an investor to make changes to there target asset allocation.
Not exact matches
First, my usual disclosure: I run an
asset -
allocation portfolio that is low cost, global and
made up of mostly passive indexes and other strategies; I also run a
tactical portfolio that serves behavioral purposes.
Seeing signs of reflation at work, the GIC recently
made some strategic and
tactical adjustments to our
asset allocation models.
This approach works well if you have a strong strategic
asset allocation plan and you don't want to change that overall plan while you
make your
tactical moves.
Bradley believes that active managers can add value by
making tactical shifts in
asset allocation — though not too often, and always within a fairly narrow range.
Juicy Excerpt: The problem is that the people who engage in
tactical asset allocation are not clear on when
allocation changes should be
made or how large they should be on how they will know whether the changes will be successful or not.
Which is why the notion of increasing your odds for success by increasing the number of decisions you and / or your managers are
making by adopting a
tactical asset allocation approach is, in the end, counterintuitive.
In contrast, a
tactical asset allocation decision to raise cash
makes it possible to acquire shares of stock or bond ETFs at lower prices in the future.