Tactical Asset Allocation 

We demonstrate how even a simple, low turnover implementation of tactical asset allocation can improve performance and reduce risk.

In this paper we lay out an approach to Tactical Asset allocation, covering a wide range of topics to back up our analysis. Among the topics covered:

• Market Return
• Risk vs Time
• Interest Rates
• Convergence and Correlation of Stocks and Bonds
• Performance During Volatile Markets

Clients are routinely profiled and assigned to categories such as “conservative,” “moderate,” “balanced” or “growth”, and as the length of retirement increases, the strain on retirement funds is increasing along with it. Clients asset allocation is matched to their risk profile, not their income needs.

The current low interest rate environment has created a situation where the gap between the portfolio required to meet a retiree’s income needs and a portfolio designed to suit a retiree’s stated risk preferences is arguably as wide as it’s ever been. In this paper we provide an analysis into Tactical Asset Allocation and how to improve performance and reduce risk.