How Tactical Investing Works

SUMMARY

Tactical asset allocation investing is a strategy that involves making adjustments to an investment portfolio based on short-term market conditions. This approach aims to take advantage of potential opportunities that arise in the market, while also mitigating risks. By actively monitoring and analyzing market trends, investors can make tactical shifts in their asset allocation to optimize returns. This may involve reallocating investments across different asset classes, such as stocks, bonds, and commodities, based on the perceived attractiveness of each. Tactical asset allocation investing requires a thorough understanding of market dynamics and the ability to react swiftly to changing conditions. It can be an effective strategy for investors looking to capitalize on market fluctuations and maximize their investment returns.

HOW IT'S DONE

Tactical asset allocation is a strategy adopted by money managers to make short-term adjustments in a portfolio's asset allocation based on their evaluation of market conditions. The money manager analyzes various economic indicators and market trends to identify potential opportunities and risks. They then make informed decisions to shift the investment mix within the portfolio. This may involve increasing or decreasing exposure to certain asset classes, sectors, or regions. The money manager aims to capitalize on short-term market fluctuations and exploit favorable investment opportunities. They continuously monitor and reassess the portfolio's asset allocation, making adjustments as needed to optimize returns and manage risks. Through tactical asset allocation, money managers strive to achieve superior investment performance by actively responding to changing market dynamics. Examples include:

• Sectors or Industries can be added or removed from a portfolio - Energy, Technology, Healthcare, Semiconductors, Precious Metals, etc.

• Regions and Countries can be added or removed from a portfolio - USA, Europe, Japan, Latin America, Emerging Markets, etc.

• Stock styles can be over-weighted - Growth vs. Value, Large cap vs. Small cap

WHO'S IT FOR

Individuals who are seeking to optimize their investment portfolios and are willing to take on a more active approach should consider tactical asset allocation strategies. These strategies involve adjusting the allocation of assets based on short-term market trends and economic conditions. By constantly monitoring and reassessing their investments, investors can potentially take advantage of market fluctuations and maximize returns. Tactical asset allocation strategies are particularly suited for investors that are comfortable with making frequent adjustments to their portfolio. However, it is important to note that these strategies require careful analysis and research, as well as a thorough understanding of market dynamics. At Khoury Private Wealth, our tactical strategies aim to provide an active approach while taking advantage of short-term market movements with a tax-smart approach.