I am thinking of substituting some of my fixed income for a tactical asset allocation strategy. The idea of tactical asset allocation is you can get stock like returns with bond like risk. I will mention Meb Fabers strategy, although I have not decided that is the best one to use. It is very simple. You equal weight 5 asset classes. The s and p 500, foreign developed markets, 10 year US govt. bonds, the goldman sacks commodities index, and the REIT index. On the last day of every month you calculate its 10 month moving average, and if it is above it you stay invested, and if it below it, you go to cash. This strategy has beaten the market, with much lower volatility from 1900 to 2006, when the paper was written, and has beaten the market with lower volatility since then, or post discovery. I also know that things work great in the stock market, until you start using them, and then stop working. I have provided a link to the white paper. It is entitled a quantitative approach to tactical asset allocation. Please read the paper before investing any money. Mebfaber.com This is something that I am actually thinking of doing, so any opinion, even ones that say it is a bad idea are welcome. AAII Boston Chapter
Kaitlyn Nichols: interesting!
Serenity Romero: I am thinking of investing some money in the strategy. Do you have an opinion about it? AAII Boston Chapter
Kaitlyn Nichols: Looks sound, better than I would do for sure, lol. Need expert opinion
Serenity Romero: I guess more study is required on my part. Also, there are at least 40 different Tactical asset allocation strategies. Here is a link to a list of some of the strategies. AAII Boston Allocatesmartly.com
List of Strategies – AllocateSmartly
Omar Copeland: Meb Faber has a good podcast
Serenity Romero: Yes, I listen to it. AAII Boston Chapter