Tactical Vs. Strategic Investing: Where Should You Draw the Line
There’s no consensus on what defines “tactical” for asset allocation, but I know it when I see it. But on Wall Street and beyond, the details vary widely, enough so that two investors chatting about the topic can be referring to radically different ideas. Cue up an invitation to lay down some thoughts on the basic assumptions of a tactical asset allocation strategy.
Strictly speaking, it’s tempting to define anything other than a buy-and-hold strategy as tactical. But that goes a step too far. If you start with a 60% stocks/40% bonds portfolio, and rebalance it to target weights once a quarter or at the end of the year, for instance, I don’t see that as a tactical strategy; rather, it strikes me as a simple risk-managed…
