Summary:
I sit down and chat with Dr. Rufus Ranking, Tactical asset allocation expert, to discuss what you can do in consideration of the turmoil the markets have been facing over the last few weeks. This method is a variation on strategic allocation, but is a lot more adapted. Exposure is reduced as assets become more volatile, which increases chances for success. Tune in for more insight.
Highlights:
-There’s been dramatic market turmoil in the last few weeks. What could you have done in anticipation of this, and what can you do now?
-Tactical asset allocation is a variation on strategic allocation, but we’re more frequently updating our estimates on what the world looks like
-It’s a lot more adapted; most of these approaches reduce exposure to assets as they become more volatile and go into negative territory
-Most TAA approaches focus more on price/price-related data
-Focus on price levels, recent returns, volatility, etc.
-You get most of the upside and a lot less of the downside, and get the main trend right most of the time
-When things are risky, you can reduce your exposure
-Basic approach is to look at volatility in basic assets
-Most TAA approaches use relative strength and time series momentum
-Rufus has been applying these strategies for close to 20 years
Useful Links:
Financial Survival Network
Sidepocket
