Tactical asset allocation adjusts portfolio allocations based on market conditions from "summary" of Institutional Investment Management by Frank J. Fabozzi
Tactical asset allocation involves making changes to a portfolio's asset allocation based on current market conditions. This strategy allows portfolio managers to respond to changing market environments and potentially capitalize on opportunities or mitigate risks. By adjusting the allocation of assets in response to market conditions, investors aim to improve the overall performance of their portfolios. Tactical asset allocation differs from strategic asset allocation, which involves establishing a long-term asset allocation target based on an investor's financial goals, risk tolerance, and time horizon. While strategic asset allocation provides a roadmap for long-term investment decisions, tactical asset allocation is more flexible and responsive to short-term market fluctuations. Portfol...
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