• INVESTMENT STRATEGIES
• TACTICAL ASSET ALLOCATION TECHNIQUES
• FURTHER READING:

Tactical asset allocation is an investment strategy that centers on altering investment proportions to take advantage of differences in expected performance of various asset classes. As an asset allocation strategy, the technique attempts to evaluate the expected performance of broad asset classes (such as stocks, bonds, and cash), rather than predicting which individual securities are likely to outperform in the upcoming period. Money managers evaluate the relative performance of each asset class, then adjust the exposure of their investment portfolios to each of the classes. In making investment decisions, proponents of tactical asset allocation often buy securities in out-of-favor asset classes.