In the midst of a rip roaring bull market talk about tactical asset allocation is not exactly cool.  However the financial crisis and the bear market that followed demonstrated to many investors the value of tactical asset allocation.  Those investors who were able to ride out the bear market in assets like bonds and cash had a huge advantage over those investors who were ‘all-in.’  One example of this was the Ivy Portfolio that utilizes the 200 day moving average as a signal to enter/exit various asset classes.  Investors never satisfied with leaving things alone are interested in trying to build on these signals.  One approach is using a valuation overlay.  Another approach is to further slice and dice asset classes into smaller segments.  The first approach is technically difficult.  The second approach at some point reaches a point of diminishing returns.  Both approaches represent the perpetual challenge facing model builders:  simplicity vs. complexity.  In today’s screencast we take a look at the use and challenges of TAA models.

Items mentioned in the above screencast:

Measuring performance of the Ivy Portfolio. (dshort)

How do you compare valuations across asset classes?  (World Beta)

At what point does slicing and dicing asset classes no longer make sense?  (Capital Spectator)

What some TAA models are saying at the moment.  (MarketSci Blog, TAA for the Masses)

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Please see disclosures here.

Please see the Terms & Conditions page for a full disclaimer.