Portfolio Construction

Tactical Asset Allocation

Definition

What is Tactical Asset Allocation?

A temporary deviation from long-term asset weights to exploit perceived opportunities or manage risk.

Example in practice

The manager raises cash and reduces equities during unusually expensive market conditions.

Keep learning

The complete collection of investments owned by an investor or managed under one mandate.

The process of selecting and combining investments to meet return, risk, liquidity, and time-horizon objectives.

A long-term target mix of asset classes based on an investor's objectives and constraints.

A statistic ranging from minus one to plus one that describes how two return series move together.

Think you know your investing terms?

Put your knowledge to the test with a quick quiz.