From the April 2008 issue of Investment Advisor • Subscribe!

In a Nutshell

We argue that a tactical asset allocation approach will save clients pain, and in some instances add alpha to those clients' portfolios as well. Our approach is to stay objective and block investor emotion from the buy-sell decision by focusing on price movements which we believe are the most accurate reflection of investor sentiment. In our case, we do this by monitoring a set of four price moving averages to measure investor expectations, which in our judgment generates accurate sell signals. Such a tactical approach can also alert the advisor to those sectors that can be expected to outperform.
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