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Do you, like me, have battles with yourself? What a hassle. I’ve been fighting myself over buy-and-adjust vs. pure tactical for years. Buy-and-adjust is my version of buy-and-hold.

My current thought (as opposed to the old non-correlated approach, which worked until it didn’t) is that by using flexible funds (these are kind of go-anywhere, do-anything and, by the way, respond-to-current-condition mutual funds), one should stave off the huge dips when the market goes south. The idea is that one of these tactical funds is good, three is better and six — married to a nice strategic income fund (Fidelity Advisor and Pioneer offer good ones), maybe with a dollop of Pimco All Asset added, along with some Templeton Global Bond and Legg Mason Brandywine Global Opportunity Bond — should serve investors well in a bad year. In other words, the funds have “tacticality” (a word I invented last year) built in. 

A California customer and friend said last week that I tend to over think things. He’s right. The alternative is to use a tactical “system” like The Sherman Sheet (888-957-3438) or Dynamic Portfolio Strategies (877-377-7872). Why do I harp about these two tactical services? Because many of us need to focus on asset gathering, and it’s tough to gather assets and be an investment whiz. There are tactical programs at both shops that are suitable for funds, ETFs and/or investment annuities.     

And, investment (variable) annuities lead me to another thought: won’t annuities be even more valuable in the years ahead, given new taxes and tax rates, both visible and hidden? There are a number of trading annuities that don’t offer much in the way of living or death benefits. They are, instead, basically “platforms” with robust sub-account (fund) selections, some numbering in the hundreds, with very low expenses, and, of course, with annuity fences to guard against the federal and state taxmen. I could argue that some of them may seem more appealing than working with a clearing house, especially when free rebalancing is included.  

Some of the flexible funds I watch, inside and outside of annuities, include Invesco Balanced Risk Allocation, Pimco Global Multi-Asset, Transamerica Tactical Income, WBI Balanced, BlackRock Strategic Income Opportunities, Pioneer Multi-Asset Real Return and Pimco All Asset. You may know of some other worthies — if so, respond to this blog and let us all know.        

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Have a wonderful third week (and fourth, too, come to think of it, since this blog will take the next week off) of 2013, okay? Keep things humming along and keep being a leader.  

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