Efficient Tactical Asset Allocation Strategies

In the current economic climate, uncertainty is the only certainty.  Concerns about inflation, deflation, unemployment, deficits, and global markets produce high volatility and frequent market corrections.  How can advisors manage this risk?

Active strategies, such as tactical asset allocation, provide a proactive approach for addressing today’s volatile market.  Not only can you improve risk adjusted returns as described in Mebane Farber’s research (http://www.mebanefaber.com/timing-model), but you can also address the concerns of jittery investors (http://www.fa-mag.com/online-extras/6134-can-advisors-give-clients-what-they-demand.html). 

The challenge for advisors is how to effectively implement tactical asset allocation strategies.  A study by Advisor Benchmarking (http://www.advisorbenchmarking.com/practice_value/april2007.html) shows tactical advisors spent 75% more time on portfolio management than strategic advisors.  The most time consuming aspects are: 1) how to conduct the research required for an active strategy and 2) how to implement the strategy across all of you accounts. 

Research will always be a time consuming endeavor but technology can speed up the process.  From Morningstar (http://www.morningstar.com) to Bollinger Band software (http://www.bollingerbands.com), there are tools to fit every budget and investment style.  Another option is outsourced research where Buy, Sell or Hold signals for securities are delivered by email.

Not surprisingly, active managers have twice the trading activity as strategic managers. A rebalancing and trade management system can reduce errors and significantly decrease the time to implement a strategy.  Using BlazePortfolio’s Atom Align software, advisors can scale their business and streamline the management tactical and strategic models.  Users can easily assign or import trading signals directly into models, rebalance thousands of accounts, review trades and execute the trades electronically to multiple brokers all within minutes.

To learn more about the Atom Align rebalancing and trade management solution call BlazePortfolio today.

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