The Tactical Asset Allocation Strategies Explained

Number One

Market Identification

The Tactical Asset Allocation Strategies' Market Conditions Model identifies and segregates market risk conditions

Tactical Asset Allocation Strategies Market Conditions Model
Tactical Asset Allocation Strategies Market Conditions Model

Number Two

Basket Selection

Fund Baskets are selected based on Market Condition ("Favorable", "Balanced", or "Hostile") and subscriber risk tolerance

Global Core

Global Core is our "all weather" tactical asset allocation basket which is suitable for all market conditions. Global Core is our lowest risk basket and will go to 100% cash under the most adverse market conditions.

Global Core may be used as a standalone Strategy or it may be combined with Satellite Strategies for higher returns.

  • US Equity includes large, mid and small cap
  • Foreign Equity includes developed and emerging
  • Alternative Assets includes precious metal bullion
  • Fixed Income includes investment grade and treasuries
  • Cash
Chart and Table

Global Satellite

Global Satellite provides two supplemental baskets for subscribers seeking higher returns:

  • Global Satellite (Favorable) is designed to earn very high returns during Favorable market conditions typically found during just 50% of a full market cycle. The basket includes index, sector, and international Equities; Fixed Income; Commodities, and Cash.
  • Global Satellite (Hostile) is designed to increase returns during Hostile market conditions typically found during 25% of a full market cycle. The basket includes a variety of Fixed Income selections and Cash.
Chart and 3 Tables

Funds within each basket are ranked and the tactical model selects the best performing funds and/or cash for each basket. Poorly performing investments are discarded.

Number Three

Rebalance Portfolio

I send out a Rebalance Notice once each month which includes rebalance instructions for each active basket (Core+Satellite). It requires just a few minutes each month to rebalance the portfolio.

Global Strategy Results

Balanced Market Conditions: 100% is held in Global Core

Favorable Market Conditions: funds are shifted from Global Core to Global Satellite (Favorable).

Hostile Market Conditions: funds are shifted from Global Core to Global Satellite (Hostile).

Subscriber allocations to Satellite baskets may range from 0% to 100% depending upon the Subscribers risk and return preferences. Examples, complete with charts and month by month returns, are shown below for three different allocations.

Global Strategy (Core)

Example allocates 100% of the TAAS portfolio to the Global Core Strategy (our "All Weather Strategy") at all times during the full market cycle.

Chart and Table

Global Strategy (Conservative)

Example allocates 50% of the TAAS portfolio to each Satellite Strategy, when active, otherwise 100% remains in Core Strategy

Chart and Table

Global Strategy (Aggressive)

Example allocates 100% of the TAAS portfolio to each Satellite Strategy, when active, otherwise 100% remains in Core Strategy

Chart and Table

What makes the TAAS Global Strategies unique and well worth the annual subscription price?

Market Conditions Model

Our multi-factor model tracks price momentum, credit risk, market valuation and analyzes the interrelationships of these factors to identify periods of high and low directional probability and risk.

Condition-specific Tactical Strategies

Each of our Tactical Asset Allocation Strategies is designed for a specific market condition: Favorable, Balanced, or Hostile.

Targeted Volatility

This proprietary methodology manages volatility through the construction of baskets in which the funds are selected and allocated to achieve a target volatility.

This combination of Market Conditions Model, Conditions-specific Tactical Strategies, and Targeted Volatility provides the unique building blocks for the TAAS Global Strategy which lowers your risk and improves your returns ... well beyond the capabilities of traditional Asset Allocation methods.

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Why I chose the Vanguard Balanced Index Fund as my benchmark

  • Vanguard Balanced Index Fund is the the top ranked Morningstar Balanced Fund selection (Investor shares)
  • It is one of the simplest, lowest-cost balanced funds available
  • Its target allocation is 60% Equity and 40% Fixed Income which provides a good balance of growth and income exposure
  • It is widely recommended as a core holding suitable for many investors, particularly those nearing or in retirement
  • Its 40% Fixed Income allocation is very similar to Full Cycle Fixed Income holdings of the TAAS Strategies
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The Global Satellite (Favorable + Hostile) combines the performance of both Global Satellite Strategies shown below. The 400%+ Up/Down Ratio is exceptional as is the Compound Annual Growth @ Risk which measures the rate of return for the months during which either of the two basket is active. As with all of our strategies, Drawdowns are minimal.

The Global Satellite (Favorable) basket is used when the Market Conditions Model signals that market risk conditions are "Favorable". The 400%+ Up/Down Ratio is exceptional as is the Compound Annual Growth @ Risk which measures the rate of return for the months during which the basket is active. As with all of our strategies, Drawdowns are minimal.

The Global Satellite (Hostile) basket is used when the Market Conditions Model signals that market risk conditions are "Hostile". The 300%+- Up/Down Ratio is exceptional under Hostile conditions as is the Compound Annual Growth @ Risk which measures the rate of return for the months during which the basket is active. As with all of our strategies, Drawdowns are minimal.