Tactical Investing Is a Big Buzzword With Financial AdvisorsPosted by in Blog on October 23, 2012
Financial advisors referring to themselves as “tactical investing” experts are the latest thing, Marketwatch reports. But what, exactly, is tactical investing?
Marketwatch says that it is “shifting money among different asset classes to dodge market crises.” However, tactical investing has become such a buzzword, that it is unclear exactly what it is anymore. In addition, the article says that it can give investors “scary moments in a potentially rocky fourth quarter, where political and economic currents are leading many advisors to recommend portfolio changes.”
Tactical investing grew in popularity after the 2008 financial crisis, when many people lost their shirts with the “buy and hold” strategy. However, this may mean different things to different people, as there is no official definition of the term.
For example, some financial advisors engaging in tactical investing “now advocate a strong position in stocks—albeit defensive ones,” the article notes, while others are advising cash allocations.
At any rate, you should check with your financial advisor to see how often he or she checks your portfolio, and ask what events might goad them to changing your allocations.
Written by Lisa Swan