Tactical Asset Allocation
Tactical asset allocation makes short-term adjustments from strategic targets to capitalize on market opportunities or avoid perceived risks.
Exam Tip
Tactical = SHORT-TERM adjustments. Active market timing. Higher costs. Research shows most managers underperform.
What is TAA?
Short-term deviations from strategic targets.
Strategic vs. Tactical
| Feature | Strategic | Tactical |
|---|---|---|
| Horizon | Long-term | Short-term |
| Targets | Fixed | Variable |
| Timing | No | Yes |
| Cost | Lower | Higher |
Research Shows
Most tactical managers UNDERPERFORM.
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