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Tactical Asset Allocation

Our Tactical Asset Allocation recommendation is a 1 - 4 month view on US equities vs bonds and vs cash. It is published monthly. The recommendation is based on medium-term risk appetite, and other, models and our analysis of the global economic cycle.

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What is the Tactical Asset Allocation?

The Tactical Equity Asset Allocation is an explicit recommendation on the outlook for the S&P500 (vs. bonds & cash) on a 1 – 4 month time horizon.  We give specific and scaled overweight or underweight recommendations on US equities, bonds and cash based on the message from our medium term risk appetite (and other) models, as well as our analysis of the global economic cycle. We also publish the track record of those recommendations, updated monthly.

The basis for our approach is grounded in our view that 'fear and greed' are key drivers of 1 - 4 month trends in equity markets. To measure that, we have designed a variety of risk appetite, and similar, models. We then use our view on the US and global economic cycle to judge how 'greedy' or 'fearful' the market is likely to become. That then provides further insights into how to finesse the signals from the models.

When markets move rapidly we publish intra month Longview Alerts to supplement the view expressed in our recommendation. For longer term recommendations on equities (as well as other key assets), see the Quarterly Asset Allocation. For our recommendations on other asset classes see the Global Macro Trade Recommendations.