The following is an excerpt from MICHAEL A. SISK | April 14, 2012 | Barrons.com |
A fundamental tenet of financial advice is to settle on long-term goals, then pick an asset-allocation strategy and stick with it. A corollary is that trading in and out of positions in response to daily market gyrations is almost guaranteed to undermine an investor’s long-term objectives.
But this advice, while often repeated, is not absolute. In the face of pervasive market volatility, some financial advisors recommend earmarking a portfolio for the short term and medium term, to take advantage of big market moves. This more active investing approach, often called a tactical overlay, is also an opportunity for financial advisors …
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