Objective of Tactical Asset Allocation Strategy

Very Easy Asset Allocation Tactical Asset Allocation

John is an investment manager who employs a tactical asset allocation strategy within his client portfolios. He believes that current economic conditions, marked by low interest rates and rising equity valuations, may lead to a short-term correction in the stock market. To mitigate risk and seize potential market opportunities, he decides to temporarily increase allocation in fixed income securities.

In this context, what is the primary objective of John's tactical asset allocation strategy?

To maintain the long-term strategic asset allocation regardless of market conditions.

To react to short-term market changes to optimize returns.

To diversify the portfolio by investing in alternative assets.

Hint

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