To protect against significant equity market downside, some managers adopted technical indicator-based “models.” Unfortunately, such systems often amount to selling low and buying high, with performance loss from market “whip-saws” over time far outweighing expected protection benefit. As a result, performance for many managers suffered in 2014.
Tactical investment management means allocating the portfolio based on expected near-term returns and risks – attempting to avoid market downturns, but to participate in the upside. However, simplistic, backward-looking methods can hardly work. Based on our tactical investment research, we at Model Capital are convinced that fundamentals drive markets. In order to be successful, tactical management must be forward-looking, and be based on fundamental factors.
Model Capital Management LLC is a tactical investment manager. Learn more about our unique fundamentals-based approach to tactical investment management and our tactical investment SMA models/strategies.