Active asset allocation would be of importance to the investor with respect to decisions regarding where exactly to deploy his resources and in what proportion.
Active asset allocation has attracted a lot of interest from investors in recent times. But asset allocation also means different things to different people; therefore it would be appropriate to define the use and application of various terms in this regard. While, long term asset allocation would establish a policy mix consistent with the long term portfolio objectives; tactical asset allocation would add value while opportunistically responding to changing patterns of risk and reward, which would enable a buy low, sell high stance on the part of the investor; and portfolio insurance would of course protect against unexpected performance while allowing a sell low, buy high on the part of the investor.
While explaining this concept, we shall be covering the following aspects:
