Tactical Asset Allocation

I wonder if anyone has used it, and how you have done. I did some research on it, and TAA funds have not done well. However, the people doing it here do not own TAA mutual funds.

I have GPM fuzzy with a small amount of money, and it has done well.

I would like to here of other people’s experiences.

I am using BCC=0 timing. This has worked well for me, keeping me out of the market during the recent turmoil. Looks like NHNL might go bullish soon, and so I have to decide what to do next.


The best way to use those signals is to use them in combination, and to scale in or out depending on your tolerance for short term loss.

For instance, it would be no more recommended to go 100% to equities (or your preferred maximum equity allocaiton) when just the NH/NL flips to bullish than it would be to get completely out of equities when one of them goes bearish.

NH/NL is the shortest term indicator of the 3 and is the most subject to whiplash (we’ve already seen it happen 2x this year). Usually the SMA trend is the more medium-term, and DBE / 99Day is the longest one. Playing it safe, one might choose to put in 1/3 of the planned maximum equity allocation with the NH/NL flip, 1/3 with the SMA flip, and 1/3 with the 99D flip.


Intuitively this makes sense. Does anyone recall if such an allocation plan was ever backtested for optimal percentages for each indicator?

Also, the percentages could be different on the way out of the market than on the way back into the market.

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Thank you for your ideas.

I invite anyone to backtest this approach or any variant desired at portfoliovisualizer.com.

The general lesson from all of these backtests is not what we might expect. The most critical element? Minimize fees - don’t use high-fee mutual funds. (Meb Faber, Ben Carlson, others have issued research papers on this recently).