Tactical Asset Allocator

This portfolio ran from 2013 to 2019. The investment brief was to be cautious and diversified across asset classes, using exchange traded funds wherever possible, and to avoid being down across all holdings at any one time.

Tactical Asset Allocator: lessons learnt from investing in ‘star’ economies

This is the last write-up on the tactical asset allocator portfolio, which has been running since 2013. The investment brief was to be cautious and diversified across asset classes, using exchange traded funds wherever possible, and to avoid being down across all holdings at any one time.

While the portfolio has only doubled in size over the five years since its inception, it has never been down by more than a few percent month on month, although the publication-date constraints of having to deal on one set day per month has limited its agility.

Tactical Asset Allocator: China powerhouse offers pocket of opportunity

The S&P 500 index has risen by about 80% over the past decade, but stockmarkets in the rest of the developed world remain 25% below their levels before the financial crisis. Some 15% of that decline has occurred since the peak in January last year. This bifurcation is odd, since the only real economic growth has been generated by emerging powerhouses such as China, whose GDP has grown by nearly 250% over the past decade.

Tactical Asset Allocator: India has a future too bright for investors to ignore

Warren Buffett’s comments in Berkshire Hathaway’s latest annual report reiterate his sage advice that investors should not invest in anything on a time horizon of less than 10 years. That message underscores the attractions not only of nascent sectors such as artificial intelligence, robotics and food tech, but also of the growing emerging economies that will eclipse today’s biggest markets in the not too distant future.

Tactical Asset Allocator: trade detente sets up market for rally

The rally in the first quarter lifted the US and other markets to a six-month high, while sovereign bond prices have mirrored investors’ renewed confidence by tumbling from their recent two-year peak. The uber-pessimism of the fourth quarter of 2018 has turned into fresh hope that gains can be made when trade wars and Brexit have been pushed out of the way.

Tactical Asset Allocator: sterling a worry, but US earnings strong

Stockmarkets around the world enjoyed their strongest start to a year for three decades. The S&P 500 index rose 7.8% and 3% in January and February respectively, the best first two months of any year since 1991. That run was broken in the first week of March, as stockmarkets fell on disappointing economic news, particularly US jobs data, downward growth forecasts from the OECD, and the announcement that the European Central Bank feels the need to launch fresh stimulus.

Tactical Asset Allocator: geopolitical strains can lead to big gains for investors

It would be easy to imagine that the US/China trade war and the US Federal Reserve’s resolve to tighten monetary policy, which have been the two big fears hanging over the US stock market throughout 2018, are reaching some sort of stasis. The market certainly rejoiced when Fed chairman Jay Powell made the dovish comment that interest rates are “just below” the range of rates considered neutral. The Dow Jones Industrial Average index shot up by 600 points in one session, its best single-day gain since March.

Tactical Asset Allocator: a contrarian bull in the China shop

The big news this month has been the climb in US 10-year Treasury bond yields to 3.2%, their highest level since July 2011. Bond yields had been rising gently (and their prices falling), reflecting confidence that the US economy was robust enough to weather trade wars and other setbacks. However, the rise has spooked markets, forcing a reassessment of risk-free assets compared with equities.