At TFA, we believe there are two primary reasons to include tactical investment management in one’s portfolio.
- To Manage the Risk of Severely Negative Market Cycles
- To Generate Alpha – or Outperformance versus the Benchmark
First is the concept of managing risk. To understand the gist of this, ask yourself the following question: Do you really want to stay fully invested in stocks the next time the market declines of 30%, 40% or more? Or would you prefer to at least try and lose less the next time the bears come to call?
It’s been our experience that, if given a choice, most investors would prefer to try and lose less during those nasty bear market periods – instead of just sitting there and watching huge declines occur.
Thus, TFA believes that tactical, risk-managed funds should be a part of every investor’s portfolio.
