How to Participate in the Upside of the Market and Limit Losses at the Same Time

Filed under: retirement planning

Yikes! If you’ve been reading headlines or watching the news this week, you might be concerned about the state of the stock market. The enormous drop following by a big up tick has a lot of people feeling nervous about volatility, particularly with regard to their retirement plans.

Hindsight is always 20/20, of course, and no one wants to say “I told you so” about such a drastic event. But those with tactically managed portfolios are probably feeling much more at ease. If big market swings worry you, then you may want to investigate ways to limit your losses in the future.

Tactical portfolio management is a strategy that allows you to actively respond to current market conditions. It’s quite different from the “buy and hold” approach (which may be more familiar to you) in that it limits your exposure when the market takes a downward turn. Many investors are switching to this more dynamic strategy to reduce the risk of loss.

This video will give you a brief overview of Tactical Portfolio Management.

With tactical portfolio management, we allocate across asset classes in response to current valuations and market conditions. As the old saying goes, we don’t put all of our eggs in one basket. You’re probably already diversifying your egg placement, but with tactical portfolio management we move our eggs depending upon the conditions within each basket. This type of strategy requires careful analysis of market conditions, and a keen eye on the various risks and costs associated with your decisions.

The old buy-and-hold method might work well under good market conditions, but during times of intense change we often find that it is not the best approach. If recent market events have you feeling concerned, and you want to more actively manage your portfolio to guard against future losses, call John Dubots at Dubots Capital Management. (888) 605-8363. Ask John what tactical portfolio management can do for your financial future.