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Strategic Versus Tactical Asset Allocation

  • Henrik Lumholdt
Chapter

Abstract

In this chapter, we will evaluate the merits of using the SAA as a stand-alone approach versus combining it with TAA decisions. We will begin with a discussion of the nature of the SAA as an investment decision. This is followed by an examination of the concept of macro-inefficiency and how this relates to asset allocation and a review of some of the empirical research on the importance of asset allocation. We finalize with a discussion of the controversial concept of time diversification, the question of whether a longer time horizon warrants a greater exposure to risk assets, favoring the SAA alone approach.

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Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Henrik Lumholdt
    • 1
  1. 1.Instituto de Empresa Business SchoolMadridSpain

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