Tactical Strategy

We created a model for this strategy back in 2007 and it became very popular with its shift to defense in 2008.

What is a Tactical Investment Strategy and Why do you Need One?

Tactical strategies have been around for a long time.

A tactical asset allocation is an active management portfolio strategy that shifts the percentage of assets from stocks to bonds to cash/money market funds depending upon certain risk factors. This strategy is used to maximize portfolio returns while keeping market risk to a minimum, as compared to an investment benchmark. Tactical strategies have been around for a long time, but recently when the stock market began an extended run to the upside, many investors abandoned this concept.

At Englebert Financial Advisers, we run a tactical strategy for our clients. We implement this strategy in our 401k and 457 plans, as well. On December 23rd, 2019 our tactical strategy adjusted 100% to money market funds. Our risk indicators were elevated and by selling stocks and moving into cash, we reduced our clients’ overall risk.

Do you have a 401k/403b/457 Plan? Does your plan offer a Tactical Model as one of the investment options? If not, let's have a conversation about it! Check out this chart which shows how Englebert Financial Advisers uses a Tactical Strategy to help mitigate risk for a participant in a down market and take advantage of an up market to increase returns. It's like training wheels on a bike...it helps provide stability to a portfolio during market volatility.

Chris Englebert, Founding Partner & Chief Investment Officer

Why a Tactical Strategy is so Important!

History of the EFA Tactical Strategy

We created a model for this strategy back in 2007 and it became very popular with its shift to defense in 2008. In March of 2009, this model adjusted 100% to equites and captured the equity market recovery from the 2008 Financial Crisis. Flash forward to 2018. Our tactical strategy was defensive the entire year and avoided the sharp decline in the US equity markets during December of 2018. In January of 2019, our tactical strategy adjusted the balance to 75% stocks and 25% money funds. The US equity markets began an extended run to the upside. During the month of May of 2019, the S&P 500 pulled back 7%. Our tactical strategy remained invested since our risk indicators were still low.

If you would like to add a tactical asset allocation as part of your overall investment strategy, please contact us.

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