Dynamic Asset Allocation

Abstract

© 1998, Society of Asset Allocators and Fund Timers, Inc. diversification across hundreds of securities within each asset class and allowing investors to move assets overnight between funds with little or no cost. • Bear markets really do exist. Properly implemented, a dynamic asset allocation strategy should lessen an investor’s exposure to declining markets, blunting the impact of bear markets and preserving capital and the majority of prior gains. The more investors lose money in a down market, the more they lose valuable time and opportunity. A look at the bear markets of the past 110 years shows that investors spent 76% of their time suffering through bear markets and the struggle back to breakeven. Only 24% of their time was spent increasing their original investment.