Sulzberger Capital Advisors

Every industry has its jargon. The financial services industry is no exception. Two terms that many people do not understand are used quite often and are important in understanding how your money will be managed: strategic assets allocation and tactical asset allocation.

What is strategic asset allocation?

Strategic asset allocation is a portfolio strategy that involves setting target allocations for various asset classes, and periodically rebalancing the portfolio back to the original allocations when they deviate significantly from the initial settings due to differing returns from the various assets in the portfolio.

What is tactical asset allocation? 

I think it is important for investors to understand the strategy they currently have with their investment advisor. Questions to ask include the following:

1. Who makes the asset allocation decisions for my portfolio?
2. What is the skill set of the people involved in this decision?
3. Are the decision-makers independent and can they make unbiased decisions?

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