The vast majority of investment portfolios are constructed through a passive approach to asset allocation. This is based on the belief that it's difficult, if not impossible, to out-perform the market on a consistent basis.
As a result, passive portfolios are built with a one-size-fits-all approach for all market conditions, much like a cookie cutter.
There may be several passive asset-allocation models for investors to consider, from conservative to aggressive. Yet once the passive strategy is set, for the most part it remains static—regardless of market behavior. A passive portfolio is only changed during periodic rebalancing to return the portfolio to its original allocation.
Niemann's use of tactical allocation, on the other hand, is based on the belief that there is, in fact, a better way to manage money—in direct response to movements in the market.
If large-cap stocks, for example, are currently out of favor and losing strength, tactical asset allocation allows us to move that money into a market theme, or investment choice, that is gaining strength.
This way, your money moves into market segments that maximize your opportunity to benefit from an upswing, while minimizing your exposure to the downturn.
Why Choose Tactical Management?
Tactical management is characterized by flexibility, changing the allocation of assets as market conditions change. Tactical managers can employ tools and alternatives that are unavailable within a passive strategy.
For example, tactical managers can:
- Underweight or overweight sectors, or simply avoid sectors entirely.
- Respond to the market by allocating among styles: large versus small cap, growth versus value, etc.
- Typically out-perform passive managers in down markets by shifting their portfolios, using defensive or protective strategies.
Clearly, in today's increasingly fluid market, tactical management offers you a significantly broader array of alternatives for responding to changes in the market.
Why Choose Niemann?
We offer four compelling reasons for investors to choose Niemann:
- Philosophy—The cornerstone of Niemann's investment philosophy is to manage risk in all market conditions. We always strive to err on the side of caution.
- Track Record—Historically, our results demonstrate the intelligence of our philosophy, both in up markets as well as down markets.
- Consistency—Our philosophy, our methodology, and our proprietary investment process have not changed since Niemann was founded. We believe our historical performance is the proof statement of our philosophy.
- Managing the Downside—When the market softens, navigate investments requires considerable skill. We have extensive experience managing downside risk. And in a bear market, nothing beats experience.