Weekly Research Insights - A Simple and Effective Tactical Allocation Strategy

Dynamic Rotation Between Equities and Defensive Assets

Hi there. In this week’s Research Insights, I replicate and discuss a recent research paper that presents a simple yet effective tactical allocation strategy rotating between equities, bonds, commodities, and currencies. The approach is easy to implement and has historically delivered returns comparable to SPY, but with much lower volatility and smaller drawdowns.

For investors with a higher risk appetite, I also test a leveraged version that delivers substantially higher performance than SPY while maintaining a similar level of volatility.

More details below.