October 1, 2017 (Ridgewood, NJ) – Nationally recognized investment advisory firm, Advisors Capital Management (ACM), is pleased to announce two addition tactical strategies.
ACM’s latest Tactical Strategies are carefully selected ETF or individual stock and bond portfolios utilizing a proprietary backtested algorithm that estimates the future health of the overall economy. This is combined with the experience and knowledge of a portfolio manager to interpret and implement the results of the algorithm.
The idea of taking on more risk with your investments when times are good and reducing risk as economic prosperity begins to wane is the bases for this proprietary overlay and security selection. Generally speaking, the stock market will reflect the economic conditions of an economy. If an economy is growing then output should be increasing and most companies should be experiencing increased profitability. This higher profit makes the company shares more attractive. If the economy is entering into a recession, then stock markets will generally fall. This is because a recession can mean lower profits.
Our Tactical Strategies are designed to be fully invested in higher beta ETFs or stocks during periods of economic expansion. If the economy is growing the use of higher beta securities should afford the portfolio to have the best opportunity to capitalize on any potential growth.
Conversely, when ACM’s monitoring algorithm suggests weakening economic growth, it is designed to rebalance portfolio construction to lower beta securities and to seek safer allocations in treasuries should economic conditions warrant preservation of capital.
ACM’s Tactical Strategies will fluctuate between periods of high volatility where the market movement will be amplified to periods of low volatility where market moves will be muted. Based upon historical back-testing that the strategy will average being invested in 80% equity and 20% fixed income although it can range from 100% equities to 100% bonds based upon economic circumstances. The most common allocation will be 100% equities.
Our Tactical strategies will not respond to daily headline risk and the noise affecting markets but will focus specifically on data related to estimated near-future economic conditions. A few dozen data sets from sources including the Federal Reserve and Labor Department, among others are utilized to determine the overall health of the economy.
