I’ve posted Entry #__ to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called The Difference Between a Model for Understanding How Stock Investing Works and an Investing Strategy.
Juicy Excerpt: The problem is that the people who engage in tactical asset allocation are not clear on when allocation changes should be made or how large they should be on how they will know whether the changes will be successful or not. I can easily imagine someone making a tactical shift downward when prices crashed in late 2008 and then another tactical shift upward when prices took off again (on grounds that the risk of a total economic collapse had passed). This is of course the opposite of the strategic shifts that a Valuation-Informed Indexer would make (we increase our allocations when prices drop and increase them when prices rise). But it is the sort of change that is made by someone who is thinking tactically rather than strategically.