Quantitative easing began in 2008 in response to a global economic meltdown. It is a bailout that has been criticized by Fred Thompson and many others, but one pundit justifies it as follows: "If you have to pee on the fire to put it out, you can't worry about cleaning up the pee."
There's no denying that bond markets are being manipulated, and no one knows what the final outcome (cleaning up the pee) will be. This has generated great interest in market timing, and the various related asset allocation strategies that are akin to market timing. In the following, I lay out the various alternatives and their applications.
- Timing is predicting future prices. Modeling systems seek to identify price patterns that can be extended into the future. Timing is a crystal ball endeavor.
- Tactical Asset Allocation ((TAA)) identifies current mis-pricings and is usually used in conjunction with strategic asset
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