Tomorrow’s report on personal consumption spending for December is projected to show a gain of 0.3% vs. the previous month, based on The Capital Spectator’s median econometric forecast. That’s below the previously released 0.5% increase for November. Meanwhile, the Capital Spectator’s median forecast for December is slightly above three consensus predictions based on surveys of economists.
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Carl Richards takes a poke at tactical asset allocation (TAA) in a recent column in The New York Times. The financial planner reprises a familiar criticism of TAA, advising investors to “forget market timing, and stick to a balanced fund.” TAA, he asserts, is just market timing with a fresh coat of marketing paint. The reasoning behind his critique: it’s hard to beat the market (or a passive asset allocation mix) over time. Agreed. We should be wary of hubris when it comes to expectations of what we can achieve by outsmarting everyone else. But what Richards doesn’t discuss is the all-important gray area between the extremes of aggressive market timing and a quasi buy-and-hold strategy that purports to relieve you of the task of rebalancing, which some may call market timing.
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