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(1) Dividing investment funds among markets to achieve diversification or a combination of expected return and risk that is consistent with the investor's objective. (2) A value-oriented investment strategy which attempts to take long positions in markets or market sectors where prices appear to be low and to reduce positions, or take short positions in markets or market sectors where prices appear to be high. Tactical (TAA) or strategic (SAA) asset allocation advocates and value seeking portfolio managers often use similar techniques and policies. In contrast to momentum investors who accentuate market trends, most asset allocators' trades tend to offset destabilizing market movements and counteract price and rate fluctuations. The asset allocator tends to buy when prices decline and sell when prices rise. For contrast see Momentum Investor. See also Dynamic Asset Allocation, Tactical Asset Allocation (TAA), Strategic Asset Allocation (SAA).
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