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Tactical Asset Allocation (TAA)

Definition:

Portfolio strategy that allows active departures from the normal asset mix according to specified objective measures of value. Often called active management. It involves forecasting asset returns, volatilities, and correlations. The forecasted variables may be functions of fundamental variables, economic variables, or even technical variables.

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Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

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Growth stock

Common stock of a company that has an opportunity to invest money and earn more than the opportunity cost of capital.

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