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With the Turbulensi Marketing Tactical Asset Allocation

With the Turbulensi Marketing Tactical Asset Allocation

Travel financial investment more than half the six months of this year (2008) colored by turbulensi large enough along with the development of the global extreme enough. World crude oil prices and economic decline that the United States to become the dominant factors that influence the kemerosoton investment in capital markets, commodity markets and global foreign exchange market.

Stock exchanges in Asia, America and Europe at this time tend to move at all had fallen far from stock performance compared to the year 2007, these shocks occur again after the two companies distributor housing credit that is Freddie Mac and Fannie Mae, near bankruptcy and should be fed U.S. central bank. Similarly, the large banks in the bank predicted that the world will still be a loss because the decline in the U.S. property sector after the previous intervention has also been getting from the central bank billions of U.S. dollars.

The development of financial markets in the country are also clearly affected by global conditions, the pressure of inflation because of high oil prices, interest rates increase pressure and domestic pressure on the financial performance of the State Budget also affect the performance of stock market and bond market in Indonesia. Market share the first six months of this year's record performance of the return less brisk in the early years when JCI was opened in 2731 the level at this time (the position of the end of Pecan ago) closed at 2141 level or have been declining 21.6%. Similarly with the bond market has been down between 7-15% in line with inflation rising to above 11% and ekpetasi increase domestic interest rates further.

Share Price Performance Index Bei: Trend increase year 2006-2007, down trend First Six Months 2008.

Source: Reuters, treated with MetaStock

Associated with our financial investment, the first six months to skip one stock investment performance in general has decreased so as to investment bonds (market value decline). This condition is, of course, requires us to make a reassessment / minor readjustment of the Strategic Asset Allocation (Saa) which we have built in the early years with the development of an extreme view on the economic indicators and financial indicators. Readjustment is needed in order to improve the performance of the portfolio until the end of the year "for the" cut along six months ago. Under some conditions we can use this to reinforce the establishment of Tactical Asset Allocation in the condition turbulen in the financial markets, through the identification of drivers associated with the economic outlook what happens to the instrument-specific investment instruments in porofolio us.

At the time the world crude oil prices high / high inflation and the relative tendency of increase, the return of instruments such as T-Bills, SBI and money market instruments include short-term time deposits tends to increase. On the instrument, such as T-Bonds, Letters of debt countries tend to go down (market value).

Economic drivers                                       Asset Choice  

                                                                           Rising                   Falling
Inflation rate                                                    T-Bills, SBI           T-Bonds, SUN
Real interest rate                                            Equities                  T-Bonds, SUN
Inflation, Tax and regulation                         Small Cap              Large Cap
Inflation induced Tax Bracket creep            value stock            growth stock
Foreign exchange value of the Dollar           Domestic                Foreign

At the time the United States economic growth is still sluggish economic growth in Asia and in line with expectations, the trend of its U.S. dollar exchange rate will be depressed. This condition is also encouraging choice in domestic assets become relatively attractive, especially on investment or equity shares, tend to be volatile affected weakening U.S. economic growth. However, in the middle of situations, stock options based on the commodity sectors, such as mining and agriculture in general, be interesting portfolio enhancer (the relationship between the other indicators with the other investment options can be seen in the table above).

With the goal to make our portfolio optimization, the tactical asset allocation strategies, namely to do with the percentage of asset-rebalancing asset portfolio organizer, such as deposits, stocks, bonds, structured products, mutual funds, foreign currency, etc., with the goal of utilizing the opportunity of anomalies or weakening conditions and increased asset class specific.

In general there are three main methods of decision-making in the tactical asset allocation strategies, namely: first, a review of all the fundamental analysis of investment instruments in the portfolio (such as shares seen again, if the shares in the portfolio are still undervalued / overvalued views of the price to earning ratio, price to book value ratio, dividend yield, discounted cash flow model).

If shares in a portfolio is overvalued, you should be switching to the switch and enter the other shares that are still undervalued in the portfolio. For analysis of bond instruments, should also see whether the current market price of bonds is much lower than the price instrinsik with its long term benchmark interest rate.

If such conditions at this time, the price of bonds is very low, then it is a good timing to increase the share of bonds in the portfolio, both corporate bonds and SUN, or averaging.

Second method is the technical analysis of the instruments in the investment portfolio for the short-term trends in secondary movement, so that it can be predicted instruments that have very potential uptrend / downtrend.

Technical analysis can be done with the top-down method, the technical analysis on the sectoral / industry sector to find out where the middle in short-term move will go up. After the technical analysis on the individual instruments in the sector to determine the stock / bonds / other instruments which have the potential short-term uptrend middle.

Third method is the analysis of behavioral finance, the analysis of financial market analysis with the behavior of investor sentiment in the stock market, bonds, currency, commodities, etc.. How are behavioral intermarket movement between various instruments. Bullish / bearish consensus, to determine which instruments are overreacting positive / negative, so that opportunity can be obtained on the investment conditions are bearish or bullish.

The three methods above, will be more powerful when used together in tactical decision-making strategy, and effects are expected to provide increased investment return in the middle of the optimal turbulensi. Review fundamental instrument to determine which of its good fundamental prospects, review technical analysis to determine the investment instrument which will be moving ride / down in the short middle, review and analysis of behavior finance to determine which investment instruments that have technical and fundamental analysis, which is irrational akan an overreaction.

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