TAC vs RM Which Outperforms?

When it comes to investing in stocks, choosing between traditional asset allocation strategies like TAC (tactical asset allocation) and more modern approaches like RM (risk management) can be a challenge. TAC involves adjusting the allocation of assets based on market conditions and economic forecasts, while RM focuses on managing risk through diversification and hedging strategies. Both approaches have their strengths and weaknesses, making it crucial for investors to carefully consider their goals and risk tolerance before deciding which strategy is right for them.

TAC or RM?

When comparing TAC and RM, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between TAC and RM.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. TAC has a dividend yield of 2.5%, while RM has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. TAC reports a 5-year dividend growth of -3.04% year and a payout ratio of 0.00%. On the other hand, RM reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with TAC P/E ratio at 19.70 and RM's P/E ratio at -1.75. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. TAC P/B ratio is 0.57 while RM's P/B ratio is 6.71.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, TAC has seen a 5-year revenue growth of -0.05%, while RM's is -0.13%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with TAC's ROE at 3.06% and RM's ROE at -311.10%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ¥199.00 for TAC and £87.50 for RM. Over the past year, TAC's prices ranged from ¥155.00 to ¥269.00, with a yearly change of 73.55%. RM's prices fluctuated between £51.00 and £106.00, with a yearly change of 107.84%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.