Even as stock markets around the world plunge in vicious bear markets, those investors who are adept at financial portfolio management, neatly side-step the losses and position their portfolios for the inevitable bull market. Financial portfolio management is about more than asset allocation and rebalancing, as the investment world is not static and its moods will favor one sector or the other over time, and only a nimble investor can take the ride to riches offered by the stock markets around the world.

Significant overweighting and underweighting different investment sectors, including Cash, Currencies, Precious Metals, Commodities as well as the usual bond, real-estate and stock sectors is key to long term wealth building through nimble and active financial portfolio management.

When you or I exchange our services with another person or business for cash denominated in a certain currency, we are taking an asset that is a storehouse of certain value -using which we can procure other assets. Thus if we get paid US $100 or Euro 80 for an hour of our work, we are indeed getting our hands on an asset - in this case, cash, that has a certain value as of today. Going forward, the value of that asset with respect to other assets in the economy may rise or fall depending on economic conditions, inflationary or deflationary environment, and the strength of the currency itself.

Other assets such as stocks of individual companies also rise or fall based on a variety of factors - including general economic conditions, geo-political considerations, company performance and so forth. Bonds, commodities and other investable assets have a similar lifecycle and their value relative to other assets fluctuates in a similar fashion, though not in the same cycle.

Asset allocation advises us to put a certain percentage of our money in all of these assets so that over time, the portfolio continues to grow in one sector or another. However, most asset allocation models tend to be quite static in their approach, while the investment world is rather dynamic.

While it is true that as one sector, say precious metals, outperforms other sectors, its percentage in the portfolio would naturally increase - it does not actually let you take advantage of that bull market in precious metals. Since there is usually a bull market in one sector or another - it is far better to be nimble and amply overweight oneself in that sector and underweight in other sectors so that one can ride the bull market in that sector all the way up.

In fact, it is fair to say that one should hardly ever follow the idealized asset allocation model except when one cannot trade as needed or one wants to totally ignore the financial portfolio.

Following the tenets of applying knowledge of Fundamentals, Technical Analysis and Market Psychology - one can get into a bull market, including in Cash, when it is still young, and get off as it begins to age. Nimble investors were in Cash when the markets collapsed in the early 1970s, early 2000 and then again in 2008. And they were back in other assets such as stocks and bonds when the bull market in those sectors took off.

There is always a bull market somewhere - if nowhere else, then in Cash in the appropriate Currency. Overweight and ride that sector to riches.

Happy investing in all Markets!