RT Journal Article SR Electronic T1 Active versus Passive Strategies for EAFE and the S&P 500 JF The Journal of Portfolio Management FD Institutional Investor Journals SP 51 OP 60 DO 10.3905/jpm.2004.51 VO 30 IS 4 A1 Bala G Arshanapalli A1 Lorne N. Switzer A1 Loretta T.S. Hung YR 2004 UL https://pm-research.com/content/30/4/51.abstract AB The authors establish a dynamic asset allocation strategy investing in EAFE and the S&P 500 indexes to time the market and generate a superior abnormal return on a portfolio. A prediction model built on public information variables can forecast the upcoming movements of the two indexes for 1978 through 1999. Even with transaction costs, out-of-sample tests show an investor can rely on model signals to allocate assets between the indexes and produce significantly more terminal wealth than would passive portfolios invested in either index alone.