The idea is to emphasize certain types of funds with the goal of either boosting your portfolio's return or reducing its risk. Similarly, academic studies suggest that both small stocks and value stocks tend to generate market-beating returns, so you might want to tilt your portfolio toward those sectors. If you are going to style tilt, I would tilt toward value. Think about overweighting larger U.S. stocks and favoring both growth and value funds that emphasize dividend-paying shares. These sorts of funds may be particularly appealing to retirees who are living off their portfolios.
Some investors take style tilting one step further and engage in sector rotation.
Other investors try their hand at market timing, which involves flitting between stock funds and more conservative investments in an attempt to catch bull markets and sidestep market declines. Both market timing and sector rotating, while appealing in theory, are enormously difficult to put into practice. As the rapidly gyrating market of the past few months has made clear, you need to be both nimble and prescient to make money by calling turns in the market. With these people, it's a hobby. They like picking up the phone and making switches.