The AIA is a product of the theory of adaptive market hypothesis (AMH) proposed by Lo (2004, 2005, 2012).
The notion is that in the case that all fundamental information is utilized; an investor can gain no benefit from trying to time the market.
The practice can be useful when the market is in an upswing, but it can lead to large losses occasionally that can destroy investors' wealth and confidence.
The understanding of this concept can help investors take advantage of arbitrage opportunities and time the market more effectively.
The Adaptive Investment Approach possesses the ability to assist individuals that are attempting to gain favorable returns while simultaneously focusing on capital preservation.