Allocation & Performance Updates
January, 2021
- Our current general recommended asset allocation is 60-65% equities, stable from recent levels; 20-25% bonds, stable from recent levels; and 10-20% cash stable from recent levels.
- Standard & Poor's 500 corporate earnings per share are expected to be down 14.2% for the full year 2020 vs. 2019 on a consensus analyst estimate basis, per Yardeni Research at https://www.yardeni.com/pub/yriearningsforecast.pdf . They are expected to be up over 25.0% in 2021 on a consensus basis according to Yardini Research. Year-over-year twelve month trailing earnings growth is expected to trough in the first quarter of 2021. It is expected to decline through then, and then be at the above referenced positive growth level for the full year of 2021. Again, all on a consensus basis per Yardini Research.
- General domestic equity markets have now rebounded to achieve all-time highs from corona virus impact lows in March of 2020. This is due to changing expectations regarding economic and corporate profit growth, consistent with the above 2020 and 2021 observations.
- Our moderate and aggressive balanced benchmark accounts were up 23.00% and 28.83%, respectively, year-to-date through December, 2020. They were up 12.63% and 18.74%, respectively in 2019. Please see our Performance Data Sources section for appropriate benchmark comparison sources. We continue to assess our asset allocation percentages relative to growth expectations and market conditions on a regular basis.