Allocation & Performance Updates


March, 2019

  • Our current recommended asset allocation is 50% equities,  a significant decrease from recent levels;  30% bonds, an increase from recent levels; and 20% cash, a decrease from recent levels.  Changes are due to a continuing decrease in potential corporate profit growth potential, with an accompanied change in Federal Reserve rhetoric about the need for raising rates in an uncertain growth environment.


  • Corporate profit growth rates are now reported to have grown over 20% year-to-year during the fourth quarter of 2018 on a 12-month trailing basis, This was the ninth quarter of growth by this measure in the past fourteen.  It was the eleventh quarter in a row of sequential growth since that measure began declining in the third quarter of 2014.  Profit growth is projected to be up around 10% or so over the next 4 quarters (through 12/19) per Standard and Poor's estimates.  This is an increase from earlier estimates, and higher than mid-single digit estimates from other sources.


  • General equity markets have become more volatile as profit growth sustainability has become more controversial. The Federal Reserve backing off of its increasing rate stance, has provided some relief to equity and bond markets. 

  • Our moderate and aggressive balanced benchmark accounts were up 4.69% and 7.53%, respectively, year-to-date through February, 2019.  They were down 1.30% and 2.28%, respectively in 2018.  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. 

  • BKS