Allocation & Performance Updates


December, 2018

  • Our current recommended asset allocation is 70% equities,  a slight increase from recent levels;  20% bonds, a decrease from recent levels; and 10% cash, stable from recent levels.  Equity and bond allocations may have to come down if interest rates continue to rise and corporate growth expectations continue to deteriorate.


  • Corporate profit growth rates are now reported to have grown almost  20% year-to-year during the third quarter of 2018 on a 12-month trailing basis, This was the eighth quarter of growth by this measure in the past thirteen.  It was the tenth 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% over the next 4 quarters (through 12/19) due to tax cuts and continued economic growth per Standard and Poor's estimates.  Other various sources are projecting more conservative growth, as low as mid-single digits.


  • General equity markets and bond markets have become more volatile as profit growth sustainability in the face of increasing interest rates has become more controversial. Treasury and investment grade corporate bond markets have recently continued to struggle as interest rates have risen.  Rate increases may subside if growth prospects continue to decline.  High yield corporate bond markets are still holding up relatively well. (See the performance Data Sources section of this website.)  

  • Our moderate and aggressive balanced benchmark accounts were up 3.86% and 2.14%, respectively, year-to-date through November, 2018.  They were up  16.60% and 22.24%, respectively in 2017. 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