Allocation & Performance Updates

July, 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, 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 almost 16% year-to-year during the first quarter of 2019 on a 12-month trailing basis, This was the tenth quarter of growth by this measure in the past fifteen.  It was the twelfth 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 more than 10% over the next 4 quarters (through 06/20) per Standard and Poor's estimates.  This is an increase from earlier estimates, and higher than low to mid-single digit estimates from other sources.


  • General domestic equity markets were hit significantly during the quarter ended on 6/30 due to recurring trade and tariff concerns. They have bounced back close to old year-to-date and new highs recently.  They appear to be signaling confidence about potential corporate profit growth resuming, after what is generally thought to be a current slowing of same.  The Federal Reserve has backed off of its increasing rate stance, and has also provided relief to equity and bond markets. 

  • Our moderate and aggressive balanced benchmark accounts were up 7.88% and 11.93%, respectively, year-to-date through June, 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