Allocation & Performance Updates
October, 2020
- Our current general recommended asset allocation is 60-65% equities, up from recent levels; 20-25% bonds, down from recent levels; and 10-20% cash stable vs. recent levels.
- Standard & Poor's 500 corporate earnings per share are expected to be down 20.0% 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 27.9% in 2021 on a consensus basis according to Yardini Research. Year-over-year quarterly earnings growth is expected to have troughed in the second quarter of this year. It is expected to show less negative growth in the third and fourth quarters of this year, and the above referenced positive growth through 2021. Again, all on a consensus basis per Yardini Research.
- General domestic equity markets have now rebounded to prior to corona virus impacts. This is due to changing expectations regarding economic and corporate profit growth, consistent with the above 2020 and 2021 observations. Businesses are still reporting production and sales disruptions, and forecasters are still adjusting near-term growth expectations as conditions change.
- Our moderate and aggressive balanced benchmark accounts were up 13.07% and 15.32%, respectively, year-to-date through September, 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.