Allocation & Performance Updates

May, 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 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 more than 10% over the next 4 quarters (through 03/19) per Standard and Poor's estimates.  This is an increase from earlier estimates, and higher than mid-single digit estimates from other sources.


  • General domestic equity markets have not looked back for any significant time this year, since beginning a fairly sharp recovery after declines late last year. 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 backing off of its increasing rate stance, has also provided relief to equity and bond markets. 

  • Our moderate and aggressive balanced benchmark accounts were up 7.16% and 10.89%, respectively, year-to-date through April, 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