investors of all sizes and experience levels to more
frequently ask the question, “Is my current
investment policy and
allocation going to
allow my capital
to safely reach
our return
assumptions?”
The answer and
outcome to this question impacts us
all as the financial markets in which we invest are being
influenced more by politicians and central bankers than
at any other time since the 1930s.
Past results should be viewed in
their appropriate context... the
question should be asked and
analyzed as to whether or not
the conditions that existed in the
past are still present or not and
if so, are those conditions likely
to remain in the future.”
Individual markets can and do change dramatically
as conditions change. Therefore, the outperforming
asset class of choice today should not necessarily
be assumed to be the favored asset class for
tomorrow.
• The out of favor asset class of today is unlikely to
stay out of favor forever.
• The odds of at least a 20% decline in stocks
sometime in the first half of 2013 is increasingly
likely as global growth continues to slow and a
number of fiscal cliff related impacts come in to
play.
• I would suggest underweighting your normal risk
level of risk in equity exposure at current prices
while being willing to adjust accordingly if
prices/valuations improve in coming months and
quarters.
