Document Type

Investment Portfolio

Publication Date



The primary difference between this and last year is that the markets appear to support the recovery. Last year market performance lagged behind the nascent recovery. Eventually headwinds from Greece and the developing world caused a flight to quality that suppressed market activity even as the US economy grew slowly. This year we are looking at a significantly more confident capital market. Some of the fears stemming from the European debt crisis have abated. Employment has stabilized significantly. The market has spent the better part of 2012 growing with renewed confidence. Moreover, the growth has resembled a classic recovery, with highly cyclical sectors taking the lead. Based on our confidence in the new market we have opted to maintain our recovery‐oriented sector allocation, while keeping within the boundaries if the ISP. We are recommending that the portfolio tilt its allocation in favor of cyclical sectors such as consumer discretionary, while shifting away from counter cyclical sectors such as telecommunications. By doing so, we should be able to take advantage of the market growth of the recovery.