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News & Resources

July 31, 2013

Third Quarter Commences with a Strong Outlook for Equities

The S&P 500 Stock Index has gained 13.9% thus far this year, including dividends, and the Barclays Intermediate U.S. Treasury Bond Index has decreased 1.3% as interest rates have jumped up recently.

This year’s third quarter has begun with an apparent tailwind for equities and a headwind for bonds. In light of the asset allocation guidelines specific to each portfolio, we are prudently making adjustments to security holdings in the current market environment. We maintain our bias for equities as the better investment over the long term, and we continue to be defensive on the fixed income side by seeking to limit interest rate risk and credit risk. At long last interest rates have risen and may continue to rise somewhat following many years of mostly declining. While this presents some challenges, we believe that our conservative approach to portfolio management should continue to serve our clients well.

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