Review & Outlook

Our take on the investing, financial, & economic themes of the day

The Allocation Between Stocks and Bonds

6 October, 2010 by admin in Philosophy

We compare the current ratio of stock earnings to corporate bond yields with the historical record of that ratio over the last sixty years. This comparison informs our judgment that stocks are a better value than bonds, or vice versa. This discipline relies on reported historical relationships and not forecasts. We also consider a client’s tax, legal and income requirements in recommending an appropriate allocation.