Let’s say you have portfolio that invests in four asset classes: stocks, bonds, cash, and alternatives. The goal of the portfolio is simply to outperform the broad, global equity market (MSCI All Country World Index) over a multiple year time frame. With the proliferation of ETFs in the marketplace, the average investor can now effectively create a diversified global portfolio with just a few trades.

Equities:

• The US continues to outperform (including all cap sizes)
• China, India, and Indonesia look intriguing if one wants to add global exposure
• 

• We said it last week and we will say it again, long duration government plays seem like the only option at the moment
• Credit doesn’t look compelling; same goes for munis

• Keep it VERY simple here

• Commodities as a whole don’t look great but there are a few exceptions
• REITS need to hold support here