U.S. Large Cap Equity

Rating: Neutral

We believe Large Cap Equities are fairly valued. Our preference is growth over value. We believe a slight overweight allocation is appropriate given current economic conditions. Growth stocks are usually the primary beneficiaries in a recovering economy.

U.S. Mid Cap Equity

Rating: Slight Underweight

We believe mid-cap valuations are on the upper end of the traditional range and other categories offer a better value.

U.S. Small Cap Equity

Rating: Slight Overweight

We see opportunity as small companies are hitting a sweet spot in the U.S. economic recovery. M&A activity is picking up. Hiring is accelerating rapidly and new technologies are being developed regularly. Even as rates continue to go up they are still historically low, which is beneficial to this group.

Non-U.S. Developed Market Equity


One of our largest overweight’s. Valuations are extremely attractive as the recovery for International companies is in its early stages. The ECB seems determined to take an active approach to stimulate economic growth.

Non-U.S. Emerging Market Equity

Rating: Slight Overweight

Demand for goods and services in Emerging Market countries is strong. The continued growth and need for everyday products and technology should boost company profits.


Investment Grade Long Term Fixed Income

Rating: Underweight

The Federal Reserve has been clear that they will continue to raise interest rates. We believe the longer end of the yield curve may take the worst of the price decline in the fixed income space.

Investment Grade Interm Term Fixed Income

Rating: Underweight

Again our concern with rising interest rates gives us concern even in the intermediate term fixed income space. Exposure to 5-10 year bonds can provide a higher level of income which could help manage the impact of rising rates, however, seeing a positive return after inflation isn’t likely.

Investment Grade Short Term Fixed Income

Rating: Slight Overweight

In a rising interest rate environment, the short end of the yield curve normally feels the least impact. We prefer low duration bonds for our fixed income allocation.

Non-Investment Grade Fixed Income (High Yield)

Rating: Neutral

We believe tightening spreads discourages exposure to high yield because investors aren’t compensated for the risk they are taking. In historical rising rate periods, high yield has been amongst the bond sectors that has performed well. We remain neutral in our exposure to this sector and will keep a close watch on spreads.

Global (non-U.S.) Fixed Income

Rating: Neutral

Easy foreign monetary policy could lead to yield compression which is positive for bond prices. We favor exposure in local currency to avoid the potential threat of a rising dollar. We believe low correlation to the U.S. bond market makes global bonds a better option in this category.

Multi-Sector Bond

Rating: Underweight

Allowing more manager discretion can make understanding interest rate risk very difficult. Because our view is that rates will continue to go up we are actively selecting our own bond holdings to keep maturity short and duration low.


Real Estate

Rating: Underweight

Real Estate prices seemed have topped and finally are showing signs of slowing down. As rates continue to increase consumers will be buying lower priced homes to fit into their budgets. Other yield assets begin looking more attractive as rates rise.


Rating: Overweight

We feel valuations are attractive. With inflation on the horizon and upward pressure by the Federal Reserve, we feel this is an ignored asset class with good upside. Commodities have underperformed for the past several years and we believe the time to invest is upon us.


Rating: Slight Underweight

Cash yields remain extremely low as the Federal Reserve maintains their low for long interest rate policy. Maintaining an appropriate level of cash is important, however holding too much cash ensures a negative real return in a low interest rate environment.

Any opinions are those of Billy Peterson and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Past performance may not be indicative of future results. There is no assurance that any investment strategy will be successful or that any of the forecasts mentioned will occur. Investing involves risk and investors may incur a profit or a loss. Asset allocation and diversification do not ensure a profit or protect against a loss. Dividends are not guaranteed and must be authorized by the company’s board of directors. Sector investments are companies engaged in business related to a specific sector. They are subject to fierce competition and their products and services may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification. International investing involves special risks, including currency fluctuations, different financial accounting standards, and possible political and economic volatility. Investing in emerging and frontier markets can be riskier than investing in well-established foreign markets. Investing in small and mid-cap stocks generally involves greater risks, and therefore, may not be appropriate for every investor. There is an inverse relationship between interest rate movements and fixed income prices. Generally, when interest rates rise, fixed income prices fall and when interest rates fall, fixed income prices rise. High-yield bonds are not suitable for all investors. The risk of default may increase due to changes in the issuer’s credit quality. Price changes may occur due to changes in interest rates and the liquidity of the bond. When appropriate, these bonds should only comprise a modest portion of your portfolio. Commodities and currencies are generally considered speculative because of the significant potential for investment loss. They are volatile investments and should only form a small part of a diversified portfolio. Markets for precious metals and other commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. The process of rebalancing may carry tax consequences. Investments and strategies mentioned may not be suitable for all investors.

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