The challenging market environment in the first half of the year continued into the third quarter as all major US stock indices declined to bear market territory (-20% from peak-level). Bonds also fell further, contributing to the worst year for the Bloomberg US Aggregate Bond Index since our data began in 1996. While the prior few years we have been focusing primarily on efficiency, this year our focus has turned to resilience – both in terms of how our portfolios are allocated across major asset classes (stocks, bonds, real assets, and cash), and in the durability of the entities (companies and countries) in which we invest. In this quarter’s commentary we survey the current market environment, discuss the forces impacting primary market drivers, and define how the concept of resilience factors into our management of your portfolios…
