Dynamic Asset Allocation

Current Assumptions based on:

S&P 500 Shiller CAPE: 38.45

CAPE Rank: 98%

Expected return on.stocks: 1%

Yield on 10 year Treasury Bond: 4.47%

Expected return on bonds: 4.47%

Optimal Mix: 20% Stocks, 80% Bonds

Expected Return Stocks/Bonds Mix: .2+3.58 = 3.78%

With expected returns on stocks at 1% due to high valuations, the optimal mix will take advantage of the 3% inflation rate and The Fed in no hurry to raise rates. An allocation to Municipal bonds for after tax retirement allocations is recommended.