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Asset Allocation Committee Outlook: 3Q15

The Business Cycle—Middle-Aged or Elderly?

When it comes to the duration of the business cycle, 50 is the new 40. Much the way that better diet, health care and exercise have helped double life expectancy over the past century, central banks have prolonged the current expansion using new elixirs such as zero interest rates and quantitative easing. When the Asset Allocation Committee met recently to update our views for the coming 12 months, we concluded that this “generational extension” of the business cycle is likely to sustain an environment in which investors are compensated for holding risky assets—at least while the cycle continues.

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