The pace of economic recovery has slowed based on our analysis of incoming data. The WCA Fundamental Conditions Index™, which evaluates changes in thirty different measures of financial and economic conditions, has slipped to a current reading near 65 from above 80 earlier this year (chart below). So long as this downward trend persists, a tactical portfolio posture with a somewhat broader diversification and closer to a neutral “risk / return” posture is appropriate. The shift was accomplished primarily through a modest increase in bond allocations beginning in May.