We have three strategic asset-allocation models, based on risk-tolerance: Conservative, Growth, and Aggressive. The following is a discussion of the growth segment. Equity investors have enjoyed 2024, with a year-to-date gain in the S&P 500 of about 20%. The fixed-income benchmark ETF AGG has risen 2.0%. Our Stock-Bond Barometer modestly favors stocks over bonds for long-term positioning. In other words, these asset classes should be near their target weights in diversified portfolios, with a slight tilt toward equities given the recent decline in interest rates. We are over-weight large-caps, despite a recent surge by small-caps. We favor large-caps for growth and financial strength, while small-caps offer value. Our recommended exposure to small- and mid-caps is 10%-15% of equity allocation, below the benchmark weighting. U.S. stocks have outperformed global stocks over the trailing one- and five-year periods. We expect this trend to continue, given volatile global economic, political, geopolitical and currency conditions. That said, international stocks offer favorable near-term valuations, and we target 5%-10% of equity exposure to the group. Growth has rebounded in 2024, outperforming value as interest rates stabilized. Over the longer term, we anticipate that growth, led by the IT and Healthcare sectors, will top returns from value, led by Energy and Materials, due to favorable secular, demographic, and regulatory trends. Given the early stage of the current bull market, we think alternatives are less desirable in the growth portion of our asset-allocation models. Our recommended weighting is 0%-2%. Now that the SEC has approved a Bitcoin ETF and the cryptocurrency market cap has topped $2 trillion, we will consider a Bitcoin ETF for a small weighting in our Aggressive model.

Value stocks -- a market segment that includes high-yield stocks -- outperformed growth stocks in 2022. That's a recent rarity, as for the past decade-plus, the performance record has favored growth. But in 2022, The rollout of COVID-19 vaccines gave a lift to some of the cyclical companies (energy and regional banks) that had lagged in recent quarters, and value stocks outpaced growth stocks that year. While growth stocks have retaken the lead since 2023, the Federal Reserve continues to keep interest rates high to fend off inflation. This could possibly cap multiple expansion for growth companies in coming quarters. In any event, the value sector is the place to achieve income.

IBM looks to be a part of every aspect of an enterprise’s IT needs. The company primarily sells software, IT services, consulting, and hardware. IBM operates in 175 countries and employs approximately 350,000 people. The company has a robust roster of 80,000 business partners to service 5,200 clients—which includes 95% of all Fortune 500. While IBM is a B2B company, IBM’s outward impact is substantial. For example, IBM manages 90% of all credit card transactions globally and is responsible for 50% of all wireless connections in the world.

IBM looks to be a part of every aspect of an enterprise’s IT needs. The company primarily sells software, IT services, consulting, and hardware. IBM operates in 175 countries and employs approximately 350,000 people. The company has a robust roster of 80,000 business partners to service 5,200 clients—which includes 95% of all Fortune 500. While IBM is a B2B company, IBM’s outward impact is substantial. For example, IBM manages 90% of all credit card transactions globally and is responsible for 50% of all wireless connections in the world.