Equity markets are down quite heavily for the month to date. That comes after a very strong prior 3 and 6 month stretch.

There’s no need to do anything, intra year drawdowns of 10% are quite common, and pullbacks after strong runs are also quite common.

Despite being unpleasant, that volatility is precisely why the returns to stocks are so outsized in the first place (i.e., why the equity risk premium is so large in the first instance).

So, we’d suggest stocks would have to fall further, before we’d look to allocate capital on a DAA basis. They might get there, or, they might not.

We’ll see. The current bout of unease has to do with a) rising yields, causing problems in places outside the US, but affecting risky assets everywhere b) geopolitical risks in the Middle East (see the move in the price of oil today).

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