Our portfolios have an overweight to international developed stock
markets, based primarily on relative valuation. We have focused most of
our discussion of that overweight on equity opportunities in Europe, but
we are also constructive on Japan
Historically, productivity has tended to increase during economic
upswings as companies use their rising profits to invest capital back
into their businesses and to expand their payrolls. The current economic
recovery, however, has not followed that path.