We believe that reducing or 'tapering' the Federal Reserve's bond purchases will ultimately be a good thing for stocks, especially since the Fed has make it clear that changes to its bond purchase program (QE3) will be "data dependent." It is good news that the private sector is growing strongly enough to offset government cutbacks; it is good news that the unemployment rate is coming down; and it is especially good news that all of this is occurring with inflation well below the Fed's target level of 2%, in our view. Except for the ongoing low inflation, none of this is good news for the bond market. (see The Weekly View - "The Bond Investor's Dilemma: Heads You Lose, Tails You Still Lose, " 6/6/13)

David Fuller's view I agree that equities are much less risky than bonds over the medium term, although shares are more volatile. In the current environment, I would only buy equities on weakness. Some investors may also wish to lighten their equity portfolios on rallies, as the currently choppy environment is likely to continue.