Economist David Bostian is advising investors to shift an additional 5% of assets from stocks into cash. The new asset allocation recommended for balanced accounts is 30% cash, 30% bonds, 20% stocks, 10% international financial assets and 10% gold or gold stocks. The recommendations are based on his macroeconomic index, which ``has never been wrong,'' Mr. Bostian said, and signals a recession ahead, making corporate profits vulnerable.
It also is based on his measure of equity valuations relative to GDP, which stands at 80%, approximately equal to its 1968 high.
At the end of 1994, he recommended investors stay fully invested.
