Mark Vaselkiv: For the last decade or so, particularly since the financial crisis, we have seen fixed income as a capital appreciation and wealth creation vehicle. Now the focus is shifting more toward capital preservation and reducing portfolio volatility.
For example, if you are managing a broad portfolio of stocks and bonds, your biggest dilemma would be the enormous increase in the value of risk assets, particularly equities. Investors are looking today for strategies in fixed income that are essentially uncorrelated with equities. That is really the big question. On the T. Rowe Price asset allocation committee, we've grown increasingly concerned about the valuations for stocks, and we believe this is a good time to add more balance in your portfolio.