Macroeconomic events and the anticipation for policy changes from ECB and the Fed continue to roil markets and returns among asset classes continue to exhibit high volatility. After July’s positive month for equity returns, so far we find August is shaping up to be another good month. Both U.S. Equities and Non-U.S. Equities climbed higher fueled by marginally positive economic data and hopes for QE3. Many bond asset classes have experienced small negative returns in August as yields inched higher. Our fundamental tactical team is more constructive following a recent upturn in investor sentiment, expectations, and positioning, reducing some of the riskiness of stocks. However, top down measures for U.S. stocks still have some way to go before we become strongly bullish.

US Equity markets are enjoying another month of positive returns in March, continuing an impressive streak of positive performance with strong momentum. The S&P 500 has had positive returns in nine of the last ten months (including March). This is a continuation of the bull market that (ignoring the Euro-crisis pullback in Q3 2011 and a few other negative months) started in March 2009. US markets absorbed the passing of the first sequestration related budget cuts earlier this month without the stock valuation drops that many people expected. We remain concerned that as 2013 continues, reduced federal spending may start to show up in revenue reports of corporations and may impact prices, however, it may take a couple quarters for it to show up in a meaningful way.

MARKET INDICATORS CONSIDERED IN MANAGING THE AMERIVEST OPPORTUNISTIC PORTFOLIOS

Economic & Investment Outlook U.S. stocks were mostly unchanged in 2012's fourth quarter, as investors digested the results of the presidential election and awaited resolution of the so-called fiscal cliff of higher taxes and federal spending cuts. Despite concerns about slowing business investment and the economic impact of superstorm Sandy, we feel the economic news was relatively benign. A revised estimate of third- quarter GDP growth rose to 3.1% from 1.3% in the second quarter, and private employers added nearly 500,000 jobs to their payrolls in the three-month period ending November 2012.

Dan McNeela, CFA Portfolio Manager Dan McNeela is a portfolio manager with the investment advisory group of Morningstar’s Investment Management division. He is focused on portfolio construction, asset allocation, and manager due diligence. McNeela serves on the domestic large-cap asset class team.