This report on asset allocation in the current environment is the fifth in what has evolved into a series of occasional papers on the evolution of the secular bear market in equities and our thoughts on how investors can best cope with the prevailing uncertainties. While recognizing that conditions could certainly remain benign for some time, absent any catalyst for change and the persistence of relatively easy money, we stress that current valuations discount only positive outcomes and that with risk premia at historically narrow spreads, investors should increasingly be risk averse rather than risk seeking.