The latter half of 2020 and the first quarter of 2021 saw a fairly clear rotation toward a higher, long-term interest rate environment; or at least the expectation of such. We saw in the second quarter an appetite for traditional value stocks, as well as small caps over large cap, reverse once again as treasury yields fell and bonds rallied, while the headline growth stocks re-established their leadership. Fans of the FAANG names, bolstered by re-opening economic metrics, pushed these megacaps to all-time highs, while the industrial and financials names were either flat or retreated slightly. Real estate (+13.1%) and energy (+11.3%) bucked the growth bias and had returns in-line with Technology (+11.6%). International equities continued their positive performance, though still struggling to keep up with US equities, were no doubt hurt both by dollar strength and a slower re-opening trade. Despite the most recent moves in bonds, we continue to favor shorter duration fixed income as we believe short-term moves in interest rates are transitory and that the Fed is likely to move short-term rates closer to its policy rate over the next eighteen to 24 months. We encourage our clients to be at or near their strategic allocations while keeping short term cash needs available in cash or short-term fixed income.