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Rental growth is likely to slow in many markets. However, low vacancies and limited construction pipelines as well as the fairly robust global economy should limit any downside in most cities. Regionally, we believe direct commercial real estate in Australia, China, Germany, France, Canada and selected U.S. and Latin American markets should outperform in the next few quarters.

While the market rally in 2012 has been most supportive for directional trading and especially for emerging market managers, we remain only cautiously optimistic on these strategies since markets may soon be due for a correction. Given the prevailing uncertainties with regard to the economic outlook, we continue to prefer tactical trading strategies.

We continue to recommend a focus on the middle of the risk spectrum and investments with better prospective risk-reward. Included in this space are higher quality equities (with lower economic sensitivity), mortgage and corporate bonds (both investment grade and some high yield debt), global bonds, options-based strategies, and absolute return strategies.

While the stress has not been completely removed from the system, today’s housing prices provide a meaningful opportunity for the patient investor. Median home prices have historically exhibited a strong relationship with median household income. Although this relationship became quite stretched during the real estate bubble, it has since reverted to fairer, even attractive, levels.

We continue to favor high income strategies in an environment where traditional bond yields are extremely low and dividend payouts are generally stingy. U.S. equity markets are fairly valued. Internationally, emerging market equities and debt have been strong performers in 2012 and have further long-term upside. We remain on the sidelines in Europe.

Whether a family office wants a global custodian to be the sole asset servicer or the gatekeeper of data from aggregators and brokers, the role of a global custodian goes far beyond safekeeping. This paper makes the case for global custodians, pointing out their strengths in risk management, operational efficiency, accuracy and access to data, and technology.

Although another round of quantitative easing now looks less imminent given the recent economic strength, investors still expect Federal Reserve Chairman Ben Bernanke to come to their rescue with QE3 should economic growth falter. However, the flexibility for QE3 becomes more limited if crude oil and gasoline prices continue to escalate into the summer.

Analysis shows alternative strategies and funds are far from equal in the diversification benefits they provide. Investors who want to use alternatives to reduce portfolio risk are wise to explore the performance characteristics of individual funds as well as consider how they are likely to perform under varying conditions.

International developed equities, mostly European, are trading below their 75th percentile and have occasionally flirted with their 90th percentile level in the past year. Such discounts can lead to relatively strong future returns but can require a good amount of patience.

Generation Investment Management argues that there is no trade-off, philosophically or empirically, between profit maximization and fostering environmental sustainability; however, a number of structural impediments exist to mainstreaming 'Sustainable Capitalism.'