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The pace of U.S. job growth in the next few months will not only determine the outcome of the November presidential election but also whether there will be a sustainable economic recovery. If the sharp slowdown in job creation in March is a precursor for developments in subsequent months as we suspect, the mid-year slowdown witnessed in the past couple of years may well get repeated in 2012.

Since 2008, commodities have been highly correlated with equities and other risk assets. As a result, many investors have begun to question whether the diversification benefit of investing in commodities has evaporated. A new report, however, finds that the recent spike in correlation is very much in line with the historical pattern around large macroeconomic shocks.

The weak March U.S. jobs report caught investors by surprise, but we think it’s reflective of the muted growth environment faced by developed nations. U.S. economic activity was likely boosted in the first quarter by exceptionally mild weather, and we should expect some payback during coming months

The prudent investor will seek to capture as many of the opportunities as might be available but will be particularly careful to define his or her real risk tolerance and need for higher returns, hopefully through a cautious evaluation of his or her individual goals and the size of the assets needed to defease them. The spectrum of possible investment stances is large, but the main focus should be on ensuring that one is in the right position within this spectrum rather than being mesmerized with short-term return opportunities.

Modern portfolio theory, while highly useful in illustrating the relative tradeoffs between current and prospective portfolio allocations, should not be used as the primary framework for constructing portfolios for wealthy families. Investors are better served, the authors say, by a goals-based approach that recognizes multiple levels of risk tolerance for distinct goals.

Earnings growth in 2Q for the vast majority of companies will likely be far below last year’s year-over-year gains. Slowdowns in both Europe and China have resulted in lower demand, to an extent, while comparisons to strong 2Q 2011 earnings results will depress year-over-year measures. We are hopeful that more meaningful earnings gains will resume in the second half of 2012.

The author discusses the re-emergence of domestic energy production, illustrates the evolving opportunities and risks brought about by this re-emergence for the United States and briefly touches on potential investment opportunities. This paper has a particular focus on natural gas, the most significant source of domestic energy.

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.

Reporting requirements for capital asset sales have changed, and the IRS is now in a better position to verify and track your activity. This article explains the IRS’ equation: verify + track + match data + audit = increased tax collection.

We continue to be optimistic that earnings will validate market prices, suggesting equities will offer greater reward than bonds. Selected equities also have dividend yields above those available from investment-grade bonds. In many instances, these dividends are supported by growing earnings, raising the likelihood of their increase.