Dan Culloton: Your ideass also go in to the Dodge & Cox Balanced Fund, which obviously has a fixed income component, where does the asset allocation of that fund currently lie and what does it say about your bottom-up evaluation of opportunities both in bonds and equities right now?
Charles Pohl: It currently is in the close to the maximum, which is the maximum part of the prospectus is 75% in equities. And I think that speaks to the fact that we believe that with the equity market priced at 14 plus times earnings, something in that neighborhood, this year's earnings, that's at the lower end of the long-term historical average multiple for the S&P. So on a look-forward basis we expect returns from equities to be reasonably attractive. We compare that to fixed income and with a 3.4% yield on the 10-year treasury, there is not much baked into those yields to protect you against the risk of inflation.
If you look at the size of the Fed's balance sheet and if you consider quantitative easing and its potential impact, we think the size of government budget deficits and the potential risk of them trying to monetize some of those deficits that the risk of inflation is nontrivial. And you've seen certainly the gold price, the oil price, lot of food commodity, food prices have gone up quite sharply. We are seeing in some of the emerging markets signs of inflation which you alluded to earlier.
So, to us, the risks of inflation are significant, but you're not being compensated for that at all in terms of current yields. So, for us, looking at that trade-off, equities versus fixed income, right now it appears to us that equities represent a significantly better value.
Culloton: Well, Diana and Charles, thank you very much for your time today.
Diana Strandberg: Well, thank you.