With near-term risks rising, Standard & Poor's

Investment Policy Committee -- a group of senior managers who meet weekly to oversee all investment-related activity done in S&P's name -- has decided to change its asset allocation recommendation for investors. The committee reduced the recommended exposure to equities from 65% to 60%, and raised the cash allocation from 15% to 20%. The recommended bond exposure remains at 20%.

Equities remain S&P's asset of choice. But the market faces a number of near-term risks, such as higher energy prices due to tensions in the Middle East, upcoming mega-writeoffs of goodwill by companies, and the prospect of higher short-term interest rates. So S&P believes it is prudent to alter the equity-to-fixed income split to represent a more market-neutral stance.

While S&P doesn't see the S&P 500-stock index retesting the September, 2001, lows, it believes the index will remain in the 1080-1180 range for the near term. It's worth noting, too, that the market is entering a seasonal period in which it typically puts in a weak performance. From Standard & Poor's Investment Policy Committee