Rebalance! 

Take a look at your portfolio and see what percent your emerging markets have grown too and consider moving any excess into EFA.  If you want to maintain a higher level of risk and diversify your portfolio, take a look at IGR and FFR.  These two are relatively new etf's and represent international real estate.  Your international cash, bonds and equities should have grown to an overweight, maintain or increase that overweight as a tactical move for the quater.  You can increase your non-US exposure in any asset class, cash, bonds, equities and real estate.

The Fourth quarter will be a Fed driven quarter and all eyes are focused on their next meeting at the end of October.  You will need to keep an eye on economic releases and view them in terms of Fed Action. 

I am in the school of thought that the rest of the world is doing much better and the US economy will be dragged along with no recession.  The Fed in my humble opinion screwed up cutting rates at their last meeting and are inviting inflation on two different fronts. 

• First, global demand growth for food, energy, housing and technology is not slowing or stoping anytime soon and US consumers are for the first time not the ones leading the way.  This is demand driven commodity inflation that requires time, capital and labor to increase available supply.   You cannot plug in another server and quadruple capacity overnight. 
  
• Second, devaluing the dollar by cutting interests rates in response to the Wall Street whine imports inflation.  I am sure doubling the price of Toyota and Honda's will make the struggling three happy but what about all those other items we import like food and energy?

Politics, international unrest can and will affect the markets in the short run, those are buying opportunities.  Long-term, the rest of the world is growing and improving their standard of living and petty dictators are finding it difficult to exist in a world of youtube and video cell phones.  We call it the American Dream, it is not limited to those living in the United States, it is humanities dream and people around the world share it.