Standard & Poor’s Investment Policy Committee today recommended that investors increase their equity exposure, and reduce their bond holdings.

The S&P policy committee called for investors to raise the equity portion of their portfolios, to 60% from 55%, cutting their bond exposure, to 15% from 20%. The recommended cash allocation remains unchanged at 25%.

S&P says that the reallocation is warranted because stock valuations are now at or below historic norms, earnings are likely to increase in the coming quarters, and the technical market outlook has improved.

“Earlier this year, our analysis led us to recommend that investors reduce equity exposure, and indeed the U.S. equity markets, as measured by the S&P 500, have fallen 15% in value since then,” said Sam Stovall, senior investment strategist, S&P, in a statement.

“In recent weeks, however, the markets have been demonstrating increased resilience, holding above the lows of last month. Even though an extended period of base-building is likely, we believe a bottom has been established and that the markets now have greater upside potential than downside risk,” Stovall concluded.