Sentiment: Bullish Institutions Versus Bearish Individuals

 July 28 2016     David Templeton
This week's NAAIM Exposure Index was reported at 101, only the fifth time the exposure index has been reported above 100 since the index's inception on July 5, 2006. The NAAIM Exposure Index consists of a weekly survey of NAAIM member firms who are active money managers and provide a number which represents their overall equity exposure at the market close on a specific day of the week, currently ...

Weak Investor Sentiment Yet New Equity Market Highs

 July 22 2016     David Templeton
Today the S&P 500 Index closed at another all time record high. This higher advance in the market is becoming a regular occurrence as this is the fourth consecutive week for the market to close higher on a weekly basis. From the market's intraday low on February 11th, the S&P has advanced over 20% on a price only basis.The magnitude and trajectory of the move higher is seen more clearly on the dai...

Longevity Illustrator

 July 22 2016     Anna Pfaehler
The two certainties of life - death and taxes – are rife with uncertainties. The tax code tends to be as clear as mud to those who are not in the tax profession. On more than one occasion I’ve told a colleague if it makes sense, you are reading it wrong. But death is also full of uncertainty, namely in the timing.  When projecting a client’s retirement, I typically use ...

Summer 2016 Investor Letter: Searching For Yield

 July 20 2016     David Templeton
In our just published Summer 2016 Investor Letter, we explore the investor's pursuit of income generating investments. In our view this has led to extended valuations in some of the income yield segments of the equity market, for example, utility stocks. If interest rates do remain lower for longer then the extended valuations in the income yielding sectors could remain elevated. The Investor Lett...

A Look At Projected Sales And Earnings Growth

 July 20 2016     David Templeton
In spite of the S&P 500 Index trading sideways for most of the last 18 months until very recently, the advance from the financial crisis low has been strong. A part of the return generated from equities has been the fact the forward P/E multiple has expanded from low double digits to just over 17 times earnings.In a low interest rate environment stocks tend to trade at higher P/E multiples. The cu...

Value Stock Outperformance May Indicate Stronger Economy Ahead

 July 17 2016     David Templeton
Over the course of the past few years several times I have touched on the significance of the value versus growth stock performance cycle. A couple of the earlier articles contain useful information for investors that provides insight into the economic cycle being telegraphed by the value/growth cycle. In short, in a slowing economic environment, growth tends to outperform value and the opposite t...

Market Breaks From Trading Range While Sentiment Measures Remain Mixed

 July 16 2016     David Templeton
The S&P 500 Index has recovered all that was lost in the two day selloff following the Brexit vote. Since the Brexit low, the S&P 500 Index is up over 8.5% and this has taken the index out of its 18+ month trading range. As the below chart shows, the trading range goes back to the end of 2014 and up until this week, the only breakout from the range had been to the downside.With this strong recover...

Dividend Payers And Dividend Focused ETFs Post Strong Returns YTD

 July 9 2016     David Templeton
A few prior posts have provided detail and potential consequences facing dividend focused equities given their extended valuations. Of course, in a low (and going lower?) interest rate world it seems the simple approach an investor can pursue is just buying a stock that has a higher yield than the 10-year U.S. Treasury. S&P Dow Jones Indices recently reported on the average performance of the divi...

A Look At The PEG Ratio: Earnings Growth Versus Valuation

 July 9 2016     David Templeton
In an article I wrote about a week ago, I reviewed the current P/E (price earnings ratio) of the sectors that comprise the S&P 500 Index. The article included the below chart which compared the current sector P/Es to the respective sector's average P/E and minimum P/E over the past ten years. the article noted some of the income or yield producing sectors were trading at elevated valuations.Simply...

Social Security Trustees' Report

 July 8 2016     Anna Pfaehler
The 2016 annual report from Social Security’s Board of Trustees was recently released. A few highlights:  In 2015, 60 million people received checks and $886 billion was paid out for both retirement and disability benefits.   Social Security receipts, including interest income, exceeded expenditures by $23 billion in 2015. The projected 2016 surplus is $16 billion. ...
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