Horan - Health. Wealth. Life

Just two weeks ago I wrote an article focusing on investment risk and market corrections, Incurring Investment Risk Near A Market Correction. The "correction" thinking seems to remain high on many investors' and strategists' minds. From a contrarian perspective, market corrections are difficult to time and corrections rarely occur when everyone expects them to. This article is falling into the same line of correction thinking, maybe a trap of sorts; however, the following thoughts will touch on ...  Read more...
In March 2010 President Obama signed into law the Patient Protection and Affordable Care Act (ACA), commonly know as Obamacare. The laws intention was to provide affordable health care to all, including the the uninsured. With the implementation of the ACA one might expect the insured not to be harmed by the laws implementation. Interestingly though, the primary beneficiaries seem to be the health care insurance companies and companies providing services to the health care industry. One confirma...  Read more...
One market phenomenon noticed by many investors has been the elevated use of excess cash flow by companies to fund stock buyback programs. The demand for these buyback oriented equities has resulted in their significant outperformance versus the broader S&P 500 Index as can be seen in the below chart.From The Blog of HORAN Capital AdvisorsThe U.S. equity market bottomed in March of 2009 following the financial crisis. From Q1 2009 through Q4 2014, S&P 500 companies have spent $3.8 trillion on di...  Read more...

Lower Oil Prices Ahead?

Posted by David Templeton on Friday, May 29, 2015 in Wealth Management | Comments (0)
On Thursday the EIA Petroleum Status Report shows a fourth week of oil inventory draw-down with a decline of 2.8 million barrels. Expectations were inventories would decline 857,000 barrels.From The Blog of HORAN Capital AdvisorsThis decline occurred in spite of the continued increase in production as noted by the orange line in the below chart. Notable in the chart is the fact production continues to increase in spite of the sharp drop in rig count (blue line). The recent inventory draw-down ma...  Read more...

Today's Market Decline Does Not Qualify As A Correction

Posted by David Templeton on Tuesday, May 26, 2015 in Wealth Management | Comments (0)
The S&P 500 Index is down 1% today and much of the television media represent this as a market "plunge". A representative headline on CNBC notes:"Stocks close 1% lower as Dow plunges triple digits; dollar, data weigh"As the below chart shows, the S&P 500 Index is down only 1.29% from its year-to-date high return of 3.49% reached on 5/21/2015. For the the Dow Jones Industrial Average, this index closed down almost 200 points today; however, as the market index value becomes a larger number, 100 o...  Read more...

Incurring Investment Risk Near A Market Correction

Posted by David Templeton on Monday, May 25, 2015 in Wealth Management | Comments (0)
One issue on the minds of a number of investors is the near term potential for an equity market correction. One's thinking is framed by the fact the S&P 500 Index has not incurred a 10+% correction in three and a half years or 916 trading days. This is the third longest streak as can be seen in the below chart. Include the fact first quarter 2015 earnings were not that great from a growth perspective, the economy (GDP) is growing at a snails pace and euro zone issues (Greece and now maybe Spain)...  Read more...
The disconnect between the performance of the Dow Jones Industrial Index and the Dow Jones Transportation Index has some market strategists suggesting the broader equity market is setting the stage for a correction. The correction thinking is based on the theory that weakness in transports is indicative of less goods being moved in the economy and thus a signal of a slowing  economic environment. From a more technical perspective, some strategist look at the Dow Theory as being able to signal a ...  Read more...

Bonds Performed Poorly Leading Up To Release of Fed Minutes

Posted by David Templeton on Wednesday, May 20, 2015 in Wealth Management | Comments (0)
In our last post about a week ago we noted the slow pace of economic growth that has unfolded since the financial crisis. This slow pace of growth has resulted in the unprecedented easing programs (quantitative easing-QE) instituted by the Federal Reserve over the past few years. A consequence of these QE programs is the apparent inability of the Fed to embark on a monetary tightening path since the markets seem addicted to these programs. In our view, given the low level of rates today, an init...  Read more...
The March trade deficit grew to $51.4 billion which has many economist now predicting subsequent revisions to first quarter GDP will show the economy contracted for the first time since contracting -2.1% in the first quarter of 2014.  In the first quarter the advanced reading on GDP or economic growth was reported at .2% which was below an expectation of a Q1 growth rate of 1%. The large increase in the trade deficit is being attributed to resolution of the West Coast labor dispute resulting in...  Read more...

Dividend Paying Stocks Struggling Mightily

Posted by David Templeton on Wednesday, May 06, 2015 in Wealth Management | Comments (0)
In a post last month we highlighted the fact value strategies and dividend paying strategies were lagging both the S&P 500 Index and the S&P 500 Growth Index over the past twelve months. Frequently the value type stocks have a dividend component that provides additional return for investors.Further confirmation that dividend paying strategies have been underperformers can be seen below. S&P Dow Jones Indices reports the average performance of the dividend payers in the S&P 500 Index have lagged ...  Read more...
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