Horan - Health. Wealth. Life

Equity Market Declines, Bullish Investor Sentiment Declines

Posted by David Templeton on Thursday, March 27, 2014 in Wealth Management | Comments (0)
Recently, changes in investor equity market sentiment have followed changes in the S&P 500 Index. As the market declines, bullish investor sentiment has declined as well. True to form, bullish sentiment fell this week as reported by the Association of Individual Investors. Bullish sentiment fell over five percentage points to 31.2% versus the prior weeks level of 36.8%. The long term bullishness level is 39% and one standard deviation below this average is 29%. Consequently, this level of bullis...  Read more...
Quite a bit of discussion has occurred over the past several days regarding the fact value stocks are outperforming growth stocks. This outperformance has taken place since the beginning of March as can be seen in the below chart.From The Blog of HORAN Capital AdvisorsIn looking at a longer view of the value growth cycle, growth had been the outperforming style since April of last year.From The Blog of HORAN Capital AdvisorsThe importance of this fact has to do with the performance of these two ...  Read more...

Further Multiple Expansion Possible

Posted by David Templeton on Tuesday, March 25, 2014 in Wealth Management | Comments (0)
In a recent white paper by Fidelity Investments the authors show that valuation in and of itself is a poor predictor of future short term market returns. The report evaluates a number of valuation indicators, including the Shiller CAPE, and points to some shortcomings with the CAPE calculation. In addition to Fidelity, Jeremy Siegel has highlighted issues with the CAPE calculation. Nonetheless, valuation is certainly important for investors to pay attention to as they allocate investment dollars...  Read more...

Equity Market Continues To Track Like The 1990's

Posted by David Templeton on Monday, March 24, 2014 in Wealth Management | Comments (0)
At HORAN Capital Advisors we have written commentary several times over the past six or so months noting similarities of the current equity market advance to market similarities in the 1990s. Our third quarter 2013 Investor Letter cited multiple or P/E expansion. We also posted a follow-up comment in our January 1, 2014 post, Expectations For The Market In 2014. In the January post we included a chart noting the calendar year returns for the S&P 500 Index in the mid 1990s.Today, Ed Yardeni of Ya...  Read more...
I was taken aback by an article that appeared on the Washington Post's Wonkblog. The article title, Living paycheck to paycheck: It’s not just for the poor, states a wealthy individual is one with no liquid assets and $50,000 in illiquid assets. The relevant part of the article noted,"The Wealthy Hand-to-Mouth," by economists at Princeton and New York University, finds that roughly one-third of American households -- 38 million of them -- are living a paycheck-to-paycheck existence. These are fa...  Read more...

Week Ahead Magazine: March 23, 2014

Posted by David Templeton on Sunday, March 23, 2014 in Wealth Management | Comments (0)
The first quarter of 2014 is coming to an end rather quickly. Appropriately, March Madness not only applies to basketball, but potentially to the market. One article in this week's magazine provides historical performance detail on both the Dow and the S&P 500 Index during the closing days of past first quarters. Additionally, a Lipper article notes investor flows into equity funds have been positive, while, at the same time, bullish investor sentiment has weakened. With the below link to this w...  Read more...

Saving At A Younger Age Pays Off In Retirement

Posted by David Templeton on Sunday, March 23, 2014 in Wealth Management | Comments (0)
In J.P. Morgan's recently released Guide To Retirement, one chart in the guide notes the advantage of beginning a savings program at an early age. The early start to a savings program generates its payoff due to the power of compounding. Compounding refers to the process of earning return on principal plus the return that was earned earlier. I believe the below chart speaks for itself, but with entitlement reform an almost foregone conclusion, retirees will need savings outside of government pro...  Read more...

Declining Foot Traffic At Malls A Challenge For Retailing

Posted by David Templeton on Saturday, March 22, 2014 in Wealth Management | Comments (0)
Retailing has never been an easy business. Consumer tastes and preferences are ever changing. In a recent report by Fidelity Investments, they note the trend in foot traffic at malls has been on the decline over the past three years.From The Blog of HORAN Capital AdvisorsThe report notes a number of factors are likely causes attributable to fewer shoppers frequenting malls, of course the weather is cited as one of those factors this year. More systemic reason are probably influencing this behavi...  Read more...
The American Association of Individual Investors reported bullish investor sentiment fell 4.56 percentage points to 36.78% versus the prior week's bullishness reading of 41.34%. The AAII Sentiment Survey measures the percentage of individual investors who are bullish, bearish, and neutral on the stock market for the next six months. The percentage decline in bullishness was reflected in an increases in a neutral tone by investors as neutral sentiment increased over five percentage points.From Th...  Read more...
Last week the Federal Reserve's release of assets and liabilities for commercial banks showed C&I loans continued to increase at a robust pace. Additionally, today's industrial production figure exceeded expectations with a .6 percent increase in February versus a decline of .2 percent in January. The report noted February's manufacturing output rose 0.8 percent. This followed a .9 percent decline in January. The report also noted that factory production had its largest increase since last Augu...  Read more...
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