Horan - Health. Wealth. Life

QE's Influence On Equity Prices

Posted by David Templeton on Sunday, November 24, 2013 in Wealth Management | Comments (0)
One debatable issue with the Fed's quantitative easing (QE) program is whether or not the QE activity has an impact on equity prices. In a recent McKinsey & Company study, QE and ultra-low interest rates: Distributional effects and risks, McKinsey concludes,"We found little evidence that ultra-low interest rates have boosted equity markets. We cannot discern a large-scale shift into equities as part of a search for yield by investors, and price-earnings ratios and price-book ratios in stock mark...  Read more...

The Week Ahead Magazine: November 24, 2013

Posted by David Templeton on Sunday, November 24, 2013 in Wealth Management | Comments (0)
The equity market has been on a steady advance since after the election last year. And actually this market recovery has been in place since the end of the financial crisis in 2009. As noted in our blog article on Saturday, a market correction of 10+% has not occurred for more than 500+ trading days. A number of the articles contained in this week's magazine highlight the strength of the equity market as well as highlight the potential rotation out of bonds into equities that is taking place. Sl...  Read more...

Waiting For A Correction?

Posted by David Templeton on Saturday, November 23, 2013 in Wealth Management | Comments (0)
One interesting aspect of this bull market run for the S&P 500 Index has been the absence of a 10+% correction.From The Blog of HORAN Capital AdvisorsIt seems on a daily basis the talking pundits on business news channels and in print are certain an equity market correction is just around the corner. For those investors under invested in equities, a correction would certainly be a welcomed event. Market corrections, however, are hard (if not impossible) to predict and when they do occur, they te...  Read more...

The Week Ahead Magazine: November 17, 2013

Posted by David Templeton on Sunday, November 17, 2013 in Wealth Management | Comments (0)
The S&P 500 Index closed higher for the sixth consecutive week. Investors seem concerned about the market entering into bubble like territory. In this week's magazine several of the article links comment on the current state of this market advance. As we referenced in last week's magazine, one technical factor favoring higher equity prices is the market is in a favorable seasonal period. This, however, does not guarantee higher prices ahead.The Week Ahead Magazine: November 17, 2013  Read more...

Benchmarking Investment Performance

Posted by David Templeton on Saturday, November 16, 2013 in Wealth Management | Comments (0)
An important task for investment managers and clients is to develop an investment policy statement (IPS) for the investment portfolios that are being managed. The IPS details guidelines specific to the client that outlines the client's goals and objectives. Some of the criteria of the IPS will detail the goals and objectives of the client along with liquidity needs. In the end the IPS will serve as a road-map for the investment manager in managing the client's portfolio as well as detail the spe...  Read more...

Declining Labor Force Participation Rate And Baby Boomers

Posted by David Templeton on Sunday, November 10, 2013 in Wealth Management | Comments (0)
One aspect of the slow growing recovery following the recent recession has been anemic job growth. A consequence of the weak job growth has been a steady decline in the labor force participation rate. Some economist and strategist attribute the declining participation rate to the retirement of baby boomers. However, as noted by the orange line in the below chart, the participation rate of baby boomers (55 years and over) remains at near the same level equal to that at the end of the recession. C...  Read more...

The Week Ahead Magazine: November 10, 2013

Posted by David Templeton on Sunday, November 10, 2013 in Wealth Management | Comments (0)
Much of the discussion in recent weeks has centered around the equity market potentially going through a "melt up" phase in a run to year end. One factor that gives this thought some validity is the favorable seasonal period that occurs in the fourth quarter of calendar years. A number of article links in our Week Ahead magazine provide insight into this favorable seasonal period.The Week Ahead Magazine: November 10, 2013  Read more...

Investors Express More Cautiousness Since The Financial Crisis

Posted by David Templeton on Saturday, November 09, 2013 in Wealth Management | Comments (0)
Since the bottom of the market at the depth of the financial crisis in early 2009, investors seem to be taking a more cautious view of the markets based on reported investor sentiment. It really hasn't been until this year that the S&P 500 Index has been able to make a sustained push above the market highs of early 2000. In mid to late 2007 the S&P was able to briefly surpass the 2000 highs; however, this was short lived as the financial crisis began to unfold.From The Blog of HORAN Capital Advi...  Read more...

Retail Investor Cash Hits Low Along With Fear

Posted by Matt Antenucci on Friday, November 08, 2013 in Wealth Management | Comments (0)
Rydex Cash Levels have fallen to extreme lows recently (See chart below).  The Rydex Cash Level measures the cash held in Rydex money markets.  Historically, pullbacks or corrections occur when these levels reach the .4 marker, but the past three times the index has hit the .4 level, the pullbacks have been short-lived.  This is a sign that that those investors sitting on cash are eager to invest in equities in fear of missing out on this strong equity market rally. Alternatively, ICI data shows...  Read more...

Are Small Cap Valuations Getting Extended?

Posted by David Templeton on Thursday, November 07, 2013 in Wealth Management | Comments (0)
Since the beginning of November, small cap stocks have been underperforming large caps. This recent underperformance has strategist questioning whether the small cap outperformance, since the end of the financial crisis in 2009, is coming to an end. As the below chart shows, since February 2009, small caps have significantly outperformed large capitalization equities.From The Blog of HORAN Capital AdvisorsThis outperformance has caused the valuation of small caps to reach a premium relative to l...  Read more...
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