All eyes have been on the Federal Reserve recently as talk of tapering of the quantitative easing programs was introduced by some Fed governors. An outcome of reducing the QE influence on the economy would likely be a move higher in interest rates. In fact, the yield on the 10-year Treasury recently moved higher from the 1.60% area to the 2.20% level as a result of the tapering comments. If this gradual reduction in QE is implemented, interest rates are likely to normalize at a higher level. Ris...  Read more...

Note, Google Reader shuts down for good on July 1st. If you read our content via Google Reader the following link outlines RSS reader alternatives.http://lifehacker.com/5990456/google-reader-is-getting-shut-down-here-are-the-best-alternatives Many of the readers of our content receive an email notification when we publish articles. You can sign up for these emails at the following link: Email Notification Now the article:In a recent interview between Stephen S. Smith, co-portfolio of the Legg Ma...  Read more...

One investment asset class that seemed to be favored by many investment advisers at the beginning of the year was emerging markets. When the crowd highly favors a certain type of investment, investors should be wary of following this crowd behavior. At the beginning of this year, InvestmentNews surveyed advisers and found the following,"...more than half the advisers surveyed by InvestmentNews at the beginning of the year said they planned to increase their allocation to emerging market stocks...  Read more...

As interest rates have moved higher, as evidenced by the below chart of the 10-year treasury yield, yield related investments have come under significant downward pressure. The below chart shows the 10-year treasury yield rising from 1.63% in early May to 2.19% at today's close.From The Blog of HORAN Capital AdvisorsRising rates have had a negative impact on REITs. Investors that were chasing yield in this low interest rate environment are now experiencing the downside in these investments when ...  Read more...

One common trait of individual investors during the equity bull market run since November is restraint. Based on the American Association of Individual Investors sentiment survey, investor bullish sentiment fell over six percentage points to 29.47% for the weekly period ending June 6th. This follows a thirteen point decline in the prior week after moving up by over ten points during the week of May 23rd. This two week decline in bullish sentiment occurred during a period when the S&P 500 Index e...  Read more...

Friday afternoon one technical indicator, the Hindenburg Omen, seemed to dominate the discussion of a number of market pundits. The blog at stockcharts.com provides the following criteria in order for the indicator to be triggered, "Hindenburg Omen: Created by James Miekka, the Hindenburg Omen warns of potential weakness in the stock market. There are three criteria to activate the omen. First, NYSE new highs and new lows must both be more than 2.8% of advances plus declines. Second, the NY ...  Read more...

A seemingly rare occurrence has taken place with the close of trading on Friday. The S&P 500 Index has declined for two weeks in a row. The last time this occurred was in November of last year. This is a testament to how strong the market advance has been so far this year.From The Blog of HORAN Capital AdvisorsThe sectors that have been the weaker performers during this pullback or consolidation have been the traditionally more defensive ones, e.g., consumer staples, utilities, telecommunication...  Read more...

The market has interpreted recent commentary from the Fed that quantitative easing (QE) may be nearing an end. This type of thinking from market participants has led to a significant sell off in many fixed income investments as well as yield focused equities and ETFs.The negative impact with the price performance of many of these investments that have fixed income qualities has been exacerbated by the fact the underlying investments in some of these ETFs are highly leveraged in and of themselves...  Read more...

Over time, as investors approach and enter into retirement, fixed income is often viewed as the stable portion of one's investment portfolio. Today though, central banks around the globe have implemented monetary policies that have pushed interest rates to near record lows. Does this artificial stimulus then make fixed income a not so safe investment asset class?From a prudence point of view, some factors investment advisors inquire about of their clients is an appropriate investment objective, ...  Read more...

Standard & Poor's notes in a recent report on Earnings Yield By Sector that seven of ten S&P 500 sectors have earnings yields greater than their long term averages. As of mid-May, the S&P report notes,"the earnings yield on the S&P 500 was 5.4% (based on trailing GAAP EPS through Q1 2013), and nearly three times as high as the 1.9% yield on the 10-year Treasury bond. The last time the EPS yield was this far above the 10-year note yield was in 1955....Common wisdom holds that if stocks are yieldi...  Read more...