Entries for December 2011

During moderate periods of inflation, equities tend to generate decent performance results. I posted the below chart in a post, Where To Invest In An Inflationary Environment, in mid 2010 that details the performance of various investment categories based on different inflation ranges going back to 1972.From The Blog of HORAN Capital AdvisorsSince mid year 2010 inflation has been trending higher with the latest year over year report showing inflation running at nearly 3.5%.From The Blog of HORAN...  Read more...

With the close of trading today, following is a quick look at the 2011 price performance of a few select equity markets around the globe.From The Blog of HORAN Capital AdvisorsSource: Reuters  Read more...

The investment mantra this year has been to focus on dividend paying stocks. Over the long run, payers have had a tendency to outperform the non payers and this has certainly been the case this year. On the other hand though, valuations do matter and the below chart provides investors with a cautionary view of simply buying "any" investment that has yield.From The Blog of HORAN Capital AdvisorsSource: South of Wall Street  Read more...

Recent mutual fund flow data shows investors continue to favor bonds over equities.From The Blog of HORAN Capital AdvisorsFrom The Blog of HORAN Capital AdvisorsSource: ICIWith the sovereign debt issues in Europe top of mind for investors, they continue to bet the best of the worst fixed income investments are U.S. Treasuries. One risk investors face with fixed income investments is the negative impact of a rise in rates. The 10-year U.S. Treasury yield is a meager 1.85% in spite of the fact the...  Read more...

The improvement in the unemployment rate earlier this month was certainly positive on the surface. The rate declined to 8.6% from the previously reported 9%. The improvement though came largely from the 300,000 individuals that simply stopped looking for a job. As a result, these additional people are not counted among the unemployed. As the below chart shows, the number individuals not in the labor continues to rise.From The Blog of HORAN Capital AdvisorsThis fragile state of the consumer also ...  Read more...

Going forward S&P has changed the methodology on how they determine which companies qualify as Dividend Aristocrats. S&P notes they will only count regular dividend payments when determining the calendar year total dividend payments of a company. Special cash dividends will no longer be considered.The table below contains a list of Standard & Poor's Dividend Aristocrats for 2012. The rebalance will take place at the market's close on December 16, 2011. The green highlighted companies are the add...  Read more...

Much of the rhetoric coming out of Washington is focused on the need for more revenue, specifically from individual tax payers. The millionaire tax discussion is emblematic of this focus. As the below chart shows though, individual tax receipts into the U.S. Treasury are up 22% on a year over year basis through the end of September with overall receipts up nearly 7%.From The Blog of HORAN Capital AdvisorsAdditionally, individual receipts for the government are near the level received in 2007. On...  Read more...

A common view from pundits on the strength in retail sales on Black Friday and Cyber Monday is much of the increase represented consumers buying forward. In other words, the common take on the strong sales report was it likely won't continue into December. If history is any guide, the below chart might indicate additional retail sales growth is likely for the balance of the weeks leading up to Christmas.From The Blog of HORAN Capital AdvisorsThe dollar value of total cyber sales increased 22% ve...  Read more...

I noted in a post a few weeks ago about the positive trend in the JOLTS (Job Openings and Labor Turnover Survey) report which was released by the US Department of Labor and indicated job openings, as of the end of September, were at their highest level since 2008. Additionally, jobless claims, a key leading indicator, have now moved below 400,000 on a four-week moving average basis, which signifies an improving job market. The ADP Private Payroll report showed a 206,000 job gain in November, wel...  Read more...

As I write this shortly after the Dow Jones Industrial Average rockets higher by nearly 500 points, or 4+%, in just one day, I think back to the concerns raised in recent client meetings about the market’s volatility. In August and September, 40% of the trading days in the S&P 500 Index saw daily price swings of plus or minus 2%. This level of volatility was last seen in the early 1930’s. Increasingly, the market seems to be trading more on emotion than on company fundamentals. The rally at the ...  Read more...