HORAN Capital Advisors

Investor Fund Flows Favoring Bonds And Not Equities

 August 6 2017     David Templeton
The equity market has gone over a year without a pullback of at least 5% or more. The last 5% decline occurred in mid-June 2016 when, over a two week period, the market fell 5.5%. Even in the run up to the election last year, the equity market did not close down over 5%. This lack of volatility is showing up in popular volatility measures like the VIX, but the VIX may not be a good measure of expe...

The S&P 500 Index Is Expensive And Has Mostly Been So Since The Early 1990's

 August 5 2017     David Templeton
One can cite any number of stock valuation measures and conclude U.S. equities look expensive or are at least trading above their long term average valuation measures. In this environment one might conclude stocks are priced for perfection with little margin for error. Of course this might certainly be the case, but is this an uncommon position for the equity market? As the shaded areas in the bel...

Dividend Payers Are Underperforming

 August 1 2017     David Templeton
A year ago dividend paying stocks were significantly outperforming the non payers in the S&P 500 Index and the S&P 500 Index itself. If investors were chasing performance back then and loading up on the payers, today they would be disappointed. Below is a chart of the year to date performance of two dividend paying exchange traded funds, SPDR Dividend ETF (SDY) and iShares Select Dividend ETF (DVY...

Equity Valuations No Longer Matter?

 July 30 2017     David Templeton
One benefit to writing blog content is it serves as a record of ones past thinking and the results of any decisions made from the prior analysis. With that in mind I reviewed some of the topics written over a year ago, that is, in June/July of 2016. A few of the topics at that time had to do with valuations, PEG ratios and the fact the market was trading at an all time record high. In fact one art...

Strong Earnings Growth And Favorable Valuations Lead To Weak Stock Returns

 July 22 2017     David Templeton
One factor utilized in uncovering potential investment opportunities is to evaluate companies and sectors that are projected to generate strong earnings and cash flow growth over the course of the next year or more. The risk associated with simply reviewing earnings growth rates is the fact other variables often influence the future price performance of a company's stock. A good case in point at t...

Jump In Investor Bullish Sentiment But Remains Below Long Run Average

 July 20 2017     David Templeton
Today the American Association of Individual Investors released their Sentiment Survey results for the week ending 7/19/2017. These results show individual investors' bullish sentiment increased 7.3 percentage points to 35.5%. This is the highest reading since early May when bullish sentiment was reported at 38.1%. This jump in bullish sentiment still has the level below the long run average of 38...

Summer 2017 Investor Letter

 July 5 2017     David Templeton
Our Summer 2017 Investor Letter reviews the strong equity market performance thus far in 2017.  As of quarter end, the S&P 500 is up 9.34%, the Nasdaq is up 14.07%, and the MSCI EAFE Index is up 14.23% year to date. As investors become increasingly worried about the first significant market decline since early 2016, stocks continue to climb the proverbial “wall of worry.”For more of our thoughts o...

Market Pullbacks Should Be Expected

 June 26 2017     David Templeton
There have been plenty of reasons to sell stocks since the end of the financial crisis in 2008. The drumbeat seems to be getting louder as the postwar market advance approaches one of the longest on record.Source: The Leuthold GroupAlso contributing to some angst about the market's advance is the fact the last pullback/correction of greater than 10% occurred in February 2016. In other words the ma...

Dogs Of The Dow Underperformance Gap Widening

 June 18 2017     David Templeton
The first six months of the year are nearly behind us so I thought it appropriate to provide an update on the performance for the 2017 Dogs of the Dow. As noted in the past, the strategy is one where investors select the ten stocks that have the highest dividend yield from the stocks in the Dow Jones Industrial Average Index (DJIA) after the close of business on the last trading day of the year. O...

Amazon: Selling And Delivering Groceries Is Not A High Margin Endeavor

 June 18 2017     David Templeton
Of course the big news last week was Amazon (AMZN) announcing it was acquiring Whole Foods Market (WFM) in a deal valued at $13.7 billion. The deal is an all cash one, but with Amazon's stock trading at a trailing price earnings multiple of 185 times one might think funding the purchase with stock might make more sense. Nonetheless, this acquisition announcement had ripple effects on many other co...
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