HORAN Capital Advisors

Entries for 2018

Sentiment And Economic Data Laying The Foundation For Higher Stock Prices

 March 9 2018     David Templeton
The headline number of an increase of 313,000 in February's non-farm payrolls this morning was big. This is the largest monthly increase since July 2016. The high end of consensus estimates was for a 230,000 increase in payrolls. December and January reports were also revised higher.In addition to the strong payroll report, estimated 12-month forward earnings growth is anything but disappointing. ...

Trade Deficit And Tariffs: It Is Complicated

 March 8 2018     David Templeton
President Donald Trump's announcement that he is instituting tariffs on imported steel and aluminum came as a surprise to some although reducing the trade deficit was one of his campaign promises. Dealing with the trade deficit issue is a complicated one since no one factor impacts trade. What is complicating a necessary discussion at the moment is the vitriol in which President Trump's tariff pro...

Rising Interest Rates A Headwind For Dividend Paying Stocks

 March 4 2018     David Templeton
Since July 2016 the yield on the 10-year US Treasury Note has increased from 1.32% to nearly 3% today. This doubling of longer term interest rates is creating a headwind for dividend paying stocks resulting in their underperformance versus their non-dividend paying counterparts as well as the broader S&P 500 Index.The maroon line in the below chart represents the total return for the S&P 500 Index...

Sentiment And Economic Data Mostly Positive

 March 3 2018     David Templeton
A colleague and I just returned from a week long trip in south Florida visiting some of our clients on both the east and west coast of the state. One notable factor was the very high level of activity everywhere we visited. Restaurants were all packed, road traffic was unbelievably jam packed and the number of semis on the road seemed higher than usual, and usually those trucks do not drive around...

Continuing To Favor U.S. Large Cap Stocks Over U.S. Small Cap Stocks

 February 17 2018     David Templeton
With the passage of tax reform, one market segment one might believe experiences an outsized benefit to earnings is U.S small cap stocks. This certainly seems plausible due to the fact smaller companies tend to have less direct exposure to foreign revenue; therefore, likely generating most of their profits in the U.S.Our firm exited completely the U.S. small cap space in late 2013 based on a numbe...

Small Businesses Remain Highly Optimistic

 February 14 2018     David Templeton
Tuesday's report by NFIB on small business optimism for the month of January places the reading in the top five highest coming in at 106.9. According to NFIB the response to "Now Is A Good Time To Expand" was 32% and is the highest level for this category in the Indexes 45-year history. Today's strong NFIB report comes on the heals of a record level of optimism in 2017. NFIB President and CEO, Jua...

Enhancing Investment Results By Utilizing An Investment Mentor

 February 13 2018     David Templeton
In a recent article, Strong Hands - Bridging the Behavior Gap, by Pim van Vliet, PhD, a Managing Director at Robeco Institutional Asset Management, it was noted that,"the average mutual fund investor lags a buy-and-hold strategy by -1.9%. This finding is persistent across different styles, varying from -1.3% for value investors to -3.2% for growth investors. Also 'passive' investors in market fund...

Dow Dogs Struggle Early In 2018

 February 12 2018     David Templeton
The Dogs of the Dow of 2018 include two newcomers, General Electric (GE) and Procter & Gamble (PG). These two stocks made the list of top 10 dividend yielding stocks in the Dow Jones Industrial Average Index for 2018 and replaced Boeing (BA) and Caterpillar (CAT). Unfortunately the new additions are weighing down the performance of the Dow Dogs so far this year as they are the worst performing sto...

Last Week Was The Beginning Of An Equity Market Returning To Normality

 February 11 2018     David Templeton
Some are saying last week's market movement is one for the record books. I have seen descriptions noting the market decline was unprecedented or the market is in turmoil. S&P Dow Jones Indices Indexology Blog titled a post, I'm Exhausted, but outlines data that places the market decline in perspective. One data point in S&P's post,"Keeping perspective, as repeatedly noted, while 1000 point decline...

A Reversal In Bullish Investment Sentiment

 February 8 2018     David Templeton
I have often written that sentiment measures are most valuable at their extremes. Also, they tend to be most representative of potential market turning points when the extreme is at the bearish end of the spectrum. However, in hindsight, it appears recent excessive bullishness for individual investors and institutional investors indicated a cautionary equity market outlook would have been profitab...
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