HORAN Capital Advisors

Entries for 2019

The FAANG Trade In Focus Again

 March 17 2019     David Templeton
Since the equity market peak in the third quarter of 2018, the average return of the FAANG basket of stocks, i.e., Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Alphabet f/k/a Google (GOOGL), has underperformed the broader S&P 500 Index as seen below. I have highlighted the significant contribution the FAANG's have had to overall market returns in prior posts like the Growth verse...

Record Job Openings In A Tight Labor Market

 March 15 2019     David Templeton
With today's release of the January Job Openings and Labor Turnover Survey (JOLTS), there is further confirmation that the job market remains tilted in favor of job seekers. As Econoday noted in their report, "employers are increasingly scrambling to fill [openings]." Even with new hires increasing by 1.5%, openings exceed hires by a record 1.78 million individuals.A year ago with theĀ  March 2018 ...

Investors Have Missed Out On The Equity Rally

 March 9 2019     David Templeton
From 2014 to mid-2015, investors seemed to have a favorable view on stocks if one bases the observation on ETF and mutual fund flows. As the below chart shows, the increase in S&P 500 Index until mid-2015 coincided with positive flows into domestic equity focused mutual funds and ETF's. Beginning in mid 2015 though, investor flows turned negative (maroon line.) During late 2016 and early 2017 the ...

Cyclical Stocks Outperforming Defensive Stocks An Indication Of A Strengthening Economy?

 February 24 2019     David Templeton
Since the beginning of 2018, investors have encountered a stock market that is more volatile, yet at a level of volatility that is more normal. The below chart shows the return pattern for the S&P 500 Index since 1/2/2018 and the steep decline that began at the end of last September has been followed by a sharp recovery in 2019.Leading the recovery has been small cap stocks that are up 18.1% year ...

Investor Sentiment Has Improved But Not To An Extreme Level

 February 7 2019     David Templeton
Several recent releases of various investor sentiment reports show an improvement in overall investor sentiment. In late December I noted a number of the sentiment measures were indicating extreme fear on the part of investors. Since my December post both sentiment and the equity market have experienced a marked improvement. One example is this week's release of the AAII Sentiment Survey. Individu...

Higher U.S. Stock Prices Not Driven By Higher Domestic Equity Inflows

 February 6 2019     David Templeton
The end of 2018 saw the S&P 500 Index return decline over 13% as seen in the first chart below. The second chart shows the snap back in the market that has rewarded investors at the start of 2019 with the price only return of the S&P 500 Index up nearly 9%.In spite of the strong returns so far this year, investor fund flows into mutual funds and exchange traded funds has been decidedly negative. T...

Winter 2018 Investor Letter: A Tough Year For Most Asset Classes

 January 22 2019     David Templeton
As noted in our Winter 2018 Investor Letter, following passage of the Tax Cut and Jobs Act, the reduction in corporate tax rates caused analysts to revise their earnings growth expectations higher to nearly 24% for 2018. Given a number of positives, further upside in equity markets was anticipated in 2018. As fate would have it, not only were equity returns weak, most asset class returns were nega...

Dogs Of The Dow A Winning Strategy In 2018

 January 1 2019     David Templeton
With the 2018 investing year now closed, one strategy that turned out to be a winning one was the Dogs of the Dow strategy. The Dogs of the Dow 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. Once the ten stocks are determined,...