HORAN Capital Advisors

Stocks As Bonds And Modern Portfolio Theory

 May 27 2013     David Templeton
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...

Earnings Yield Favors The Cyclical Sectors

 May 26 2013     David Templeton
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 wa...

Individual Investor Bullish Sentiment Spikes Higher

 May 23 2013     David Templeton
Today's release of AAII's Investor Sentiment Survey saw bullish investor sentiment increase 10.5 percentage points to 49.0%. This reading is right at the average plus one standard deviation level. The bull/bear spread widen to +27.4%. The weekly reading can be volatile so looking at the 8-week moving average smooths some of this volatility. This week's 8-week average is reported at 33.7%, up from ...

Anadarko Petroleum Trades As Low As One Penny On Friday

 May 19 2013     David Templeton
In the final second of trading on Friday, Anadarko Petroleum Corp. (APC) goes from a $90 stock and trades down to $.01, that is a penny a share before closing at $90.03. I am sure some buyers (computers) thought they were fortunate to pick up APC at one penny. On the contrary, the NYSE canceled trades executed below $87.56 per share.From The Blog of HORAN Capital AdvisorsFrom The Blog of HORAN Cap...

Complacency Setting In And Fund Flows

 May 19 2013     David Templeton
As the market continues to seemingly move higher every day, investor complacency appears to be on the rise. The recent CBOE equity put/call ratio is at a low level of .50. Like other sentiment indicators, this measure tends to be more accurate at extremes. On April 20th we wrote about the elevated put/call ratio and wondered if the market was excessively bearish. Since the time of that post, the m...

Bond Funds And Central Banks Are Buying Equities

 May 15 2013     David Templeton
Morningstar recently reported the number of bond funds buying or holding stocks is at the highest level in 18 years. The below chart from Charles Schwab details data over the last ten years. Schwab/Morningstar note the percentage of bond funds holding equities has remained stable over this time period though. Nonetheless, more bond funds are buying equities in an effort to find higher yielding sec...

A Tired Bull Market

 May 12 2013     David Templeton
Not much seems able to restrain the strength of the bull market in U.S. equities. On a year to date basis the S&P 500 Index is up 15.43%. The advance has finally drawn investors into equity mutual funds as reflected in positive equity mutual fund flows the first three months of the year.From The Blog of HORAN Capital AdvisorsThe positive market results continue to keep the S&P 500 Index in a posit...

U.S. Centric Companies Outperforming

 May 9 2013     David Templeton
In a recent AlphaNow report from Thomson Reuters, it shows U.S. companies that generate a majority of their revenues from the U.S. are outperforming the broader market S&P 500 Index. The report highlights that 150 companies/stocks generated at least 95% of their revenues within the USA and outperformed the S&P 500. On a 2013 year to date basis (through May 1), they note their total return beat the...

Can Cyclicals Breakout And Provide Momentum For Higher Equity Prices?

 May 7 2013     David Templeton
We noted in a post a week and a half ago that the market's defensive sectors have been the main driver of the S&P 500 Index's strong performance this year. In this earlier post, Sector Rotation May Be Underway, we noted investors may be rotating out of the defensive sectors and into the more cyclical ones. In that regard, J. C.Parets of All Star Charts wrote an interesting article showing the mor...

Equal Weighted S&P 500 Index Insights

 May 5 2013     David Templeton
Ten years ago Standard and Poor's released its Equal Weighted S&P 500 Index (EWI). Since that time a number of index firms have created equal weighted ETFs that investors are able to invest in directly. In S&P's recently released white paper, 10 Years Later: Where In The World Is Equal Weight Indexing Now?, they cover a great deal of the historical data on the equal weighted index relative to the ...
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