Mar 26, 2015 | Post by: modelcap Comments Off

Tactical Management: From Theory To Implementation

Confused by “tactical management?” You are not alone – it continues to be a broad term that includes a variety of active investment strategies. I wanted to share my latest article, Tactical Investment Management: From Theory To Implementation, just published by IMCA’s Investments & Wealth Monitor. In it, I try to clarify these issues:

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Mar 20, 2015 | Post by: modelcap Comments Off

Fundamentals Drive Equities

U.S. Equities were the best-performing asset class in the world in 2014, with the S&P 500 delivering a 13.7% return – and they continue to reach new highs this year. What keeps driving the gains? At Model Capital, we believe that fundamentals drive markets, not geopolitics or technical indicators. Fundamental indicators

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Mar 17, 2015 | Post by: modelcap Comments Off

Why Are Consumers Not Spending?

Retail sales declined by a cumulative 2.6% in the past three months (the red line on the 5-year chart below) – the deepest drop since 2009. This is especially surprising given the recent labor market improvements (Jobless Claims are shown by the blue line) and the drop in energy prices. Consumers

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Mar 09, 2015 | Post by: modelcap Comments Off

How Strong Is U.S. Employment

February payrolls reported on Mar 6 increased by a stellar 295,000, much more than the 235,000 consensus expectation. Unemployment also continued to improve, inching down to 5.5% from 5.7% last month (although some of the improvement was due to a decline in labor participation). Initial jobless claims were reported last

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Mar 04, 2015 | Post by: modelcap Comments Off

Earnings Slowed in Q4, Expected To Fall in Q1

Q4-2014 S&P 500 earnings growth was sluggish at 3.7% YoY – a significant slowdown from around 8% growth in Q2 and Q3. The Energy sector was primarily responsible for lower earnings due to the drop in oil price. Earnings grew by 5% for the full year 2014.        

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Mar 01, 2015 | Post by: modelcap Comments Off

What’s Tactical Management?

Tactical Management continues to be a broad and ambiguous term that includes a variety of active investment strategies. In my recent interview on Harvest, I tried to provide some clarity: I like to define Tactical Management as being synonymous with Tactical Asset Allocation or TAA: focusing a portfolio on asset

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Mar 01, 2015 | Post by: modelcap Comments Off

The Good, The Bad Economic Indicators -

Employment continues to be among “the good,” showing continued strength this year. Employers added a better-than-expected 257,000 jobs to payrolls in January after a very strong December (see chart below). Initial jobless claims remain below 300,000 on a 4-week average basis for over 4 months now – the best stretch since

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Dec 17, 2014 | Post by: modelcap Comments Off

Don’t Fret the Fed: Policy Changes Are Priced-In

At the latest meeting on Nov 16-17, the Federal Reserve replaced its commitment to keep short-term interest rate target near zero for a “considerable time” with language that it will be “patient” in removing stimulus. It means that it’s on track to raise short-term target rate in the middle of 2015. The

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Dec 16, 2014 | Post by: modelcap Comments Off

2014: the year of the United States –

What kind of year was 2014? In financial markets, 2014 should go down as the year of the United States. The Year of U.S. Markets: S&P 500 (IVV), Japan (EWJ), Europe (IEV), Emerging Markets (IEMG) In a remarkable decoupling from the rest of the world, U.S. equities by far outperformed international

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Dec 02, 2014 | Post by: modelcap Comments Off

What Oil Crash Means for U.S. Equities –

Crude #oil sank below $60 per barrel of the WTI contract. This confirms that the fundamental supply-demand situation was very negative, as I highlighted in recent posts. So, the continued fall in oil prices was to be expected. However, the speed of the crash was a bit of a surprise and created some anxiety

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