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

Read More
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

Read More
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

Read More
Nov 26, 2014 | Post by: modelcap Comments Off

Back to “Old Normal” Economy

November labor figures were very strong, showing that U.S. employers added 321,000 jobs, the most since Jan-2012 and better than the most optimistic projection by economists. Previously, Q3-2014 U.S. GDP growth was revised to 3.9% annualized growth rate. Combined with Q2 growth of 4.6%, the U.S. economy has now experienced

Read More
Nov 17, 2014 | Post by: modelcap Comments Off

Why U.S. Stocks Are The Best Performers –

When looking at U.S. equities, it appears that the brief October selloff is all but forgotten. The S&P 500 (ETFs: IVV, SPY) continues to reach new all-time highs, gaining 2.4% in both October and November – for a 13% YTD gain as of Dec 19th. Not so for global markets that

Read More
Oct 24, 2014 | Post by: modelcap Comments Off

Why Everyone Is Buying Stocks Again –

The S&P 500 is the best-performing asset class in the world, finishing November at a new all-time high, for a 14% YTD gain. And after some mild weakness earlier in December, equities rebounded strongly. Based on our research here at Model Capital, we are convinced that fundamentals drive markets. We use

Read More
Oct 20, 2014 | Post by: modelcap Comments Off

The Key to Successful Tactical Management –

To protect against significant equity market downside, some managers adopted technical indicator-based “models”. Unfortunately, such systems amount to selling low and buying high, with performance loss from market “whip-saws” over time far outweighing expected protection benefit. As a result, performance for many managers suffered in 2014. Tactical investment management means

Read More
Oct 03, 2014 | Post by: modelcap Comments Off

How High Is Equity Valuation?

Observers have been citing the high level of Shiller’s P/E (above 26) as reason to predict a drop in U.S. equities. I highlight below some of the details of its calculation that impact how it should and should not be used. First off, Shiller’s cyclically-adjusted P/E (“CAPE”) is often misused

Read More
Sep 26, 2014 | Post by: modelcap Comments Off

Don’t Fret the Fed: Finishing the Job –

The Federal Reserve gets blamed for almost anything. But the fact is, the Fed’s policies helped generate an economic recovery starting in 2009, followed by GDP growth for five years running, despite a long list of headwinds: declining home prices, deleveraging, weak employment, low confidence. On the other hand, the

Read More
Sep 25, 2014 | Post by: modelcap Comments Off

Advisors Grow Their Practice Through VA –

A variable annuity (VA) may be an attractive product for some investors, but does it have to come with high fees? Not at Jefferson National where it costs just $20 a month! The best part – advisors can grow their practice by helping clients and prospects (future clients) transfer VA’s

Read More