Nov 26, 2014 | Post by: modelcap Comments Off

Back to “Old Normal”

Q3-2014 U.S. GDP growth was revised today to 3.9% annualized growth rate. Combined with Q2 growth of 4.6%, the U.S. economy has now experienced the two strongest back-to-back quarters of growth in 11 years. The term “new normal” was coined by Mohamed El-Erian, then-CEO of Pimco, to describe the U.S. economy

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Nov 17, 2014 | Post by: modelcap Comments Off

U.S. Stocks Are The Best YTD Performers

When looking at U.S. equities, it appears that the severe October selloff is all but forgotten. After a 2.4% gain in October, the S&P 500 (ETFs: IVV, SPY) continued to reach new all-time highs – for a 1.2% gain so far in November, and 12.3% YTD. Not so for global

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Nov 10, 2014 | Post by: modelcap Comments Off

Q3 Earnings Growth is Strong at 7.9%

The S&P 500 Q3 earnings are growing at 7.9% YoY, according to Factset. Growth is much better than analysts’ estimates of 4.6% on Sep 30; and above-average 77% of companies beat estimates. Revenue growth is also strong, 4% YoY. Some tactical investment managers are concerned that equities are overvalued –

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Oct 28, 2014 | Post by: modelcap Comments Off

Oil Price: Beginning Of A Downtrend

#Oil price plummeted below $75/bbl of U.S. WTI contract. Will Saudi Arabia back calls for reducing output by other OPEC nations at Nov-27th oil ministers’ meeting? The answer is – it doesn’t matter for mid-term trend in oil price. Supply-demand fundamentals is what drives the price of oil over a

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Oct 24, 2014 | Post by: modelcap Comments Off

Why Everyone Is Buying Stocks Again

What a difference a month can make in the market! In the week of October 15th equities seemed to be in a free-fall. The S&P 500 dropped to its intra-day low of 1821 and registered a 9.4% loss from its peak (7.3% loss on an end-of-day basis). But since then, the

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Oct 20, 2014 | Post by: modelcap Comments Off

The Key to Successful Tactical Management

What a volatile month October was! The S&P 500 sold off by 7.4% from peak to trough on the closing basis, then regained the lost ground and more, finishing the month up 2.4%. To protect against significant downside, many managers adopted technical indicator-based stop-loss, or “risk-management” systems. Unfortunately, such systems

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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

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Sep 26, 2014 | Post by: modelcap Comments Off

Don’t Fret the Fed: Finishing the Job

People like to blame the Fed for almost anything. The fact is, the Fed’s policies helped generate an economic recovery starting in 2009, followed by GDP growth for five years running, despite significant headwinds (declining home prices, deleveraging, weak employment, low confidence). On the other hand, the more hawkish European

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Sep 25, 2014 | Post by: modelcap Comments Off

Model Capital is now available on Jefferson National –

A variable annuity (VA) is a great tax-deferred way to invest, but does it come with high fees? At Jefferson National it costs just $20 a month! The best part – advisors can grow their practice by helping clients transfer VA’s from expensive providers to JeffNat, while maintaining tax deferral.

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Sep 19, 2014 | Post by: modelcap Comments Off

Why We Need Inflation –

As soon as the Fed’s policies are mentioned, almost every intelligent person thinks of the threat of dangerous, damaging, ugly… Inflation! This includes ordinary folks as well as “experts” – academics, billionaire hedge fund managers, and politicians. In the meeting on October 28-29, the Fed ended its bond-buying QE stimulus program.

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