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Aug 31, 2015 | Post by: modelcap Comments Off on Short-Term Rhyme

Short-Term Rhyme

“No occurrence is sole and solitary, but is merely a repetition of a thing which has happened before, and perhaps often.”  – Mark Twain, The Jumping Frog Investors were shaken by a global equity plunge in the past two weeks. Emerging markets were already falling this year, due to plunging commodity prices and

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Aug 18, 2015 | Post by: modelcap Comments Off on How Housing Will Impact the Economy

How Housing Will Impact the Economy

July Housing Starts were reported today above expectations, at 1.206 annual rate, the highest in 8 years. It is a strong number. To understand its expected impact on the overall economy going forward, let’s take a longer-term view. In the chart, I show Housing Starts, a measure of U.S. home building

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Aug 12, 2015 | Post by: modelcap Comments Off on Should you be concerned about U.S. equities?

Should you be concerned about U.S. equities?

Anxiety is running high as financial media keep focusing on the Fed preparing to raise rates in September, on China, and on the “death cross” in some technical charts. Understandably, advisors are concerned as well – we answered several questions from our advisor clients in the past week. At times

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Jun 25, 2015 | Post by: modelcap Comments Off on Consumers Are Back –

Consumers Are Back –

After a winter hiatus, consumers are back! Spending increased by 1.36% in May according to the Census Bureau, well above economists’ expectations. Employment that’s the strongest in 15 years by some measures, higher home prices, and savings form lower energy prices, are helping Americans feel secure enough to boost spending.

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Jun 11, 2015 | Post by: modelcap Comments Off on Tactical bond strategies for low-rate environment –

Tactical bond strategies for low-rate environment –

This is our tactical management update on our current view on the bond market. We at Model Capital utilize our fixed income models to help advisors who actively manage fixed income portfolios in their efforts to achieve better yield for their clients while reducing exposure to rising interest rates. The

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Jun 01, 2015 | Post by: modelcap Comments Off on Does Greece Matter?

Does Greece Matter?

What consequences would a Greek default have? My answer would be very different depending on, consequences – for whom. For Greece, in my opinion it would be devastating. Locked out of debt markets and without further aid, Greece would have enormous difficulty finding funds to pay government workers and cover

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May 31, 2015 | Post by: modelcap Comments Off on Tactical Management: From Theory To Implementation –

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 tried to clarify these questions:

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May 31, 2015 | Post by: modelcap Comments Off on Many Investors Are Still in Cash –

Many Investors Are Still in Cash –

Bankrate.com recently published the results of their Financial Security Index survey. Americans where asked where they prefer to keep the #money they would not need for 10 years. 25% of investors still prefer to keep the money in savings and CDs, where it earns practically nothing! 23% prefer real estate, 19% the

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May 31, 2015 | Post by: modelcap Comments Off on The Biggest Problem for Active Investors –

The Biggest Problem for Active Investors –

– is not the economy or geopolitics. It is their own sentiment. The current mild market weakness has many investors concerned and selling stocks. In recent years, most times this happened, the market “whip-sawed” back up. Investors make decisions based on subjective opinions of the experts – or their own –

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May 31, 2015 | Post by: modelcap Comments Off on Liquidity Continues to Support Asset Prices

Liquidity Continues to Support Asset Prices

All major central banks – the Fed, ECB, and BoJ – bought bonds since 2008, creating tremendous influx of liquidity (see chart). This kept interest rates low, and boosted the global economy through low borrowing costs for consumers and businesses. The Federal Reserve ended its bond-buying quantitative easing (QE) stimulus in

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