One of the many indicators that we follow:
This week:
Bullish: 51.9%, up 5.8 points
Neutral: 28.8%, down 1.4 points
Bearish: 19.2%, down 4.4 points
Historical Averages:
Bullish: 39.0%
Neutral: 30.5%
Bearish: 30.5%
(Source: AAII)
Is the Euro Zone dealing with the same deflationary issues that the Fed was grappling with a few years ago?
With the drop in headline euro-zone inflation to 0.3% in August from 0.4% in July, calls for further ECB action—including large purchases of sovereign bonds—are getting louder. Clearly, inflation is far adrift of the ECB’s target of “below, but close to” 2%.
But once again, virtually all of the decline is due to volatile prices for energy, food, alcohol and tobacco. Excluding those, euro-zone inflation rose to 0.9% from 0.8%. Of the decline in headline inflation from 1.3% a year ago, nearly 90% is attributable to moves in energy and food prices.
With core inflation stable, it is hard to see deflation as a threat, even if market-based measures of inflation expectations have proved wobbly recently. More relevant in any case is the attitude of consumers and entrepreneurs to inflation. If lower food and energy prices are proving a cushion for stretched individuals and businesses, then that may be no bad thing. But the longer low inflation persists, the more it may become a problem if, for instance, it starts to drive wage settlements.
(Source: WSJ)
Per a recent article in the WSJ, the average solar module prices have come down from $3.95 per watt in 2008 to $0.65 per watt recently. That is a dramatic decline as the industry has gone through a full demand/supply cycle, since we started looking at this space in 2006/2007.
Tuesday’s finish was the 30th record close this year for the index, which has gained 8.2% in 2014 through the end of trade on Tuesday. The Dow industrials hit an intraday record of 17153.80 on Tuesday but failed to hold a record through the close.
The rally through 2000 marks the S&P’s third major upswing since the late 1990s. The index first breached the 1000 mark on Feb. 2, 1998, and ran as high as 1527 in March of 2000 only to break back below 1000 briefly in September of 2001 and again in June of 2002. The post tech-bubble bull market, which saw the S&P push above 1560 in October 2007, was halted by the onset of the financial crisis. That bear market knocked the index down through 1000 in October 2008 to a multi-year closing low of 676.53 on March 9, 2009.
With the latest milestone in the rear-view mirror, some investors are wondering how much further stocks can go.
(Source: WSJ)
The portfolio managers atop the country’s most respected university endowments failed to make the honor roll during the current bull market despite their top salaries and genius IQs. Harvard University’s $32.7 billion endowment returned an average of 10.5% annually over the past three years through June 2013 versus 18.45% for the S&P 500, including dividends, over that same period, the Wall Street Journal reported. Yale University’s $21 billion juggernaut gained 12.8% annually over the same period.
Underperformance this market cycle is hardly a reason for endowment managers to be ashamed. All investment strategies experience bouts of underperformance. Looking back 10 and 20 years, endowments outperformed the stock market with a lot less volatility. Endowments failed to live up to expectations this bull market cycle because they’re thin on equities and heavy on alternative assets, which lagged the stock market the past five years. For example, the Yale Endowment has only 11% of assets invested in foreign markets and 6% in domestic stocks. About half of Yale’s portfolio is invested in alternative or illiquid assets such as hedge funds, private equity, venture capital, real estate, timber, oil and gas.
“Less liquid markets exhibit more inefficiencies than their liquid counterparts, illiquid markets create opportunities for astute investors to identify mispricings and generate outsized returns,” the Yale Endowment 2013 report stated. “Intelligent pursuit of illiquidity is well suited to endowments, which operate with extremely long time horizons.”
To read the full article and the 5 reasons why endowments must stick with their long term investing strategy, follow this link.
Novartis and Google are working together to develop a smart contact lens designed to monitor blood-glucose levels while also correcting vision. Currently individuals have to rely on a finger prick test to monitor blood-glucose levels. The smart lens method is more accurate and less invasive. The lens is equipped with a tiny sensor that will analyze the amount of glucose in tears and then relay this information through an antenna. It also has the ability to wirelessly transmit the information to an app on a mobile device. Tears also contain a biomarker, lacryglobin, for breast, colon, lung, prostate, and ovarian cancers. Measuring the lacryglobin levels could help to monitor patients in remission. Ultimately, this type of technology could help individuals better manage their own health and prevent disease through early detection.
(Source: WSJ)
Insurance general account assets are trending towards expanded use of alternative investments, says new Cerulli Associates research, accelerated by an anticipated rise in interest rates. Click on the link to read the article:
$12 billion
The value of the company created if BHP Billiton spins off its nickel, aluminum and other properties, in what would be one of the biggest asset sales in mining history.
(Source: WSJ)
APPLETON, WIS. — Alta Trust Company has partnered with ETF Model Solutions, LLC. to launch the Endowment Collective Fund (CUSIP: 26923F105). The Endowment Collective Investment Fund (CIF) seeks to improve risk-adjusted returns of traditional two-dimensional portfolios of stocks and bonds by adding alternative investments, such as private equity, hedge strategies and real assets to create a 3-dimensional portfolio. ™
Managers of university endowments, pension, and defined benefit plans have historically utilized lower-correlated alternative investments to improve the risk-adjusted returns of their portfolios. ETF Model Solutions, through the Endowment CIF, now brings the Endowment Investment Philosophy™ to the defined contribution plan space. However, rather than private placements or limited partnerships, the Fund uses liquid alternative investments, such as exchange-traded funds and mutual funds to obtain its alternative asset allocations.
ETF Model Solutions believes that the 3-dimensional Endowment CIF offers 4 major benefits when compared to most target date or balanced funds: (1) added protection for the Plan Sponsor, as both the trustee and the manager of the CIF serve in a fiduciary capacity; (2) reduced portfolio volatility than portfolios with greater equity allocations due to its hedge strategy holdings; (3) protection from inflation due a greater allocation to real assets, such as commodities, precious metals, real estate and infrastructure investments; and, (4) lower interest rate risk due to a smaller allocation to fixed income investments.
The Endowment CIF utilizes a core-satellite portfolio construction with low-cost, cap-weighted equity and fixed income ETFs comprising the core allocation of the asset class, with fundamentally-weighted funds utilized in an attempt to gain alpha. The strategically-managed Endowment CIF is presently targeted to an allocation of 40% global equity, 20% global fixed income and 40% liquid alternative investments.
Alta Trust maintains selling agreements with most major retirement plan platforms, thus plan advisors can offer the Endowment CIF to their Plan Sponsor clients through their existing platform relationships. Plan Sponsors can add the Endowment CIF to their retirement plans through a simple participation agreement, while maintaining their current investment options as well as their existing advisor/TPA/recordkeeping relationships.
CIFs are pooled investment funds available only to qualified retirement plans such as defined contribution 401(k) and defined benefit plans and are regulated by state and federal organizations, such as the Office of the Comptroller of the Currency. CIFs are priced daily through the NSCC, just like mutual funds.
ETF Model Solutions, LLC. (Fund Investment Manager) is a Third Party ETF Strategist that specializes in creating customizable ETF-based asset allocation models. ETF Model Solutions is co-creator of the Endowment Index™ calculated by Nasdaq OMX® (Symbol: ENDOW).
Alta Trust (Fund Trustee) is an innovative financial services firm that acts as trustee for collective investment funds which feature unique money managers. The professionals at Alta Trust have been working with qualified plans for over three decades and provide daily oversight of all fund trading activity and accounting, as well as annual auditing of the fund to assure accurate and reliable account balances.
Disclosure
Alta Trust Company is a South Dakota chartered trust company that acts as trustee of the Funds. Collective Investment Funds are bank maintained trust funds and are not registered with the Securities and Exchange Commission. The Declaration of Trust for the Trust describes the procedures for admission to and withdrawal from a Fund. The Declaration of Trust and the Fund’s Employee Benefit Summary should be read in conjunction with this information. The information contained in this communication is for informational purposes only and is not intended to provide legal or tax advice. Before investing in any Fund, Alta Trust recommends that potential investors consider the Fund’s investment objective, strategies, risks and expenses. We recommend that investors consult with their financial, legal and tax advisers prior to investment in any fund. Potential investors in any Fund may obtain a copy of the Employee Benefit Summary from the plan sponsor or from Alta Trust or ETF Model Solutions, LLC.
| Not FDIC Insured | May Lose Value | No Bank Guarantee |