Monthly Archives: August 2010

Can the U.S. Housing Rebound stand on its Own?

In our July 22, 2010 post entitled, “The Broader Implications of a Housing Rebound,” we questioned how much of the surge in existing home sales seen thus far in 2010 was solely attributable to the federal tax credit program. While the final answer has yet to be determined, initial feedback seems to be pointing to a significant level of attribution.Read more

What most Individual Investors do Wrong?

Nationally recognized research firm Dalbar recently produced the results of a study on the overall performance effects of individual investor behavior. In doing so, they compared the returns of the stock market (as defined by the S&P 500 index for these purposes) and the returns of the average individual investor in equities over a 20 year period that started on December 31, 1989 and ended on December 31, 2009. Interestingly, the study showed that the average return of the S&P 500 over that period was 8.20% while the average return of the individual investor was just 3.17% over the same time period. This represents a relatively stark 5%+ difference.Read more

The Broader Implications of a Housing Rebound

We, at Hennion & Walsh, are observing growing momentum towards the stabilization of the residential real estate market as well as an intriguing opportunity for inclusion of this alternative asset class in diversified growth portfolios.Read more

The S&P 500 200 Day Moving Average Revisited

In terms of the potential for a near-term pullback in the equities market, our research suggests that the probability of occurrence may be increasing. As you will recall from an earlier Portfolio Strategy News post on June 4, 2009, we contend that the S&P 500 200 Day Moving Average, with a 5% margin of safety, can be utilized, in conjunction with other market data, as a fairly reliable overall market timing statistic. It is our opinion, at Hennion & Walsh, that merely crossing through the 200 Day Moving Average is not a sufficient signal alone. When markets are moving quickly in the midst of seemingly trendless volatility, the average could be crossed in both directions on multiple occasions without presenting any clear market signals. As a result, we utilize a 5% margin of safety for our own internal assessments.Read more

Consumers Losing Confidence

It should not be surprising to see that consumer confidence is waning and yet the market appears to have been caught off-guard by the magnitude of the recent decline in consumer confidence. While reports showing that growth in China is beginning to slow down may have contributed to the turnaround in the equity markets, the major culprit appears to have been the Conference Board's consumer confidence reading for June which showed the index dropping from 62.7 to 52.9 - close to a 16% month over month decline! The drop even caught the experts by surprise as economists were expecting a reading of 62.8.Read more