Should Long-Term Investors Own More Emerging Market Equities?

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Should long-term investors consider allocating more of their equity allocation to emerging markets now? Yes! The iShares Core MSCI Emerging Markets ETF (IEMG) currently trades just above its recent low of $51.25 made on June 27th, the lowest point in just about a year and a potentially attractive entry point. IEMG is the 2nd largest emerging markets ETF with $46 billion in AUM, providing high liquidity, and only charging a 0.14% internal expense ratio. IEMG … Read More

Earnings And Stock Market Valuations

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While US equity markets have struggled to maintain consistent upward momentum roughly halfway through 2018, the underlying earnings that ultimately drive equity valuations have received a boost thanks to decent GDP growth and a pro-business administration, highlighted by the recent corporate tax cut legislation. On a trailing twelve-month (TTM) basis, S&P 500 reported earnings are anticipated to rise 9% in Q2 to a forecasted $125. Analysts believe the TTM growth rate will then continue at … Read More

2018 Mid-Year Update

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Economic Backdrop The “goldilocks” scenario of economic growth with low inflation, necessary for the US Federal Reserve (Fed) to continue its moderate pace of quantitative tightening, evaporated temporarily in early February when inflation data surprised to the upside. Sudden spikes in nominal interest rates from rising inflation expectations signaled an expectation that the Fed’s hand would be forced to raise the benchmark Fed Funds rate more quickly than anticipated. It seemed that the Tax Cuts … Read More

Getting Back To Being In Front of Clients and Prospects – Leaving The Rest To Us

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Financial Representatives are facing higher expectations than ever before. Maintaining a successful relationship with clients requires not only developing a financial plan or tax strategy. In today’s constantly connected world, you must be accessible 24/7 to serve your clients, and somehow find the time to open, service, and manage client accounts, all while handling day-to-day office duties, and reviewing strategic business concerns. These pressures can make the Financial Representative feel encumbered with trying to be … Read More

If Your Client Were Asked?

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If your client was asked by their best friend who they should use as a financial advisor, would this be your client’s answer? “I don’t know exactly what my advisor does, when they will call me next, and they handle 37% of my wealth so you should definitely call them to help you” Well, that probably isn’t the answer you hope they give. And while you think you know what your clients say about you, … Read More

The Crystal Ball Is A Little Hazy

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The Federal Reserve Open Market Committee (FOMC or Fed) meets eight times a year, approximately every six weeks, to discuss and set monetary policy. But just prior to four of those meetings, right around the end of each quarter, the FOMC participants submit projections for five key economic variables. These variables are; real output growth, unemployment rate, overall inflation, core inflation, and short-term interest rates (Federal Funds Rate). Their projections cover three years, as well … Read More

US GDP – Steady As She Goes

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As many people focus on U.S. GDP these days and how it needs to be higher, they seem to be missing something. While the level of recent U.S. GDP has trended lower than in the past, it has become much more stable and steady. While high GDP seems desirable, unsustainably high GDP tends to crash, creating a boom-bust cycle. One can argue that a steadier GDP, even at a somewhat lower level, without the bust … Read More

Hanlon Market Update – Filtering Out The
Short-Term Noise

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Last week, markets tumbled across the board, erasing 2018’s gains for most major global equity indices. Sharp downside market moves like last week’s serve as a reminder that the market will do whatever it needs/wants in the short run, oscillating around news du jour, recent news including trade wars, interest rates, Big Tech under the government microscope, government budgets, Trump tweets, etc. However, earnings and interest rates control the market’s long-term direction. We are long-term … Read More

Rational Thoughts On Rising Rates

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Some prominent fixed-income analysts have officially declared an end to the 30+ year bull market in bonds. The prices of bonds move inversely to the movement of interest rates, and it is obvious that yields on the 10-Year US Treasury Note have broken out of the long-term trend of lower highs with resistance now becoming support (blue line below). While we agree that there are powerful forces supporting higher rates, we wonder how much has … Read More

Volatility Returns Update – Finding Fair Value

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Read the rest of the series here: Volatility Returns – Exploring the Reasons and What Happens Next Volatility Returns Update – Markets Enter Correction Territory. The S&P 500 Index officially entered “correction” territory, defined as a 10% decline from the prior peak, on Thursday, February 8 when the index closed at 2,581, -10.16% below its January 29 all-time high of 2,873. Intraday, it fell as low as -12% below its all-time high. While the correction … Read More