A seemingly rare occurrence has taken place with the close of trading on Friday. The S&P 500 Index has declined for two weeks in a row. The last time this occurred was in November of last year. This is a testament to how strong the market advance has been so far this year.
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| From The Blog of HORAN Capital Advisors |
The sectors that have been the weaker performers during this pullback or consolidation have been the traditionally more defensive ones, e.g., consumer staples, utilities, telecommunications. Also, the indices that are focused on dividend paying stocks have underperformed the broader market (S&P 500) as well.
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| From The Blog of HORAN Capital Advisors |
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| From The Blog of HORAN Capital Advisors |
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| From The Blog of HORAN Capital Advisors |
As noted in several prior blog posts, investors seem to be chasing the higher yielding dividend paying stocks, viewing them as potential bond substitutes. This heightened interest in the dividend payers has pushed the valuations of many of them to stretched levels. With a little market weakness it appears these investors are finding out these dividend payers can be volatile also and they are reducing their position sizes.
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