Horan Capital Advisers’ Spring 2019 Investor Letter

Horan Capital Advisors is a Cincinnati, Ohio-based investment advisory firm, that was launched in June 2010. It offers its professional services to both institutional and individual clients requiring principal balances of more than $1 million. The firm’s president and CEO is Mr. Terence Horan, who has 40 years of professional experience in the finance world. Recently, Horan Capital Advisors has published its Spring 2019 Investor Letter, a copy of which you can download below. In the letter, the firm analyzed the current market conditions in regards to the S&P 500’s positive performance, yield curve, and the overall economy.

Spring 2019Equity Market Rebound in First Quarter 2019

Stocks bounced back with the best quarterly start for the S&P 500 Index since 2009 after a weak showing at the end of last year. The two charts on the right detail the return for the market and S&P 500 Index sectors for the fourth quarter of 2018 and the first quarter of 2019. Largely, the worst performing market segments in the fourth quarter last year have turned out to be the best performing ones in 2019. The strongest performing sectors being Technology, Real Estate (REITs) and Industrials. As we noted in our year-end Winter Investor Letter, we believed many of the negatives were priced into the equity market and that 2019 would be a positive year for equity investors. The surprise was the strength of the bounce.

horan capital graph

horan capital graph 2

A strong returning quarter like that just experienced raises the question about returns for the balance of the year. We have said in the past that strength tends to beget more strength. In a recent report, LPL Research noted there have been ten other times since 1950 where the S&P 500 Index was up greater than 10% in the first quarter. In 9 out of 10 of those periods, the final three quarters were positive and in all 10 periods returns were positive for the year. The average gain in those final three quarters was 16.1%; however, the path was not straight and the average pullback was 11.7%.

You can download a copy of Horan Capital Advisers’ Spring 2019 Investor Letter here:

Investor Letter Spring 2019