March 12, 2015 - Job Creation
Despite the significant gains in employment over the past 12 months our economy continues to struggle with minimal wage growth and a continued gap in our potential output. Globalization and productivity have been reasons for the absence of wage gains. We believe another issue is also causing stunted wage growth.
Corporations have been the largest buyers of equity for the past few years. This has been the result of shareholder pressure for management to return cash to the shareholder. Companies have taken this to heart and have been repurchasing shares and increasing dividends at a staggering pace. This has left capital spending in suspense. Companies have been forgoing capital spending and using that capital to pay the shareholder. Limited spending on plant and equipment has had a material impact on hiring new employees. Until this changes we will continue to see limited wage growth and a shrinking of the potential output in our economy.
March 3, 2015 - Energy Sector
Knelman Asset Management Group finished off the year 2014 with virtually no exposure to the Energy sector. The decision to reduce exposure in its growth equity portfolios was completed in the September/October period. Late in February, the firm started to increase its weight in the sector as valuation was becoming more compelling despite the significant drop in crude and natural gas prices.
