BUY OF THE WEEK 4/15/2014

Posted on April 15, 2014 | Podcast

AAII Journal Editor Charles Rotblut explains to Chuck Jaffe of MarketWatch why GATX Corp. (GMT) is his “Buy of the Week” on the MoneyLife Radio Program. MoneyLife is a daily personal finance show that sorts through the financial clutter to bring you the information you need to lead the MoneyLife.

Audio url: Buy of the week

Upcoming Chapter Meeting: AAII Los Angeles

Posted on April 12, 2014 | Local Chapters

Date: Saturday, April 19, 2014
Topic: Global Value: Spotting Bubbles, Avoiding Crashes, and Big Returns
Speaker: Mebane Faber, Chief Investment Officer, Cambria Investment Management

Investment bubbles and manias have existed within markets throughout human history, but investors can learn to avoid the extreme losses that occur when those bubbles burst. Using the time-tested method of valuing securities with earnings smoothed over many years can be very helpful. We can then create a trading system to build global stock portfolios based on valuation, and find significant outperformance by selecting markets based on relative and absolute valuation. In this presentation, Mebane Faber will explain how to do this.

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Upcoming Chapter Meeting: AAII Washington D.C. Metro

Posted on April 12, 2014 | Local Chapters

Date: Saturday, April 19, 2014
Topic: Managing Your Money During Retirement
Speaker: Maria Crawford Scott, Former Editor, AAII Journal

This presentation discusses the best methods for investing and managing your savings during your retirement years. It focuses on how much you can safely withdraw from your portfolio each year to ensure your nest egg supports you throughout your lifetime, withdrawal rules to help squeeze out more from your portfolio and what kind of asset allocation mix is most appropriate during your retirement.

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Posted on April 11, 2014 | Stock Superstars Report

This certainly felt like a rough week, and it was for certain stocks. The main explanation seems to be that investors are continuing to rotate out of momentum and growth stocks and moving their money into value stocks.

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Posted on April 11, 2014 | Dividend Investing

We’re not going to sugarcoat this week’s downward volatility, but we do want to point out that the broader market indexes held up better than the headlines suggest. The S&P 500 index fell 2.7%, the NASDAQ lost about 3.1% and the Dow Jones industrial average gave back 2.4%.

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Upcoming Chapter Meeting: AAII Southwest Florida

Posted on April 10, 2014 | Local Chapters

Date: Thursday, April 17, 2014
Topic: Using Behavioral Finance to Improve Investment Profits
Speaker: Don Cassidy, Founder and President, Retirement Investing Institute

The traditionalist approach to stocks (markets are efficient and rational) has been supplemented by recognizing the crucial human element. Insight into behavioral finance can significantly improve investment and trading results, since it gives a fuller picture of what actually moves the market. This presentation by Don Cassidy will describe key behavioral finance concepts (there’s a lot more than fear and greed!) to help you identify factors penalizing your returns. Specific behavioral finance approaches will show how to measure market sentiment. Cassidy will also include evidence from several charts, as well as some very surprising sources of behavioral finance insight that help with timing entry and exit points.

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Posted on April 10, 2014 | Weekly Features


This week’s AAII Weekly Features has been updated.
View this week’s Top AAII Articles, Featured Stock Screen and Member Question.

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The Mass Index

Posted on April 10, 2014 | Computerized Investing


Using a high-low price range to identify potential trend reversals based on range expansions.

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Making Your First Investments

Posted on April 10, 2014 | Classroom

How Do I Get Started Once I Have My Investing Plan?

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AAII Sentiment Survey: Pessimism Jumps to a 9-Week High

Posted on April 10, 2014 | AAII Survey

Pessimism rose to a nine-week high in the latest AAII Sentiment Survey. Neutral sentiment stayed above average for the 14th consecutive week, while optimism remained below average.

Bullish sentiment, expectations that stock prices will rise over the next six months, plunged 6.9 percentage points to 28.5%. This is the lowest level of optimism registered by our survey since February 6, 2014 (27.9%). It is also the fourth consecutive week with bullish sentiment below its historical average of 39.0%.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, declined 0.4 percentage points to 37.4%. Neutral sentiment is now above its historical average of 30.5% for the 14th consecutive week. This is the longest such streak since 1999 (15 weeks).

Bearish sentiment, expectations that stock prices will fall over the next six months, spiked 7.3 percentage points to 34.1%. This is the largest amount of pessimism since February 6, 2014 (36.4%). It also ends a streak of eight consecutive weeks with bearish sentiment below its historical average of 30.5%.

At current levels, bullish sentiment is right at the border of what we would consider to be a typical or an unusually low reading. The drop in optimism comes as the S&P 500 fell by 2.3% and the Nasdaq lost more than 3.7% over a two-day period.

Some AAII members are fretting about the possibility of a market pullback, elevated stock valuations, the pace of revenue growth, the slow rate of economic expansion and Washington politics. Others remain encouraged by the overall upward momentum of stock prices, earnings growth, economic expansion, the Federal Reserve’s tapering of bond purchases and low interest rates.

This week’s special question asked AAII members how much impact the events in Ukraine are having on their six-month outlook for stocks. Nearly two-thirds of respondents (63%) said the events were having no to very little impact on their outlook. About 11% said the events were having a little impact, while 9% said the events were having some impact. Just slightly more than 5% said the events were causing them to be more bearish.

Here is a sampling of the responses:

  • “None, unless Russia becomes more aggressive.”
  • “Minimal at most.”
  • “Not much, it’s just a disturbing and sad mess.”
  • “None at this time.”
  • “Some. Clearly it adds risk.”

This week’s AAII Sentiment Survey results:

  • Bullish: 28.5%, down 6.9 percentage points
  • Neutral: 37.4%, down 0.4 percentage points
  • Bearish: 34.1%, up 7.3 percentage points

Historical averages:

  • Bullish: 39.0%
  • Neutral: 30.5%
  • Bearish: 30.5%

The AAII Sentiment Survey has been conducted weekly since July 1987 and asks AAII members whether they think stock prices will rise, remain essentially flat, or fall over the next six months. The survey period runs from Thursday (12:01 a.m.) to Wednesday (11:59 p.m.) The survey and its results are available online at:

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