AAII Survey: Investors React to Fed’s Decision to Slow Rate Increases

 

 Since 2015, the Federal Reserve has increased interest rates nine times. While those investing in interest-bearing instruments have applauded these increases, others, including President Trump, have railed against the central bank increasing interest rates too quickly. Following the last meeting of the Federal Open Market Committee (FOMC), Fed chairman Jerome Powell signaled that the central bank…

Your Returns May Be Anything but Average

 

  One argument underlying the notion of holding risky assets in long-term portfolios is time diversification. Time diversification holds that above-average returns tend to offset below-average returns over a long enough period. It’s based on the concept of reversion to the mean: Eventually periods of low and high returns converge back toward their average. The…

Investors’ Views Are Mixed on 2019 Market Sentiment So Far

 

 This week’s Sentiment Survey special question asked AAII members how they view the overall sentiment reflected by the market so far this year. Responses were very mixed. Just under a quarter of all respondents (24%) describe investors as being either cautious or uncertain. Many of these respondents point to the unknown outcomes of trade negotiations…

AAII Sentiment Survey: Neutral Sentiment Rises to a 7-Month High

 

 The percentage of individual investors describing their outlook for stocks as “neutral” is at a seven-month high. The latest AAII Sentiment Survey also shows a drop in optimism and an increase in pessimism. Bullish sentiment, expectations that stock prices will rise over the next six months, pulled back by 4.8 percentage points to 35.1%. Optimism…

Causes of Financial Stress

 

 This week’s AAII Weekly Digest highlights these “must-read” AAII articles: Your Portfolio: Maintaining Perspective Given the recent bumps in the stock market, we revisit an article written in late 2008, during the last market meltdown to give you some perspective. Financial turmoil can prompt an emotional response that causes investors to flee stock holdings. But…

MoneyLife Radio Buy of the Week: U.S. Bancorp (USB)

 

 AAII Journal Editor Charles Rotblut explains to Chuck Jaffe why U.S. Bancorp (USB) is his “Buy of the Week” for February 12, 2019, 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…

Some Perspective on Buybacks Given Recent Criticism

 

  Buybacks have been put back into the spotlight as boogeymen. Earlier this week, Senators Chuck Schumer and Bernie Sanders wrote an op-ed in The New York Times attacking share repurchases. Among their accusations were that stock buybacks mostly benefit the wealthy and divert money from being spent on capital expenditures, salary increases and other worker benefits….

AAII Survey: Causes of Financial Stress

 

 According to the 2015 American Psychological Association’s (APA) annual Stress in America report, nearly 90% of Americans said that their financial stress level “has either remained the same or gotten worse” with time. A recent GOBankingRates survey found that many Americans tap into their emergency savings to cover home costs, medical emergencies and even cost-of-living increases. AAII Weekly…

Is Inflation Bad for the Stock Market?

 

 The debate over whether stocks rise or fall in reaction to inflation continues. But studies indicate what many investors have suspected all along: The market is inconsistent. Editor’s Note: The “throwback” article was written in early 1986. The U.S. economy is experiencing the lowest inflation rates in almost two decades. The stock market is at…

Two-Thirds of Investors Agree With Federal Reserve’s Pausing of Interest Rate Hikes

 

 This week’s Sentiment Survey special question asked AAII members for their thoughts on the prospect of the Federal Reserve pausing its cycle of raising interest rates. Nearly two-thirds of the respondents (65%) agree with the neutral stance. Many of these respondents pointed to the lack of inflationary pressures, approve of chairman Jerome Powell’s talk of…