Posted on August 31, 2012 | Stock Superstars Report

Stock Superstars alert for the week ending 8/31/2012 updated.

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Posted on August 31, 2012 | Dividend Investing

Dividend Investing alert for the week ending 8/31/2012 updated.

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The September 2012 issue of the AAII Journal is now available on-line

Posted on August 31, 2012 | AAII Journal

Charles Dow’s Theory Still Valid for the 21st Century

Dow Theory relies on both the Dow Jones industrial average and the Dow Jones transportation average to determine whether a true market trend exists.

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Gadget Corner – booq Cobra brief L

Posted on August 31, 2012 | Computerized Investing

Mid-sized briefcase-style laptop bag.

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AAII Investor Update: New 401(k) Information

Posted on August 31, 2012 | Investor Update

If you have a 401(k) plan, you should have received new documentation by today. Though it may seem like more fine type and regulatory jargon, the new documentation is actually expanded information about performance, fees and expenses. Be sure to read it.

The expanded information is mandated by a new Labor Department requirement that plan sponsors provide increased transparency on costs. According to an AARP survey, many employees incorrectly think they aren’t paying any fees. It is likely that many others have no idea what their plans cost. Since every dollar paid in expenses is a dollar you will never see again—or be able to turn into greater wealth—what you pay in fees is no small matter. That’s not to mention that as the value of your retirement savings increases, the total dollar amount of what you pay in fees also increases. (Mutual fund companies and plan advisers take a percentage cut of total assets.)

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Upcoming Chapter Meeting: AAII St. Louis

Posted on August 30, 2012 | Local Chapters

Date: Thursday, September 6, 2012
Topic: A Structured Approach to Fundamental Stock Analysis
Speaker: Doug Gerlach, Editor-in-Chief, Investment Advisory Service

What are the keys to successful fundamental stock selection? Doug Gerlach, president of ICLUBcentral Inc., and editor-in-chief of its Investor Advisory Service (IAS) newsletter, will present the structured approach to stock analysis used by his IAS analysts and customers. He will focus on key factors that reveal a company’s true underlying growth and quality, as well as how to determine a realistic valuation model for its stock.

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The Role of REITs for Long-Term Investors

Posted on August 30, 2012 | AAII Journal

The German statesman Konrad Adenauer was quoted as saying “We all live under the same sky, but we don’t all have the same horizon.”

That’s certainly true of investors: We all live among the same set of assets, but how we combine them into an investment portfolio depends on our own circumstances—including our investment horizons.

To simplify, we might say there are two types of investors. The first type—call them tactical—pays attention to short-term fluctuations, hoping to identify opportunities to buy undervalued assets or to sell overvalued ones. Tactical investors play an active role in identifying mispricings and trading in a way that tends to eliminate them. For tactical investors, correlations among asset classes are less important than current valuations—and volatility may actually be good, because it creates trading opportunities.

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Grant Henning’s Fundamental-Value Stock Trading System

Posted on August 30, 2012 | Computerized Investing

After Henning developed a technical-momentum approach to stock-picking, he discovered that there are times when value stocks with strong earnings do better. A look at Henning’s ranking system using a fundamental-value approach.

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AAII Sentiment Survey: Optimism Falls Back Below Average

Posted on August 30, 2012 | AAII Survey

Bullish sentiment retreated and pessimism reached a four-week high in the latest AAII Sentiment Survey.

Bullish sentiment, expectations that stock prices will rise over the next six months, fell 7.2 percentage points to 34.7%. Optimism is now at a four-week low. Bullish sentiment is also below its historical average of 39% for the 21st time in the past 22 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, edged up 0.5 percentage points to 32.6%. This is the fifth consecutive week and the ninth out of the past 11 weeks that neutral sentiment has been above its historical average of 31%.

Bearish sentiment, expectations that stock prices will fall over the next six months, rebounded by 6.8 percentage points to 32.6%. This is the first time since August 2, 2012, that pessimism is above its historical average of 30%.

A pause in the recent rally deflated some of the cautious optimism registered in last week’s survey results. Though some investors are encouraged about the continued growth in the U.S. economy, others remained worried about slowing global economic growth, Washington politics and the European sovereign debt crisis.

This week’s special question asked AAII members whether this year’s 12.4% rise in the S&P 500 (as of August 23, 2012) is warranted. Responses were almost evenly split, with those who thought the rally wasn’t justified slightly outnumbering those who thought it was justified. Reasons varied, though several members cited the Federal Reserve’s actions, weak U.S. economic growth and European sovereign problems as reasons why the rally isn’t justified. Conversely, several members pointed to corporate earnings and the lack of better investment alternatives as reasons why stocks should be up this year.

Here is a sampling of the responses:

  • “Not warranted since the economy is weak and profit margins are not sustainable.”
  • “I think the rally is somewhat artificial. It’s propped up by the Federal Reserve’s policies and hype.”
  • “I’m not totally sure what’s causing it. Too many negative areas globally to be that optimistic (China, the Fed, Europe, etc.).”
  • “Yes, it is warranted. Where else is there to put your money and get a decent return?”
  • “I think last year’s flat market and this year’s corporate earnings support the 12% rise.”
  • “Stock prices are catching up with corporate earnings and balance sheet strength, so yes, the rally is warranted.”

This week’s AAII Sentiment Survey results:

  • Bullish: 34.7%, down 7.2 percentage points
  • Neutral: 32.6%, up 0.5 percentage points
  • Bearish: 32.6%, up 6.8 percentage points

Historical averages:

  • Bullish: 39%
  • Neutral: 31%
  • Bearish: 30%

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:



Posted on August 29, 2012 | Computerized Investing

Moo0 Magnifier is a free and easy to use program that magnifies the content on a users screen to make it easier to read.

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