Managing the Mental Aspect of Investing

Posted on December 10, 2012 | AAII Journal

Investors should consider whether they are being influenced by a good or bad herd behavior and who is on the other side of a trade.

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Economic Data

Posted on December 9, 2012 | Computerized Investing

Where to go online to track the trends in domestic and global economies.

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12/8/2012 automatic update and SSG files are available

Posted on December 8, 2012 | Stock Investor Pro

Automatic update for Stock Investor Pro and SSG files as of 12/8/2012 are available.

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CI Weekly Features: December 8, 2012

Posted on December 8, 2012 | Computerized Investing

Economic Data
Where to go online to track the trends in domestic and global economies.

Point and Figure Charting
Understanding how to create and interpret rows of X’s and O’s, and where to find point and figure charts.

Evernote for Android
Stay organized, save your ideas and improve productivity with Evernote, a free Android app.

Gadget Corner – LG TONE+ Bluetooth Headset (HBS730)

A wireless stereo headset with enhanced audio and noise reduction.

Sitelight – Freakonomics

Freakonomics.com is a financial and economics blog that reveals “the hidden side of everything,” using statistical and behavioral economic models.

This Week’s Question

Do you use Tumblr?

A) Yes
B) No
C) What’s Tumblr?

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STOCK SUPERSTARS ALERT FOR THE WEEK ENDING 12/7/2012

Posted on December 7, 2012 | Stock Superstars Report

Stock Superstars alert for the week ending 12/7/2012 updated.

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DIVIDEND INVESTING ALERT FOR THE WEEK ENDING 12/7/2012

Posted on December 7, 2012 | Dividend Investing

Dividend Investing alert for the week ending 12/7/2012 updated.

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Dividends’ Unintended Consequences

Posted on December 7, 2012 | Investor Update

There are three unintended consequences on dividend stocks and dividend investors being caused by the uncertainty of 2013 tax rates. The consequences are an extraordinarily large number of special dividend declarations, the early payment of typical first-quarter dividends and the future adverse impact on dividend growth rates for certain companies. These unintended consequences are a subject we are discussing in the December AAII Dividend Investing monthly report, and I’ll share an overview about them here.

Howard Silverblatt, the senior index analyst at S&P Dow Jones Indices, counted special dividend (extraordinary distributions that will not be repeated in the future) declarations from 228 companies occurring last month. To put this number in perspective, total annual (not monthly, but annual) special dividend declarations have averaged 181 over the past eight years. Only 2007 saw more declarations than November 2012 (233 for all of 2007 versus 228 for November 2012).

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GADGET CORNER – Samsung Galaxy Note

Posted on December 7, 2012 | Computerized Investing

The Samsung Galaxy Note is designed to be a hybrid between a phone and a tablet, aptly nicknamed by many in the industry as a “phablet.”

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AAII Sentiment Survey: Optimism at Highest Level since March

Posted on December 6, 2012 | AAII Survey


Bullish sentiment rose to its highest level since March 29, 2012, even as bearish sentiment stayed above its historical average for the 15th consecutive week in the latest AAII Sentiment Survey.

Bullish sentiment, expectations that stock prices will rise over the next six months, rose 1.3 percentage points to 42.2%. This is both the highest level of optimism registered by the survey and the first time bullish sentiment has been above its historical average of 39% on consecutive weeks since last March.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, declined 1.5 percentage points to 23.2%. This is the 10th time in 12 weeks that neutral sentiment is below its historical average of 30.5%.

Bearish sentiment, expectations that stock prices will fall over the next six months, edged up 0.2 percentage points to 34.6%. This is the 15th consecutive week and the 31st out of the last 35 weeks that bearish sentiment is above its historical average of 30.5%.

The short-term outlook among AAII members has improved dramatically since November 15, 2012, with bullish sentiment jumping 13.4 percentage points. A good start to the holiday shopping season and the market’s ability to hold steady despite continued uncertainty about the outcome of budget and tax negotiations in Washington are helping to boost optimism.

Seasonality may also be playing a role. In a report last week, Sam Stovall, the chief equity strategist for S&P Capital IQ, said December has the highest monthly average bullish sentiment readings. According to Stovall, since our survey started in 1987, bullish sentiment has averaged 41.8% in December. December also ranks number one in terms of S&P 500 performance. Stovall calculates an average December monthly gain of 1.36% for the S&P 500, using data dating back to 1900.

Even with the improvement in bullish sentiment, it is worth noting that bearish sentiment continues to stay at above-average levels. Failure by Congress and the president to avoid the fiscal cliff would likely have a damaging impact on individual investors’ moods, especially if it seemed that the standoff would be protracted. Furthermore, many AAII members remain concerned about the pace of economic growth, ongoing political gridlock and Europe’s sovereign debt crisis.

This week’s special question asked AAII members for their opinions about companies declaring special dividends or paying their typical first-quarter dividend before the end of this year. The majority of survey respondents said such actions were a good idea given the possibility of higher tax rates next year. Several respondents differed, however, saying that the actions benefited executives and large shareholders, were a ploy to attract new shareholders or may not be the best use of company resources. A small group of respondents were indifferent, saying these actions will have no lasting impact. Several AAII members pointed to the ongoing gridlock over the fiscal cliff as the reason for the special dividends and the accelerated dividend payments.

Here is a sampling of the responses:

  • “Given the uncertainty about tax reform, this may be a good approach for both the companies and investors.”
  • “Great. Less potential tax to pay to the IRS.”
  • “I think it is fine so long as the companies are not borrowing to make the dividend payments.”
  • “I’m not against it. I really wish, though, we had a political system that absolutely worked for all of us citizens.”
  • “It is more in the interest of the CEOs and board of directors than in the interest of the average shareholder.”
  • “I think it is short-sighted and a bad idea.”

This week’s AAII Sentiment Survey results:

  • Bullish: 42.2%, up 1.3 percentage points
  • Neutral: 23.2%, down 1.5 percentage points
  • Bearish: 34.6%, up 0.2 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: http://www.aaii.com/sentimentsurvey

 



November AAII Association Survey: Equity Allocations at a 2012 Low

Posted on December 6, 2012 | AAII Survey

Equity allocations fell to their lowest level of the year as individual investors boosted their cash allocations, according to the latest AAII Asset Allocation Survey.

Stock and stock fund allocations fell 2.5 percentage points to 58.6%. This is the lowest allocation to equity investment since December 2011. It is also the third consecutive month AAII members have reduced their exposure to stocks and stock funds. The historical average is 60%.

Bond and bond fund allocations declined 0.1 percentage points to 21.2%. This is a four-month low for fixed-income allocations. Even with the decrease, November was the 41st consecutive month that fixed-income allocations were above their historical average of 16%.

Cash allocations rose 1.3 percentage points to 20.2%. This is the largest percentage allocated to cash since July 2012. Even with the increase, cash allocations were below their historical average of 24% for the 12th consecutive month

Optimism about the short-term direction of stock prices remained below its historical average for much of November. Though many of our members take a longer-term outlook when it comes to allocating their portfolios, it is possible that the combination of short-term worries about the direction of stock prices and the uncertainty of the 2013 tax outlook prompted some AAII members to increase their cash levels. Low bond yields and interest rates continue to be problematic for investors who depend on portfolio income.

November’s special question asked retired AAII members how they are funding their retirement withdrawals. Many respondents said they use a combination of dividend income, bond interest and capital gains. Slightly more than a third of all respondents said they use dividend income to fund their withdrawals. Roughly one-quarter said they rely on capital gains and a nearly equal number said they use bond interest.

November Asset Allocation Survey results:

  • Stocks and Stock Funds: 58.6%, down 1.3 percentage points
  • Bonds and Bond Funds: 21.2%, down 0.1 percentage points
  • Cash: 20.2%, up 1.3 percentage points

November Asset Allocation Survey details:

  • Stocks: 28.8%, down 2.5 percentage points
  • Stock Funds: 29.8%, up 1.2 percentage points
  • Bonds: 4.3%, down 0.3 percentage points
  • Bond Funds: 17.0%, up 0.2 percentage points

Historical Averages:

  • Stocks/Stock Funds: 60%
  • Bonds/Bond Funds: 16%
  • Cash: 24%

The AAII Asset Allocation Survey has been conducted monthly since November 1987 and asks AAII members what percentage of their portfolios are allocated to stocks, stock funds, bonds, bond funds and cash. The survey and its results are available online at: http://www.aaii.com/investor-surveys.



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