Upcoming Chapter Meeting: AAII St. Louis

Posted on December 31, 2013 | Local Chapters


Upcoming Chapter Meeting: AAII St. Louis

Date: Tuesday, January 7, 2014
Topic: Retirement Investment Planning
Speaker: Nick Simokaitis, Regional Planning Consultant, Fidelity Investments

Nick Simokaitis will present a knowledgeable, informed discussion on topics related to retirement income planning and investment strategy. The topics he will address in this presentation include Social Security-related decisions, IRA and Roth IRA issues, multi-generational considerations and more.

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BUY OF THE WEEK 12/31/2013

Posted on December 31, 2013 | Podcast

AAII Journal Editor Charles Rotblut Editor explains to Chuck Jaffe of MarketWatch why Golden Star Resources Ltd. (GSS) 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



AAII WEEKLY FEATURES 12/31/2013

Posted on December 31, 2013 | 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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Upcoming Chapter Meeting: AAII San Diego

Posted on December 28, 2013 | Local Chapters


Date: Saturday, January 4, 2014
Topic: Best Internet Investment Sites 2014
Speaker: Don Gimpel, Chairman, AAII Los Angeles Chapter Strategic Investing Group

Don Gimpel will demonstrate how to use the Internet as a fantastic investing resource. Highlights include following gurus and ranking their performance, the best explanations of econometric indicators, quarterly projections for the next 18 months and a less-than-rosy website with forecasts by U.S. government experts for the next 25 years. In addition, Gimpel will run through sites that identify whether the stock market and its 70 economic sectors are overvalued or undervalued, the best momentum strategy he has ever seen and the surprising best source of data for fundamental investors (think Siri).

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Why Bond Prices Go Up and Down

Posted on December 28, 2013 | Classroom

Bond prices go up and down in response to two factors: changes in interest rates and changes in credit quality. Individual investors who purchase bonds tend to worry a lot about the safety of their money. Generally, however, they tie safety to credit considerations. Many individual investors do not fully understand how changes in interest rates affect price. Since the late 1970s, changes in the interest rate environment have become the greatest single determinant of bond return. Managing interest rate risk has become the most critical variable in the management of bond portfolios. In this article, we’ll see why.

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Breaking a Tie Between Funds

Posted on December 27, 2013 | Classroom

Making tax avoidance your investment focus is a formula for investment disaster. But keeping your eye on aftertax returns is simply wise investing. For example, two funds have similar compound average annual five-year before-tax returns. A five-year period is probably long enough to get a picture of how the funds have performed in different market environments, but still recent enough to be relevant.

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The Role of REITs for Long-Term Investors

Posted on December 26, 2013 | AAII Journal

Real estate investment trusts (REITs) offer diversification benefits relative to stocks, with correlations decreasing over time.

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Sell OF THE WEEK 12/26/2013

Posted on December 26, 2013 | Podcast

AAII Journal Editor Charles Rotblut Editor explains to Chuck Jaffe of MarketWatch why H&R Block (HRB) is his “Sell 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: Sell of the week



AAII Sentiment Survey: Optimism Is Near A Three-Year High

Posted on December 26, 2013 | AAII Survey

Optimism among individual investors is near a three-year high according to the latest AAII Sentiment Survey. Pessimism, meanwhile, is near a two-year low.

Bullish sentiment, expectations that stock prices will rise over the next six months, jumped 7.6 percentage points to 55.1%. This is the highest level of optimism recorded by our survey since January 6, 2011. It is also the 10th time in the past 12 weeks and the 12th in the last 16 weeks that bullish sentiment is above 40%. The historical average is 39.0%.

Neutral sentiment, expectations that stock prices will stay essentially unchanged, declined 1.1 percentage points to 26.4%. The drop puts neutral sentiment at a four-week low. This is the also the fourth time in the past five 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, plunged 6.5 percentage points to 18.5%. This is the 11th consecutive week and the 13th out of the past 15 weeks with a bearish sentiment reading below the historical average of 30.5%.

This week’s results puts bullish sentiment at an unusually high level and bearish sentiment at an unusually low level (more than one standard deviation above and below the respective historical averages). Though this could be interpreted as a warning sign that individual investors’ short-term expectations are too optimistic, the data is inconclusive. When bullish sentiment has previously been at unusually high levels (between 49.3% and 59.7%), the S&P 500 has risen by a median of 2.9%. When bearish sentiment has previously been at unusually low levels (between 10.6% and 20.5%), the S&P 500 has risen by 4.5%. In comparison, the S&P 500 has realized a median 4.7% gain for all six-month periods since the AAII Sentiment Survey was started in 1987. (See Is the AAII Sentiment Survey a Contrarian Indicator for more information.)

Many individual investors continue to be encouraged by the new record highs established by the large-cap indexes along with earnings growth and economic growth. The two-year budget agreement has also alleviated worries about another partial government shutdown occurring next year. Keeping optimism from being even higher are concerns about the pace of economic growth, elevated stock valuations and the lack of a long-term fiscal solution.

This week’s special question asked AAII members whether they agreed or disagreed with the Federal Reserve’s decision to taper its bond purchases. Respondents overwhelmingly said they agree with the decision. Several members added that the Fed should have started reducing its monetary stimulus sooner or that a more aggressive move should have been announced. Some members said they thought the taper is good in that it starts to remove the unusually high level of monetary stimulus from the market, while others clarified that they are in agreement with the Fed’s move as long as the tapering is gradual. A few respondents dissented, saying a larger removal of stimulus was warranted or that quantitative easing should have never been started in the first place.

Here is a sampling of responses:

  • “Agree. It is time for the Fed to let the market heal itself.”
  • “I agree. As long as the taper is gradual, it will be good for the economy and the markets.”
  • “Yes, I agree, but the Fed should have increased the taper by a larger amount.”
  • “Agree. It’s long overdue.”
  • “The Fed should have never done it in the first place.”

This week’s AAII Sentiment Survey results:

  • Bullish: 55.1%, up 7.6 percentage points
  • Neutral: 26.4%, down 1.1 percentage points
  • Bearish: 18.5%, down 6.5 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



BUY OF THE WEEK 12/24/2013

Posted on December 24, 2013 | Podcast

AAII Journal Editor Charles Rotblut Editor explains to Chuck Jaffe of MarketWatch why Skyworks Solutions (SWKS) 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



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