The March 2019 AAII Journal is Now Available Online

COVER ARTICLE: To Beat the Market, Invest Differently Than the Market By Charles Rotblut, James O’Shaughnessy Decisions based on less than five years of performance returns are mostly based on noise. Many strategies look good over shorter periods, but fare much worse over longer periods.   IN THIS ISSUE:   Revisiting the “What Works on…

 

Warren Buffett Deemphasizes Book Value as a Key Metric

Warren Buffett made a notable change in his annual Berkshire Hathaway Inc. (BRK.B) shareholder letter: He deemphasized the change in the book value of the company’s shares. To those who are long-time readers of his letters—and I suggest reading Buffett’s letters for the investing insights he shares—the change marks a definitive shift. Starting in 1985,…

 

Avoiding Overconfidence by Knowing What Type of Investor You Are

Among the many unintended consequences of the internet is an unrealistic sense of overconfidence. Researchers are finding people who believe they possess a level of skill or expertise after watching instructional YouTube videos. For example, some people believe that they can impersonate Michael Jackson’s moonwalk dance by merely watching a video about it, according to NPR’s…

 

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 inherent…

 

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. It’s…

 

MoneyLife Radio Sell of the Week: Lindsay Corp. (LNN)

AAII Journal Editor Charles Rotblut explains to Chuck Jaffe why Lindsay Corp. (LNN)  is his “Sell of the Week” for February 5, 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: Sell…

 

The February 2019 AAII Journal is Now Available Online

COVER ARTICLE The Individual Investor’s Guide to the Top Mutual Funds 2019 By AAII Staff Our annual mutual fund guide provides information and performance statistics on 727 funds.   NOTES & OPINIONS Dispatches Current news items of interest to individual investors. Majority of Retirees Regret Not Saving More for Retirement Older Workers Investing More in…

 

How to Invest Differently Than a Mutual Fund

Conventional wisdom holds that buying index (“passive”) mutual funds and exchange-traded funds (ETFs) is an effective way to beat actively managed funds. Index funds tracking broad-based indexes are difficult to beat over extended periods because of their low costs. For many investors, they are a good option but are not the only way to beat…

 

MoneyLife Radio Buy of the Week: O’Reilly Automotive Inc. (ORLY)

AAII Journal Editor Charles Rotblut explains to Chuck Jaffe why O’Reilly Automotive Inc. (ORLY)  is his “Buy of the Week” for January 29, 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:…