There is rarely a week that goes by without a new fund being launched. There is also rarely a day when someone does not recommend a stock or a bond. It’s enough to make an investor’s head spin. It certainly complicates the process of choosing a good investment and sticking to a long-term investment strategy.
The problem is not limited to just the broad array of investment recommendations. Even if all you want to do is buy an index fund designed to track the performance and volatility of the S&P 500, you will have to choose from at least 14 mutual funds and exchange-traded funds. (I’ll have more to say about S&P 500 index funds in next month’s AAII Journal.)
While people like having choices, too many options makes settling on one specific choice difficult. There is a technical term to describe this problem: the excessive choice effect (ECE). The ECE refers to the inverse relationship between the number of options and the ability of a person to make a choice. It is most famously related to a study involving jam. Authors Sheena Iyengar and Mark Lepper found that consumers more likely to purchase jam when presented with six choices than when they were presented with 24 choices. Continue Reading »
Let AAII Guide You to Top Mutual Fund Selections
This month’s AAII Journal features our famed Guide to the Top Mutual Funds. The guide provides in-depth analysis of approximately 1,600 promising no-load and low-load funds. Plus, you’ll learn how to select the best funds for your own portfolio. If you Join AAII Today for only $29, you will get this widely acclaimed guide for free. Barron’s calls it “one of the best [guides] around on the subject.”
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More on AAII.com
- Setting Up and Managing Your 401(k) – Retirement plan options are often given without any guidance about how to pick a fund; here are tips for making the right decisions for your 401(k) plan.
- Defining Your Investment Philosophy – Knowing how you want to invest can make choosing investments easier.
Highlights from this month’s AAII Journal
- The Individual Investor’s Guide to the Top Mutual Funds – Our 2017 guide gives you the data you need—in a useful format—to choose the right funds for your portfolio.
- Implementing an Age-Banded Approach to Retirement Withdrawals – Adjusting projected spending by category (e.g., leisure, health care, etc.) as you age can be an effective alternative to the more stringent 4% rule.
AAII Sentiment Survey
The bull-bear spread reached its tightest range since August 2016. More about this week’s results.
This week’s results:
- Bullish: 33.1%, down 2.7 points
- Neutral: 34.5%, down 2.0 points
- Bearish: 32.4%, up 4.7 points
- Bullish: 38.5%
- Neutral: 31.0%
- Bearish: 30.5%
Take the Sentiment Survey.
The Week Ahead
The U.S. financial markets are closed on Monday in observance of President’s Day. On behalf of everyone at AAII, enjoy the extended weekend.
The week’s first economic reports will be the February purchasing managers’ manufacturing index (PMI) flash, which will be released on Tuesday. Wednesday will feature January existing home sales and the minutes from the January/February Federal Open Market Committee meeting. January new home sales and the University of Michigan’s final February consumer sentiment survey will be released on Friday.
Philadelphia Federal Reserve Bank president Patrick Harker will speak on Tuesday, and Atlanta president Dennis Lockhart will make a public appearance on Thursday.
The Treasury Department will auction $26 billion of two-year notes on Tuesday, $13 billion of two-year floating rate notes and $34 billion of five-year notes on Wednesday and $28 billion of seven-year notes on Thursday.
Local Chapter Meetings
AAII Local Chapter Meetings offer you a variety of presentations from expert speakers who will give you their view on the world of investing. A bonus of attending a Chapter Meeting near you is the opportunity to meet other AAII members who share your interest and enthusiasm for investing. You can even share the Chapter experience with your family and friends by inviting them to attend Chapter Meetings with you! Upcoming Meetings »