Updating Stock Investor Pro
Posted on January 16, 2015 | Stock Investor Pro
AAII offers weekly data updates to subscribers of Stock Investor Pro. These files are typically available by Sunday morning (Central Time). This issue of Stock Investor News walks you through the process of updating your SI Pro, as well as how to make use of automatic updates. There are two methods of updating the program: using the monthly CD or using the Program/Data Install option available at AAII.com.
To update Stock Investor Pro from AAII.com, first go to the Stock Investor Pro downloads page located at: www.aaii.com/stock-investor-pro/downloads. You may be prompted to log in using either your 10-digit AAII member number, with no spaces, or your personalized username and password. If you do not remember your member number, it can be found on your Stock Investor Pro or AAII Journal mailing label. If you have saved your Login Name and Password in the past, you will not be prompted to enter this information and will be taken directly to the Stock Investor Pro Downloads area.
From the downloads area, click on the Program/Data Install button to download the weekly data update file. The full installation file is named stockinvestorinstall.exe. You may Run or Save the file, but it is highly recommended that you save the file first, preferably to your desktop. Keep in mind that the Program/Data Install file is approximately 60MB in size and is intended for download by those using high-speed Internet connections such as cable modem, DSL, T1, or T3.
Investors’ Shifts in Investing Strategies
Posted on January 15, 2015 | AAII Survey
This week’s Sentiment Survey special question asked AAII members how, if at all, they have recently adjusted their stock investing strategy. Three out of 10 respondents (30%) said they have not made any changes. More than 18% say they are targeting large-cap stocks, dividend paying stocks or stocks perceived as being more stable. An additional 11% said they are placing a bigger focus on valuation, with some of these individual investors seeking a combination of low valuations and dividend payments. Roughly 9% have increased their cash position.
Here is a sampling of the responses:
- “I have not changed my focus. There is no point in trying to predict short-term moves in the market.”
- “I am adding defensive stocks to my portfolio and reducing my exposure to those stocks that are highly volatile.”
- “I’m selling winners to protect capital.”
- “I will be looking for discounted value stocks.”
- “Staying the course. I’m not smart enough to guess what the near-term impact of events on stock prices will be.”
AAII Sentiment Survey: Individual Investors Remain Optimistic
Posted on January 15, 2015 | AAII Survey
Individual investors continue to be optimistic about the short-term direction of stock prices, according to the latest AAII Sentiment Survey. Bullish sentiment rose, while bearish sentiment fell.
Bullish sentiment, expectations that stock prices will rise over the next six months, rebounded by 5.1 percentage points to 46.1%. The rise keeps optimism above its historical average of 39.0% for the 21st time in 23 weeks.
Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, rose 1.1 percentage points to 32.4%. The increase keeps neutral sentiment above its historical average of 30.5% for a second consecutive week.
Bearish sentiment, expectations that stock prices will fall over the next six months, dropped by 6.2 percentage points to 21.5%. This is the 13th consecutive week that pessimism is below its historical average of 30.5%. At current levels, bearish sentiment is near the bottom of its typical range.
Individual investors remain optimistic about the short-term direction of stock prices even with the modest decline the S&P 500 has experienced so far this month. This said, bullish sentiment remains below the unusually high levels registered two weeks ago.
Keeping AAII members encouraged is the overall upward momentum of stock prices, falling energy prices, earnings growth and sustained economic expansion. Causing other members to be cautious or pessimistic are geopolitical events, the impact of falling oil prices on energy stocks, a sense that prevailing valuations for other stocks are too high, the pace of economic growth and worries that an even larger decline in stock prices could occur.
This week’s AAII Sentiment Survey results:
- Bullish: 46.1%; up 5.1 percentage points
- Neutral: 32.4%; up 1.1 percentage points
- Bearish: 21.5%; down 6.2 percentage points
- 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.
The January 2015 passing company lists and performance data is now available on-line.
Posted on January 15, 2015 | Stock Screens
YTD Return of Top Performers: Rule #1 Investing 50.3% — O’Neil’s CAN SLIM 44.1%
January 2015 AAII MODEL PORTFOLIOS UPDATED: Small Is the New Black
Posted on January 15, 2015 | Model Portfolios
The S&P 500 index lost 0.4% in December, as large caps ended an up-and-down month on a negative note. Apparently large-cap stocks were on Santa’s naughty list last month, as small-cap stocks seemed to be favored instead. The S&P SmallCap 600 index gained 2.9% in December. Last month two new stocks were added to the Model Shadow Stock Portfolio—Global Power Equipment Group (GLPW) and L.S. Starrett Co. (SCX), which James Cloonan discusses in the January AAII Journal.
The Model Fund Portfolio saw a very modest gain in December, rising 0.2%, while the Model Shadow Stock Portfolio, which specifically invests in small-company stocks, rose 4.3% last month.
The Model Shadow Stock Portfolio’s 4.3% increase for the month beat its comparison benchmarks: The Vanguard Small Cap Index (NAESX) gained 1.3%, and the DFA US Micro Cap Index fund (DFSCX) rose 3.4%. Last year, the Model Shadow Stock Portfolio declined 5.8%, trailing the Vanguard Small Cap Index fund (up 7.4%) and the DFA US Micro Cap Index fund (up 2.9%). The Model Shadow Stock Portfolio has a compound annual return of 16.9% since its inception in 1993, while the Vanguard Total Stock Market Index fund (VTSMX) has gained 9.4% annually over the same period.
The Model Fund Portfolio’s 0.2% gain in December compares to virtually no change for the Vanguard Total Stock Market Index fund. Last year, the Model Fund Portfolio gained 9.9%, while the Vanguard Total Stock Market Index fund rose 12.4%. The Model Fund Portfolio has a compound annual return of 9.4% since inception in June of 2003, slightly underperforming the Vanguard Total Stock Market Index fund over the same time period, which returned 9.5%.
A Comprehensive Approach to Covered Call Writing
Posted on January 14, 2015 | AAII Journal
Setting up a covered call portfolio using securities that generated significant dividend distributions was covered by Ben Branch, professor of finance at the University of Massachusetts, Amherst, in two wonderful articles published in the AAII Journal last year.
The articles ran under the titles “Assembling a Covered Call Portfolio on Dividend-Paying Stocks” (June 2014), and “Managing a Portfolio of Covered Calls” (July 2014) and can be found in the AAII.com archives. This article adds information to the key facts highlighted in Branch’s articles and presents another perspective as to how and why such a covered call portfolio can be constructed and managed.
Covered call writing is a strategy where individual investors can sell options against securities—stocks or exchange-traded funds (ETFs)—they already own to generate monthly cash flow. In its traditional sense, profits can be gleaned both from the sale of the option and from share appreciation if the option selected has a higher value than the current market value of the stock. (For example, an investor buys a stock for $48 and sell the $50 call option; this known as an “out-of-the-money” strike.) If the option selected had a strike price (agreed exercise price) the same as (“at the money”) or less than the current market value (“in the money”), the maximum return would be the time value component of the option premium only.
Sell OF THE WEEK 1/14/2015
Posted on January 14, 2015 | Podcast
AAII Journal Editor Charles Rotblut explains to Chuck Jaffe of MarketWatch why Travelers (TRV) 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
BUY OF THE WEEK 1/13/2015
Posted on January 13, 2015 | Podcast
AAII Journal Editor Charles Rotblut explains to Chuck Jaffe of MarketWatch why Continental Corporation (CTTAY) 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
Getting More Energy, Plus the January Monthly Report
Posted on January 9, 2015 | Dividend Investing
The calendar may have flipped over to a new year, but one of the major stories in the financial arena remains unchanged: oil. Crude prices continue to slide, breaking below $50 per barrel. Reuters reported that prices on both West Texas Intermediate and Brent Sea oil fell today to levels not seen since 2009.
The Hangover Hurts but Earnings Helped, Plus Changes to the Portfolio
Posted on January 9, 2015 | Stock Superstars Report
The January SSR Monthly Report is now available at the SSR website. There is one new portfolio deletion and one new portfolio addition to announce.