The Stretch of Low Optimism Continues

 

  Last month, optimism and pessimism in our weekly Sentiment Survey reached unusual levels. Bullish sentiment plunged to 20.9% on December 12, 2018, while bearish sentiment jumped to a multi-year high of 50.3% by the end of December. Of the two, unusually low readings for optimism have a stronger record of being a contrarian indicator….

AAII Sentiment Survey: Pessimism Pulls Back, But Stays High

 

 Pessimism among individual investors about the short-term direction of the stock market is above 40% for the fourth consecutive week and the fifth time in seven weeks. The latest AAII Sentiment Survey also shows rebounds in optimism and neutral sentiment. Bullish sentiment, expectations that stock prices will rise over the next six months, rose 1.5…

The January 2019 AAII Journal is Now Available Online.

 

 COVER ARTICLE The Position of the Individual Investor By James B. Cloonan Looking back on the occasion of the AAII Journal’s 40th anniversary: This article originally appeared in the second issue of the AAII Journal, March–April 1979, and set the stage for AAII’s mission.   IN THIS ISSUE Steps You Can Take to Reduce the…

One out of Four Investors Say They Increased Their Cash Allocations Compared to Start of 2018

 

 Last month’s Asset Allocation Survey special question asked AAII members how their current allocation compared to what they expected it would be when 2018 started. Just under 37% describe their allocations as being more conservative than expected, with approximately one out of four respondents say they increased their cash allocations. Conversely, one-third (33%) of respondents…

December AAII Asset Allocation Survey: Cash Nears a 6-Year High

 

 Cash allocations among individual investors rose to nearly a six-year high last month. The December AAII Asset Allocation Survey also showed a further decline in equity exposure. Stock and stock fund allocations fell 2.2 percentage points to 62.4%. Exposure to equities was last lower in February 2016 (61.5%). Even with the decline, equity allocations remained…

Understanding Bond Pricing and Yield

 

 This week’s AAII Weekly Digest highlights these “must-read” AAII articles: Dividends Impact Consumption More Than Capital Gains Do Changes in dividends impact household consumption. Capital gains also have an impact, but a smaller one than dividends. The magnitude of the impact depends on household wealth, with consumption rising proportionately higher among comparatively less affluent households….

Dividend Safety Signs and Warning Flags

 

  Many investors seek shelter from the stock market storm in more mature dividend-paying companies since the income from these firms provides at least some positive return in an otherwise bleak environment. But an economic downturn can test even the most mature and stable firms, with some forced to cut dividend payments. Others manage to…

21 Investing Resolutions for 2019

 

 Special notes: Our offices will be closed on both Monday, December 31, and Tuesday, January 1. The U.S. bond market will close early (2:00 p.m. Eastern Time) on Monday but the stock exchanges will operate on normal hours. All U.S. financial markets will be closed on Tuesday. On behalf of everyone at AAII, have a…

Two out of Five Investors Think Rising Interest Rates Should Halt

 

 This week’s Sentiment Survey special question asked AAII members whether the Federal Reserve should continue to raise interest rates. Respondents were split. Slightly more than two out of five respondents (42%) think the pause button should be hit. Many of these respondents think the Fed should wait to see additional data, that growth is slowing…