BUY OF THE WEEK 11/18/2014
Posted on November 18, 2014 | Podcast
AAII Journal Editor Charles Rotblut explains to Chuck Jaffe of MarketWatch why Stamps.com Inc. (STMP) 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
THE November 2014 PASSING COMPANY LISTS AND PERFORMANCE DATA IS NOW AVAILABLE ON-LINE
Posted on November 14, 2014 | Stock Screens
YTD Return of Top Performers: O’Neil’s CAN SLIM 56.0% — Rule #1 Investing 50.3%
November 2014 AAII MODEL PORTFOLIOS UPDATED: Small Caps Lead the Way
Posted on November 14, 2014 | Model Portfolios
The S&P 500 index climbed 2.3% in October, although it was far from a smooth ride. There was a sell-off in the early-to-mid part of the month, but the markets rebounded strongly from those lows. This could indicate strong buyer interest sitting on the sidelines waiting for an opportunity to buy in, which would be bullish, but the signs are far from clear. Instability across the globe continues to be an issue. We have seen defaults that are not defaults in Argentina and a shortage of, well, everything in Venezuela. Despite all this uncertainty, or perhaps because of it, the oil glut pushed prices down even more, and $3 per gallon gas was a welcome surprise for many Americans. While all stock styles performed well last month, small caps outpaced large-cap stocks. Whether this signifies a return of the small caps is unclear. The Model Fund Portfolio climbed 3.0%, while the Model Shadow Stock Portfolio, which is heavily concentrated in small-cap stocks, rose 3.2% during October.
The Model Shadow Stock Portfolio’s 3.2% gain for the month trailed its comparison benchmarks: The Vanguard Small Cap Index (NAESX) was up 4.5%, and the DFA US Micro Cap Index fund (DFSCX) was up 6.5%. Year-to-date, the Model Shadow Stock Portfolio has declined 7.4%, also trailing the Vanguard Small Cap Index fund (up 5.0%) and the DFA US Micro Cap Index fund (up 0.3%). The Model Shadow Stock Portfolio has a compound annual return of 17.1% 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 3.0% gain in October compares to a gain of 2.7% for the Vanguard Total Stock Market Index fund. Year-to-date, the Model Fund Portfolio is up 8.3%, while the Vanguard Total Stock Market Index fund is up 9.8%. The Model Fund Portfolio has a compound annual return of 9.4% since inception in June of 2003, matching the performance of the Vanguard Total Stock Market Index fund over the same time period.
Online Resources for Getting the Most from SI Pro
Posted on November 13, 2014 | Stock Investor Pro
Stock Investor Pro is AAII’s powerful fundamental screening system providing rich company and industry data. You can screen for stocks based on their financial qualities using 60 predefined strategies or by creating your own screens. The Windows-based program offers fundamental data supplied by Thomson Reuters and earnings estimates supplied by I/B/E/S. For individual investors, it offers the power of a fundamental stock screening tool at their fingertips for a reasonable price, whereas other similar tools cost a thousand dollars or more.
AAII WEEKLY FEATURES 11/11/2014
Posted on November 13, 2014 | Weekly Features
This week’s AAII Weekly Features has been updated.
View this week’s Top AAII Articles, Featured Stock Screen and Member Question.
Global Events Having Mixed Effects on Investor Outlook
Posted on November 13, 2014 | AAII Survey
This week’s Sentiment Survey special question asked AAII members what, if any, global events are influencing their six-month outlook for stocks. Responses varied, with several members listing more than one event. Russia’s intervention with Ukraine was cited by 17% of respondents. About 14% of respondents said events in the Middle East, particularly those involving the Islamic State group, were influencing their outlook. An equal number say both global and U.S. monetary policy, including stimulus programs in Japan and in Europe, are impacting their outlook. The midterm elections and the forthcoming change in Senate leadership was listed by 12% of respondents. About 11% mentioned the U.S. economy, either in terms of its recovery or its relative strength compared to the rest of the world. A similar percentage said they were encouraged by the drop in oil prices, though some said they would be concerned if prices fell too low. Just 6% of respondents discussed Ebola, with some seeing progress in containing it and others expressing concern about the outbreak spreading.
AAII Sentiment Survey: Optimism Keeps Rising, Hits 4-Year High
Posted on November 13, 2014 | AAII Survey
Optimism about the short-term direction of the stock market spiked to a four-year high in the latest AAII Sentiment Survey. Pessimism rebounded off of last week’s nine-year low, while neutral sentiment plunged.
Bullish sentiment, expectations that stock prices will rise over the next six months, jumped 5.2 percentage points to 57.9%. This is the largest amount of optimism registered by our survey since December 23, 2010 (63.3%). It is also the sixth consecutive week and the 13th out of the past 14 weeks with bullish sentiment above its historical average of 39.0%.
Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, plunged 9.5 percentage points to 22.8%. Neutral sentiment was last lower on March 14, 2013 (22.6%). The historical average is 30.5%.
Bearish sentiment, expectations that stock prices will fall over the next six months, rebounded by 4.3 percentage points to 19.3%. This is the fourth consecutive week and the 37th week this year with pessimism below its historical average of 30.5%.
Optimism has only been higher on 57 occasions during the nearly 28-year history of our survey. The six-month return for the S&P 500 following those readings was an average of 0.0% and a median of 0.5%. This is not surprising given that unusually high levels of bullish sentiment and unusually low levels of bearish sentiment (pessimism more than one standard deviation below its historical average for the second consecutive week) have tended to be followed by below-average six- and 12-month gains, as I explained in the June 2014 AAII Journal.
Individual investors continue to react positively to the market’s rebound from its mid-October lows. Also contributing to the level of optimism are earnings growth, the Federal Reserve’s ending of its bond purchasing program, falling energy prices and sustained economic expansion. Some AAII members may also be reacting to the outcome of the midterm elections. Keeping other AAII members cautious are geopolitical events, a sense that prevailing valuations are too high, the pace of economic growth and worries that a larger drop in stock prices is forthcoming. It is unclear what, if any, impact the midterm elections had on investor sentiment.
This week’s AAII Sentiment Survey results:
- Bullish: 57.9%, up 5.2 percentage points
- Neutral: 22.8%, down 9.5 percentage points
- Bearish: 19.3%, up 4.3 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.
Sell OF THE WEEK 11/12/2014
Posted on November 12, 2014 | Podcast
AAII Journal Editor Charles Rotblut explains to Chuck Jaffe of MarketWatch why Tenneco Inc. (TEN) 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 11/11/2014
Posted on November 11, 2014 | Podcast
AAII Journal Editor Charles Rotblut explains to Chuck Jaffe of MarketWatch why Cablevision Corp. (CVC) 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
New Portfolio Changes and the November Monthly Report
Posted on November 7, 2014 | Dividend Investing
More details about the Dividend Investing portfolio changes, including our rationale for the moves, are given in the November monthly report, which is now on the Dividend Investing website.