Investors Are Yellen’ About the Fed Minutes
Posted on March 20, 2015 | Dividend Investing
This time last year, U.S. Federal Reserve chair Janet Yellen asserted that the central bank would no longer use unemployment as a target to determine interest rates. For well over a year, there has been speculation as to when the first rate hike would occur.
The Fed Giveth
Posted on March 20, 2015 | Stock Superstars Report
This week was dominated by the actions and words of the Federal Reserve Open Market Committee. The committee removed the word “patient” in describing how it would raise interest rates going forward. Essentially, while interest rates may be increased, the change will be a symbolic step opening the door to future interest rate hikes.
P/E Ratio Commonly Relied On to Gauge Valuation
Posted on March 19, 2015 | AAII Survey
This week’s Sentiment Survey special question asked AAII members what indicators they use to determine whether the stock market’s valuation is reasonable, too high or too low. More than half (55%) of respondents said they rely on the price-earnings (P/E) ratio. Many of these members said they specifically look at Robert Shiller’s cyclically adjusted price-earnings (CAPE) ratio. Various technical analysis measures are used by about 15% of respondents. A nearly equal number said they look at other indicators, such as economic data, interest rates and monetary policy. Some members said that they consider more than one indicator when assessing the market’s valuation.
AAII Sentiment Survey: Optimism Falls to a Two-Year Low
Posted on March 19, 2015 | AAII Survey
Optimism fell to a two-year low according to the latest AAII Sentiment Survey, a sign that individual investors have become more cautious about the short-term outlook for stocks. Pessimism rose to a five-week high, while neutral sentiment remained above 40% for a second consecutive week.
Bullish sentiment, expectations that stock prices will rise over the next six months, fell 4.4 percentage points to 27.2%. This week’s reading is tied with April 17, 2014, for the lowest level of optimism since April 2013. The drop puts bullish sentiment below its historical average of 39.0% on consecutive weeks for the first time since June 19 through August 7, 2014.
Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, declined by 1.6 percentage points to 41.4%. Neutral sentiment remains above its historical average of 30.5% for the 11th consecutive week. This is the longest such streak since a 32-week stretch of above-average readings between January 9 and August 14, 2014.
Bearish sentiment, expectations that stock prices will fall over the next six months, jumped 6.1 percentage points to 31.5%. This is a six-week high. It is also the first time pessimism is above its historical average of 30.5% since February 5, 2015.
Bullish sentiment is in the midst of a five-week, 19.8-percentage-point plunge. The drop has now put optimism at an unusually low level (more than one standard deviation below its historical average). At the same time, bearish sentiment has risen by a cumulative 13.6 percentage points.
Neutral sentiment remains at an unusually high level (more than one standard deviation above its historical average). Historically, both unusually low levels of bullish sentiment and unusually high levels of neutral sentiment have been correlated with better-than-average market performance over the following six- and 12-month periods. (See Analyzing the AAII Sentiment Survey Without Hindsight in the June 2014 AAII Journal for more information.) There is no guarantee history will repeat in the future, however.
The change in sentiment has occurred as the S&P 500 index has experienced an increase in volatility, though the index ended yesterday essentially unchanged from its February 19, 2014, close. In addition to the recent price fluctuations, prevailing valuations, disappointing earnings or guidance from certain companies, geopolitical events, the pace of economic growth and worries that an even larger decline in stock prices could occur are weighing on AAII members’ short-term market outlook. Keeping some AAII members encouraged is the ongoing bull market, sustained economic expansion, earnings growth and still-accommodating monetary policy.
This week’s AAII Sentiment Survey results:
- Bullish: 27.2%, down 4.4 percentage points
- Neutral: 41.4%, down 1.6 percentage points
- Bearish: 31.5%, up 6.1 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.
An Easy Way to Boost Returns: Reduce Your Costs
Posted on March 19, 2015 | Investor Update
Every dollar you do not spend on expenses is a dollar you get to keep and grow. It’s basic math and an easy way to boost your returns. Each dollar spent on expenses flows out of your portfolio, never to be seen again. Limiting the outflow of those dollars gives you a larger amount of capital to grow and/or earn income on.
Sell OF THE WEEK 3/18/2015
Posted on March 18, 2015 | Podcast
AAII Journal Editor Charles Rotblut explains to Chuck Jaffe of MarketWatch why Bob Evans Farms (BOBE) 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 3/17/2015
Posted on March 17, 2015 | Podcast
AAII Journal Editor Charles Rotblut explains to Chuck Jaffe of MarketWatch why Monarch Casino & Resort, Inc. (MCRI) 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
AAII WEEKLY FEATURES 3/17/2015
Posted on March 17, 2015 | Weekly Features
This week’s AAII Weekly Features has been updated.
View this week’s Top AAII Articles, Featured Stock Screen and Member Question.
A Little Help From our Friends
Posted on March 13, 2015 | Stock Superstars Report
Though we select stocks for the SSR portfolio based on their individual traits, we realize that industry trends can influence how a stock trades. We see the influence of industry trends on the stocks that pass our screens, both positive and negative.
THE MARCH 2015 PASSING COMPANY LISTS AND PERFORMANCE DATA IS NOW AVAILABLE ON-LINE.
Posted on March 13, 2015 | Stock Screens
YTD Return of Top Performers: Fisher (Philip) 15.3% — Est Rev: Up 5% Screen 12.3%