AAII WEEKLY FEATURES 12/23/2014

Posted on December 23, 2014 | Weekly Features

Investor-Update

This week’s AAII Weekly Features has been updated.
View this week’s Top AAII Articles, Featured Stock Screen and Member Question.

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How Much Is Needed to Start Investing?

Posted on December 22, 2014 | AAII Journal

What is the minimum dollar amount needed to start investing? It is a question some members ask us and likely one that many others have, especially those who are new to investing.

Technically, you are only limited by the minimum amount required by a brokerage firm or mutual fund company to open an account. ShareBuilder, an online broker, has no required minimum account balance. More than 50 mutual funds included in our annual mutual fund guide have minimum purchase requirements of $100 or less, including funds offered by Fidelity, AssetMark, USAA and Oakmark.

Pragmatically, you should weigh the dollar amount you have available to invest against the actual costs of creating a diversified portfolio. Brokerage commissions for buying and selling stocks and exchange-traded funds (ETFs) increase significantly on a percentage basis as the dollar amount invested decreases. Mutual funds, conversely, charge a flat percentage fee. Commission-free ETFs, which are offered by some brokerage firms (including Charles Schwab, Fidelity and TD Ameritrade) are even more advantageous from a cost standpoint.

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It’s a Yellen Miracle

Posted on December 19, 2014 | Stock Superstars Report

The week opened on a weak note as the market was dragged down by continued weakness in oil prices, down 2.2% by the close on Tuesday as the Grinch prepared to steal our Christmas rally. However, Janet Yellen delivered her own Christmas present by letting out her inner politician and promising everything under the sun. Traders, who had gotten bruised when the Grinch spirited away our rally, rejoiced at its return under the guise of a Fed statement.

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Muddled Monetary Policy Averts a Pullback in Stock Prices

Posted on December 19, 2014 | Dividend Investing

Speaking of the holidays, perhaps we should write about the possibility of Mr. Market being placed on Santa’s “nice” list more often, as we did last week. After being right on the cusp of the second pullback in three months, the S&P 500 index bounced back strongly in reaction to the Federal Open Market Committee’s (FOMC) meeting statement and Fed chair Janet Yellen’s subsequent press conference. The S&P 500 had been down 4.9% from its December 5, 2014, close of 2,075 on Tuesday evening before rising on Wednesday. (Pullbacks are defined as a decline of greater than 5%.)

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Investors Largely Comfortable With Current Valuations

Posted on December 18, 2014 | AAII Survey

This week’s Sentiment Survey special question asked AAII members how comfortable they are with the current valuations of the stocks they hold in their portfolios. Slightly less than one-third (31%) said they are comfortable with current valuations. A few clarified their responses by saying they are comfortable exclusive of oil stocks. Nearly 14% described themselves as being very comfortable. At the other end of the spectrum, 17% said they are not comfortable and an additional 7% said they are somewhat uncomfortable.

Here is a sampling of the responses:

  • “Not counting the energy sector, I am very comfortable.”
  • “Just fine; the dividend flow is more important than the daily price of the stocks.”
  • “Great. I am buying stocks on the dips.”
  • “Most of the stocks I hold are fairly valued. None are overvalued, but by my estimates, only one is undervalued.”
  • “They’re high, except for oil, so I’m worried.”

 



Neutral Sentiment Rises to Highest Level Since September

Posted on December 18, 2014 | AAII Survey

Expectations among individual investors for a flat market rose to its highest level since September in the latest AAII Sentiment Survey. Pessimism also rose, reaching a nine-week high, while optimism fell below its historical average.

Bullish sentiment, expectations that stock prices will rise over the next six months, fell by 6.3 percentage points to 38.7%. Optimism was last lower on October 2, 2014 (35.4%). The drop ends a streak of 10 consecutive weeks with bullish sentiment above its historical average of 39.0%. This had been the longest such streak in nearly three years.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, rose 1.7 percentage points to 34.4%. Neutral sentiment was last higher on September 18, 2014 (34.8%). This is the third consecutive week with neutral sentiment above its historical average of 30.5%.

Bearish sentiment, expectations that stock prices will fall over the next six months, jumped by 4.5 percentage points to 26.9%. This is the highest level of pessimism since October 16, 2014 (33.7%). The increase was not large enough to keep bearish sentiment below its historical average of 30.5% for the ninth consecutive week and the 42nd week this year, however.

Neutral sentiment has risen by a cumulative 7.3 percentage points over the past three weeks. At the same time, bullish sentiment has declined by a cumulative 13.5 percentage points. The shift in expectations occurred as the S&P 500 underwent what was essentially a pullback. The large-cap index fell 4.9% between December 5 and December 16, 2014.

Keeping individual investors optimistic is falling energy prices, the overall upward momentum in stock prices, earnings growth, the Federal Reserve’s ending of its bond purchasing program and sustained economic expansion. Keeping other AAII members cautious are geopolitical events, weakness in energy stocks, a sense that prevailing valuations for other stocks are too high, the pace of economic growth and worries that a larger drop in stock prices is forthcoming.

This week’s AAII Sentiment Survey results:

  • Bullish: 38.7%, down 6.3 percentage points
  • Neutral: 34.4%, up 1.7 percentage points
  • Bearish: 26.9%, up 4.5 percentage points

Historical averages:

  • 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 12/17/2014

Posted on December 17, 2014 | Podcast

AAII Journal Editor Charles Rotblut explains to Chuck Jaffe of MarketWatch why Colgate-Palmolive Company (CL) 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 12/16/2014

Posted on December 16, 2014 | Podcast

AAII Journal Editor Charles Rotblut explains to Chuck Jaffe of MarketWatch why GulfMark Offshore (GLF) 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 12/16/2014

Posted on December 16, 2014 | Weekly Features

Investor-Update

This week’s AAII Weekly Features has been updated.
View this week’s Top AAII Articles, Featured Stock Screen and Member Question.

Read more »



THE December 2014 PASSING COMPANY LISTS AND PERFORMANCE DATA IS NOW AVAILABLE ON-LINE

Posted on December 15, 2014 | Stock Screens

YTD Return of Top Performers: Rule #1 Investing 50.3% — O’Neil’s CAN SLIM 46.4%

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