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Dividend yields, price-earnings ratios and cyclically adjusted price-earnings ratios have long been used to forecast long-term stock returns, which may lead some investors to believe that these multiples can also be valuable tools for asset allocation. A dividend yield (D/P) is...

Last month’s Asset Allocation Survey special question asked AAII members if they are overweighting or underweighting stocks. Nearly 43% of respondents said they overweighting stocks. Many of these respondents cited the long-term performance of stocks, while others said they are...

Individual investors’ fixed-income allocations fell to a two-year low last month, according to the May AAII Asset Allocation Survey. Both equity and cash allocations rose. Stock and stock fund allocations rebounded by 2.1 percentage points to 67.4%. The rise puts equity allocations...

There is a constant stream of new academic research about investing. Some of the papers attempt to explain the key drivers of returns. Some are more focused on investor behavior. Many papers are focused on realizing higher returns (“delivering alpha”). For an investor seeking...

Last month’s Asset Allocation Survey special question asked AAII members to describe the impact that the Federal Reserve’s rate hikes are having on their asset allocation decisions. Half of all respondents (50%) said that the rate hikes have had no impact on their allocation...

Fixed-income investments account for the largest percentage of individual investors’ portfolios since last summer, according to the April AAII Asset Allocation Survey. Also, last month equity allocations pulled back from their recent high, while cash balances rebounded. Stock...

This week’s AAII Weekly Digest highlights these “must-read” AAII articles:   Model Shadow Stock Portfolio: Handling Major Financial Statement Revisions Major revisions to financial statements have been rare among Shadow Stocks; their mere occurrence is not...

A year ago, I began including doodles with my weekly commentary. The first one was a sketch discussing the impact of changes in earnings forecasts on stock prices. The purpose was to visually highlight and graphically explain one of the points I was making. Being a writer who...

A prelude to this week’s commentary: BlackRock made financial news headlines by announcing a change in how some of its active mutual funds will be managed. Rather than rely on human stock picking, the company is shifting to a heavy reliance on quantitative strategies. Commentary...

Feature Article: Portfolio Strategies » Factors Allow Investors to Think Differently About Diversification Tilting a portfolio to a small number of factors, including value and size, can increase returns while at the same time reducing risk. In This Issue: Portfolio Strategies...