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…

 

What to Do When Gains Are Hard to Come By

If you feel like you have struggled this year to realize good or even positive returns, you are not alone. This has been a very tough year for investors. Though yesterday’s comments by Federal Reserve chair Jay Powell helped, returns for most asset classes and categories range from being down to only modestly up year…

 

Keep Calm and Ignore the Market’s Volatility

Lately, friends and acquaintances have been bringing up the stock market’s volatility in conversation. While it’s always possible for me to be an outlier, I suspect in this case that I’m not. The magnitude of the moves is one reason market volatility is a topic of conversation. I suspect many people still view a 200-point…

 

A Dividend Approach to Judging the Value of Stocks

This week’s AAII Weekly Digest highlights these “must-read” AAII articles:   The Effect of Dividend Changes on Expected Cash Flows Dividend announcements and changes are perceived as signaling information about a company’s financial prospects. However, new research points to a link between dividend announcements and future changes in cash flow volatility. A Dividend Approach to…

 

AAII Survey: Recent Market Volatility Has Done Little to Change Investors’ Outlook

The last few weeks have offered an interesting ride for U.S. investors. The Dow Jones industrial average logged its two biggest single-day point drops. The Dow and S&P 500 index entered “correction” territory, both having fallen at least 10% (on an intraday basis) from their most recent highs. Yet, as of Friday’s close, the Dow…

 

Your Portfolio – Maintaining Perspective

This week’s AAII Weekly Digest highlights these “must-read” AAII articles:   Allocating to Manage Risk: A Case Study The downside risk a retired couple’s portfolio faces is examined, along with a strategy to reduce the damage of turbulent market conditions. A Former Hedge Fund Manager’s Contrarian Strategy A former hedge fund manager discusses how the…

 

What Investments Do You Need?

While working on a new presentation about portfolio strategies, it occurred to me that there is an important question I should address: What investments does an individual investor need in their portfolio? Not specific names, but rather what types of investments. It’s a question that is not necessarily easy for many investors to answer. It’s…

 

Don’t Like Volatility? Take a Longer-Term View

“Financial advisers need to show their clients what the distributions of stock returns are over time.” This paraphrased recommendation was given by University of Chicago professor Eugene Fama at a CFA Chicago Society event held last week. The comment was in reference to what happens to returns the longer an investor remains allocated to stocks….

 

Political Risk Has Investors, Market Turning Bearish

A week after writing about the CBOE Volatility Index, or VIX, hitting a 23-year low, U.S. stocks turned in their worst day in 10 months this week as the VIX surged to its highest level in over a month. Most of the apprehension stemmed from Washington, D.C., as the Trump administration weathers storms on multiple…