Actionable Steps for the Current Market

As a follow-up to last week’s commentary about the recent bout of downside volatility and how many stocks are performing worse than the major indexes, I want to discuss strategies this week. Specifically, actionable steps you can take between now and the end of the year. None of these will be purely tactical in nature (e.g., “reduce…

 

Getting the Same Return With Less Risk – The Power of Factors

This week’s AAII Weekly Digest highlights these “must-read” AAII articles:   Model Shadow Stock Portfolio: Why Quarterly Reviews Still Make Sense The Model Shadow Stock Portfolio has been reviewed quarterly to determine stock sales and additions since its inception dating back to 1993. In a world of 24/7 communications and interaction, the notion of waiting…

 

The October 2018 AAII Journal is Now Available Online

COVER ARTICLE Getting the Same Return With Less Risk: The Power of Factors By Larry Swedroe, Charles Rotblut, CFA Using factors to diversify a portfolio can pull in extreme annual returns without lowering long-term expected returns.     Editor’s Note By Charles Rotblut, CFA Two articles this month tackle the issue of how to manage…

 

The Origins of the AAII Model Shadow Stock Portfolio

AAII InvestoGraphic: Adjusting Overweight Positions Allowing a portfolio position to become oversized relative to your other holdings undermines the concept of diversification. This AAII InvestoGraphic offers guidance on how to pare down a position in a stock whose gains have caused it to have an outsized weighting relative to the other portfolio positions. The Model…

 

Some Thoughts About Allocating to Cash

One of the Briefly Noted columns appearing in next month’s AAII Journal will give tips on what to do during each of the five years leading up to retirement. In the column, we reference AAII founder James Cloonan’s Level3 withdrawal rules. Among those rules is allocating an amount equivalent to two to four years of…

 

Projecting an Aging Parent’s Finances

In assisting my mother-in-law with her finances, one of the things I’ve done is to project how long her savings will last. I’m monitoring her income, spending and savings to ensure she is able to live comfortably now and still has enough to cover future potential living and care expenses. Since it may be of…

 

Second-Quarter Earnings and Tips on Analyzing the Numbers

Second-quarter earnings will begin to heat up next week. Thomson Reuters projects S&P 500 index earnings growth of 20.7% and revenue growth of 8.1% on a blended basis. (The blended number uses results from both the 20 S&P 500 companies that have reported as of this morning and the consensus forecast of analysts’ estimates for…

 

The July 2018 AAII Journal is Now Available Online

  Feature Article: Portfolio Strategies » For Bucket Portfolios, the Devil Is in the Details by Christine Benz Guidance on implementing a bucket strategy in a real world portfolio, including portfolios with more than one type of account.     Portfolio Strategies » Diversifying Through Reinsurance and Marketplace Lending Interval Funds by Larry Swedroe Alternative…

 

AAII Survey: Retail Investors Split as to Whether Value Premium Still Exists

In investing, value premium refers to the greater risk-adjusted return of value stocks over growth stocks. Eugene Fama and Kenneth French first identified the premium in 1992, using a measure they called HML (high book-to-market ratio minus low book-to-market ratio) to measure equity returns based on valuation. In effect, they found that stocks with low price-to-book-value ratios performed better than stocks with high price-to-book-value ratios,…