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,…

 

The Yield Curve Is Getting Flatter

The stock market endured a mini tantrum on Tuesday in response to a rise in bond yields. The Wall Street Journal described the 10-year Treasury note’s yield as experiencing its largest one-day increase since March 2017. The rise was big enough to cause the benchmark note to end the day with its highest yield in…

 

Picking a Rate of Return to Use for Long-Term Planning

This week’s AAII Weekly Digest highlights these “must-read” AAII articles:   Searching for Future Stock Market Winners A study of past big winners identified common traits centered around value, earnings growth and price momentum. The process of creating a stock selection strategy based on characteristics that have worked well in the past must take into…

 

May AAII Journal Update

Feature Article » The Basics of Real Estate Investment Trusts (REITs) by Jaclyn N. McClellan These investment trusts provide direct exposure to real estate and are required to distribute at least 90% of their taxable income.   Portfolio Strategies » The Impact of Saving Versus Return on Wealth by Craig Israelsen Younger savers benefit more…

 

Revisiting the Lakonishok Approach to Patient Value Investing

This week’s AAII Weekly Digest highlights these “must-read” AAII articles:   EPS Revision Screen Building a screen to isolate S&P 1500 members with price-earnings ratios below their five-year average high and rising earnings estimates. Revisiting the Lakonishok Approach to Patient Value Investing Josef Lakonishok believes value outperforms growth because investors don’t expect much from value…

 

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…

 

April AAII Journal Update

The April 2018 AAII Journal is Now Available Online.   Feature Article » Are You Spending Too Little in Retirement? by Meir Statman While mental tools and self-control are useful when saving, in retirement, they can stop us from spending on ourselves and family.   Financial Planning » Social Security and Medicare Can Raise Retirees’…