We May Be Getting Closer to the Bottom

The current decline has put the S&P 500 index on pace to experience an unusually bad month. Through yesterday’s close, the large-cap index was down 10.6% on a month-to-date basis. This ranks as the 27th worst calendar month, according to @OddStats. It also makes this month the toughest since February 2009, when the S&P 500…

 

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 June 2018 AAII Journal is Now Available Online

Feature Article » Making Better and More Rational Decisions by Charles Rotblut, CFA and Annie Duke Thinking about the various ways the future could play out can help you prepare for unfavorable outcomes and avoid irrational decisions. First Cut » Hagstrom’s Essential Buffett Stocks by John Bajkowski These 25 stocks have characteristics matching Warren Buffett’s…

 

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…

 

Investing Rules of Thumb and Key Phrases: Gleaning the Nuggets of Truth

Editor’s note: This post was excerpted with permission of the publisher, John Wiley & Sons Inc. from “The Forbes CFA Institute Investment Course: Timeless Principles for Building Wealth.” Copyright © 2011 by Forbes, LLC. More information about the book and a multimedia supplement are available at www.cfainstitute.org/forbes. Humorist Will Rogers was once asked for investment advice….

 

Human Capital and the Theory of Life-Cycle Investing

Human capital is something we all have, and it’s becoming a front of mind issue in the press and in the field of financial planning. What’s up with that? What Is Human Capital? For economists, there is a very specific definition for human capital. They say it is the value of future earned income expressed…

 

Liquidity: How Much Do You Need?

Individuals have varying needs for assets that are readily available. How does one decide the appropriate level? A Keynesian analysis comes from the late Baron of Tilton. How much of a liquid balance should investment portfolios contain? That question crops up frequently in financial planning as investors try to determine their overall portfolio. The first…

 

Valuation’s Usefulness for Forecasting and Setting Asset Allocation

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 defined as a company’s dividends per share divided by the current stock price; a…

 

The June 2017 AAII Journal is Now Available Online

Feature » Piotroski Price-to-Book Screen by John Bajkowski The ranking system’s highest scores work well for high price-to-book stocks, but F-Scores of 6 to 7 work better for low price-to-book stocks. Financial Statements » Using Accruals to Judge How Persistent Earnings Will Be by Charles Rotblut, CFA Accruals can be described as forecasts of future…