Dividends and Buybacks Drive Stock Returns

The return of capital by companies to shareholders is a key contributor to long-term returns. A forthcoming study by Morningstar’s Philip Straehl and Yale’s Roger Ibbotson attributes more than two-thirds of the real (inflation-adjusted) return in stock prices for the period of 1871 through 2014 to total yield. Return of capital includes both dividends and…

 

Tips for Using Academic Research About Investing

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 new ideas, these papers can range along a spectrum from being…

 

Nearly Half of Surveyed Members Don’t Think Record Highs Matter

This week’s Sentiment Survey special question asked AAII members why it does or not matter if the major U.S. stock indexes rise above their record highs in the near term. Almost half of respondents (49%) said it does not matter. Many of these members said they invest for the long term and/or are more focused…

 

One in Three Respondents Unaffected by Q4 Earnings

This week’s Sentiment Survey special question asked AAII members how fourth-quarter earnings have influenced their outlook for stock prices. One out of three respondents said fourth-quarter earnings did not influence or have only had a minor influence on their outlook for stocks. Many of these respondents said they are more focused on other factors, while…