Do the Top ETFs Continue to Outperform?

This week’s AAII Weekly Digest highlights these “must-read” AAII articles:   Recent Performance Influences Fund Choices A mutual fund’s recent returns and its relative performance significantly influence whether investors choose to buy or hold onto the fund. The magnitude of these returns and whether the fund is already owned also plays a role. Data shows…

 

A Few Observations About the Dow’s Latest Change

General Electric Co.’s (GE) long run as a member of the Dow Jones industrial average will end on Tuesday morning. As you have probably already heard, the stock is being replaced by Walgreens Boots Alliance Inc. (WBA). General Electric was an original member of the Dow, first added back in May 1896. According to S&P…

 

How to Follow AAII’s Level3 Passive Portfolio

This week’s AAII Weekly Digest highlights these “must-read” AAII articles:   The Top Mutual Funds Over Five Years: Tech Takeover Technology funds lead this year’s list of the top funds, though two non-sector funds are also on the top-10 list. Guidance on How to Follow the Level3 Passive Portfolio The AAII Level3 Passive Portfolio is…

 

Most Mutual Funds Do Not Outperform

This week’s AAII Weekly Digest highlights these “must-read” AAII articles:   Fund Manager Experience Does Not Predict Outperformance Experience by itself does not predict whether or not a mutual fund manager will outperform in the future. Though mutual fund managers who have been the sole manager of their funds have as a group outperformed the…

 

An Argument for Favoring the Loser Over the Winner Funds

Performance chasing is common in investing. Not investing based on momentum strategies per se, but choosing funds, money managers and newsletters based on recent performance. Institutional investors (pensions, endowments, etc.) are as guilty as individual investors when it comes to looking for the hot hand. Such behavior often leads to worse outcomes than better ones….

 

Tariffs and the Market Environment

As the bull market nears its ninth anniversary, the backdrop is evolving. This year has already seen more days with the S&P 500 index closing up or down by 1% or more than we saw during all of last year. Deflation—a concern not so long ago—has been replaced by worries about inflation and a potential…

 

The Size Premium Lives, But Not for All Small-Company Stocks

One driver of stock price returns debated among research papers is the size premium. The size premium—also known as small minus big (SMB)—is the historical outperformance of small-company stocks relative to large-company stocks. The continued existence of this so-called anomaly has been called into question because of the essentially equal returns between small- and large-company…

 

AAII Readers Predict Their Top Sector Over the Next Five Years

Each year, AAII publishes its guides to the top mutual funds and exchange-traded funds. In conjunction with those guides, we also publish an analysis of the top-performing funds and ETFs over the last five years. For the last several years, health care has dominated all other sectors. In this year’s coverage of the top mutual…

 

Market Meltup Creates Pressure to Own Stocks

One term used to describe the market’s post-election move is “meltup.” It’s a financial industry antonym for meltdown. During both meltups and meltdowns, there is a strong element of psychology at play. Market observers have attributed the ongoing post-election rally to the election of President Donald Trump. Regardless of what you think of his policies,…