Why a New Asset Allocation Approach is Needed

This week’s AAII Weekly Digest highlights these “must-read” AAII articles: Why a New Allocation Approach is Needed: The traditional way of allocating portfolios costs investors significant wealth and fails to consider how risk actually occurs in the real world. In his forthcoming book, “Investing at Level3,” AAII founder James Cloonan challenges the traditional manner in which…

 

Market Factors and Regular Rebalancing Affecting Allocation Decisions

Last month’s Asset Allocation Survey special question asked AAII members what most often causes them to alter their portfolio allocations. The largest group (14% of all respondents) cited market factors such momentum, technical analysis and valuation. More than 13% said that they periodically rebalance their portfolios or otherwise make small adjustments when their allocations stray…

 

12 Steps to Drive Emotions Out of Investing Decisions

This article originally appeared in the September 2014 issue of the AAII Journal. There is a large body of research showing that investors depend on emotions and anecdotal information when making decisions. You are no doubt aware of this and are familiar with the resulting cognitive investment errors. There have been numerous articles dealing with how investors can…

 

A Few Observations on Today’s Market Decline

The stock market has gotten off to a bad start this year, and to say Mr. Market is in a rotten mood today may be an understatement. Uncertainty about the Chinese economy and falling oil prices are to blame. For all the growth China has experienced, its economy and its stock market is still relatively…

 

Members Unconcerned By Index Concentration

This week’s Sentiment Survey special question asked AAII members how concerned they are about the performance of the S&P 500 and the NASDAQ being driven by a relatively small number of stocks. About 40% of respondents said they are not concerned. Some said they are more focused on other issues and other respondents said they…

 

Market Volatility Puts Buy-and-Hold to the Test

In a recent InvestmentNews blog post, Jeff Benjamin discusses how the latest market volatility has put a strain on long-term, buy-and-hold investment strategies. For those feeling the temptation to to sell, fearing a big market pullback, Benjamin offers some statistics that may keep you from placing those sell orders. “BUCKLE UP” Benjamin cites research from Todd Rosenbluth,…