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….

 

AAII Survey: 30 Years Later, Most Individual Investors Believe Another “Black Monday” is Possible

The following is an excerpt of my weekly commentary for AAII’s Stock Superstars Report from October 20, 2017. As you may have heard, yesterday (Thursday) marked the 30th anniversary of “Black Monday,” the biggest one-day stock market decline in Wall Street history. These days for many, myself included, Black Monday takes a backseat to the bear…

 

Mr. Market Is Distorting Your Tolerance for Risk

When NPR’s update of the day’s headlines mentions the stock market’s lack of volatility, conditions must be extraordinarily calm. Such is the case right now. The Chicago Board Options Exchange’s Volatility Index (the CBOE’s VIX)—an obscure index to those who don’t focus on the financial markets—made the morning news. While most investors prefer calm conditions…

 

AAII Journal April 2017 Issue Now Available

Feature Article: Portfolio Strategies » Factors Allow Investors to Think Differently About Diversification Tilting a portfolio to a small number of factors, including value and size, can increase returns while at the same time reducing risk. In This Issue: Portfolio Strategies » Asset Allocation, RMDs and Portfolio Survival A diversified portfolio not only increases return…

 

March Changes to SSR Portfolio

We have posted our monthly changes to the SSR tracking portfolio. For more information on this month’s deletion and addition, read the March SSR Monthly Report. February Market Recap The momentum of U.S. stocks that took hold in the aftermath of the November election continued onward in February. Through Friday’s close, the iShares DJ U.S. ETF…

 

The Advantages of Simple Allocation Strategies

 Investors are undoubtedly familiar with the concept of diversification, which is a fundamental idea underlying modern portfolio theory. The phrase, “Don’t put all your eggs in one basket” is one that has been familiar to investors for thousands of years. At least intuitively, it has been so since ancient Roman entrepreneurs diversified against the loss…

 

An Election Trend That Might Not Be Repeatable

The election day is just 11 days away, thank goodness. As it nears, articles and reports are appearing about the election’s impact on the market. We’re going to discuss the data in the November Stock Superstars Report, which will be posted online Friday evening, but I’ll share some of the data here as well. Rather…

 

The 10 Myths of Retirement Planning

This week’s AAII Weekly Digest highlights these “must-read” AAII articles: The 10 Myths of Retirement Planning Retirement planning requires a clear-eyed analysis of future needs and income, but many individuals view retirement through rose-colored glasses. Here are some of the most common myths and how you can bring reality into focus. The Importance of Diversification…

 

The Benefits of Asset Allocation

A Chicago Tribune article by Kiplinger’s Anne Kate Smith discusses the impact of asset allocation on portfolio performance. It states that research has shown that 88% of a portfolio’s movement is attributable to asset allocation. While the article also says that research indicates that having a diversified portfolio means you may lag the market in bull…

 

Central Banks Seen as Biggest Obstacle Facing Fixed-Income Investors

The low-interest rate environment of the last several years has forced many investors to seek alternative forms of investment yield beyond traditional fixed-income instruments Faced with that reality, we posed the following question to our readers last week: What is the biggest obstacle facing fixed-income investors right now? Here are the results: As of 7:30…