Value Works, But You May Want to Add Additional Criteria

In its purest form, value investing involves solely buying cheap companies. Just cheap companies. Studies of valuation either use high minus low (buying the cheapest stocks and shorting the most expensive stocks) or separate stocks into deciles (10 evenly split groups) or quintiles (five evenly split groups) based on their relative valuation ratios. No consideration…

 

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…

 

Finding Stocks With “Big and Safe” Dividends

This week’s AAII Weekly Digest highlights these “must-read” AAII articles:   What You Need to Know About Bond Yields to Determine Your Returns Current yield is simplistic to calculate, but other measures of yield can help you make better investment decisions. However, advisers and the media talk about yield on different investment products without necessarily…

 

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…

 

AAII Journal October 2016 Issue

The October 2016 AAII Journal is Now Available Online. Feature Article: What the Evolving Robo Advisory Industry Offers Acquisitions and new, large entrants have altered the competitive landscape, but robo-advisors continue to focus on providing low-cost portfolio management services.   Also in This Issue: Portfolio Strategies: Active Management Stinks, But It Doesn’t Have To Active approaches…

 

AAII’s Most-Read Articles for September 2016

Here are the Top 10 articles from AAII.com for September 2016 (based on unique page views):   Why Buy Bonds If Interest Rates Will Rise? Starting a bond ladder creates income now and produces cash flow that can be used to reinvest if and when interest rates do rise. The Top 10 Economic Indicators: What…

 

9 Rules for Better Stock Investing

This week’s AAII Weekly Digest highlights these “must-read” AAII articles: Why Value Beats Growth: A Brief Explanation The various characteristics of stocks that generate higher returns than what the capital asset pricing model (CAPM) would predict are known as “stock market anomalies.” Two of the most famous anomalies are size and value. This article sets out…

 

Analyzing a Stock by Its Dividend and Shareholder Yield

This week’s AAII Weekly Digest highlights these “must-read” AAII articles: High Buyback Yields James O’Shaughnessy, in the fourth edition of his book “What Works on Wall Street” found that stocks with the highest buyback yield (top 10%) outperformed the overall stock universe by an average of 3.2 percentage points a year from the start of 1927…

 

Over One in Four Respondents See Stocks as Overvalued

This week’s Sentiment Survey special question asked AAII members what their comfort level is with the current valuations of stocks. Slightly more than one out of four respondents (26%) view stock prices as being overvalued. An additional 22% said that they are either uncomfortable with current valuations or that stocks are somewhat overvalued. The lack…

 

Retirement Readiness is Being Assessed in the Wrong Manner

This week’s AAII Weekly Features highlight these valuable AAII articles: Methods for Valuing a Stock Based on Profitability and Growth: By using different valuation methods, a range can be established for determining whether a stock is cheap or expensive. Retirement Readiness is Being Assessed in the Wrong Manner: No consensus exists on an acceptable risk…