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James Cloonan

author Image James B. Cloonan is founder and chairman of AAII. He is author of the book "Investing at Level3: Higher Returns With Minimal Risk for the Long-Term Individual Investor".

Articles by this Author


James B. Cloonan earned his MBA from the University of Chicago and his B.A. and Ph.D. from Northwestern University. After teaching for several years in 1974 he helped found and served as CEO of Heinold Securities, a brokerage firm specializing in options. After selling his interest in that firm, he returned to teaching and began the preliminary work leading to the founding of the American Association of Individual Investors in 1978 and is currently chairman of AAII.

Cloonan is the author of books and articles on investing and writes the Model Portfolios column for the AAII Journal. He created and manages the Model Shadow Stock Portfolio, which has realized an annualized return of over 15% for the past 23 years.

Cloonan has served on several industry and regulatory panels, including the Consumer Advisory Council of the National Futures Association, the Advisory Panel on Securities Markets and Information Technology of the Congressional Office of Technology Assessment, the NASD Special Committee on the Quality of Markets, the New York Stock Exchange Panel on Market Volatility and Investor Confidence, the Chicago Mercantile Exchange Financial Instruments Advisors Committee, the New York Stock Exchange Individual Investors Advisory Committee, and The Consumer Affairs Advisory Committee of the Securities and Exchange Commission.

He lives with his wife Edie in Chicago.

Articles by this Author

  1. AAII Model Portfolios »

    Why Well-Designed Portfolios Don't Depend on Cap Size and Style Categories

    A look at the Individual Investor's Mutual Fund Portfolio--how it performed and its investment characteristics.

    February 2004 | Journal

  2. AAII Model Portfolios »

    What's UP? AAII's Shadow Stock Portfolio

    A strong close to last year bodes well for 2004: A performance and composition update on the AAII Shadow Stock Portfolio.

    January 2004 | Journal

  3. AAII Model Portfolios »

    Focus on the Individual Investor's Shadow Stock Portfolio

    Presenting a model stock portfolio that can be the beginning of the selection process, but not all of it. There are many ways the strategy can be implemented without everyone buying the exact same stocks.

    November 2003 | Journal

  4. A Matter of Opinion »

    New From AAII: Specific Guidance on Stock and Fund Selection

    AAII Chairman Jim Cloonan expands coverage of the model stock portfolio and constructs a model mutual fund portfolio. Both share the same philosophy: consistency, risk control and selections that are best for individuals rather than institutions.

    September 2003 | Journal

  5. A Matter of Opinion »

    The AAII Beginner's Portfolio: An Annual Performance Review

    Over the last 10-year period, the Beginner's Portfolio has beaten the S&P 500, the Russell 2000, and the micro-cap index. This confirms what historical research has shown: Over the long run, small-cap stocks, on average, have higher returns.

    April 2003 | Journal

  6. A Matter of Opinion »

    Asset Allocation and Risk: How to Build Your Own Portfolio

    There are two steps to developing a truly diversified portfolio that meets your personal needs: Set a level of risk you can live with, and pick the individual assets and classes that will provide the highest return within that risk level.

    November 2002 | Journal

  7. A Matter of Opinion »

    Asset Allocation Approaches: Building From the Bottom Up

    To reduce risk, an investor needs to add to his portfolio holdings that have both good prospects and low correlations with other holdings. Whether those assets belong to a particular class is not important.

    October 2002 | Journal

  8. A Matter of Opinion »

    Popular Allocation Approaches Put the Cart Before the Horse

    Allocation may be helpful, but the key to risk control is the selection of the individual assets in the portfolio. Choose individual investments first, allocate weightings later.

    September 2002 | Journal

  9. A Matter of Opinion »

    Introducing Our New Service: AAII's Stock Superstars Report

    The concept is to select stocks that will appreciate more than the market, but with less risk. It goes beyond any single approach by integrating the work of investment superstars into a complete portfolio management system.

    August 2002 | Journal

  10. A Matter of Opinion »

    Measures of Portfolio Risk and How You Can Apply Them

    Risk measures are only meaningful when looking at a complete portfolio. The risk of a single stock can be reduced by diversifying among different kinds of stocks, so that the overall portfolio risk is much lower.

    July 2002 | Journal

  11. A Matter of Opinion »

    Evaluating the Research on Historical Performance

    While all honest research helps to shed light on successful approaches, there are weaknesses in research methods that you need to take into account. In some cases, flawed research may be used to intentionally lead you astray.

    May 2002 | Journal

  12. A Matter of Opinion »

    Bear Market Lessons: The Advantage of Micro-Caps

    Another lesson to be learned from recent down markets is that there is a weakness in index funds. Virtually all indexes give the most weight to the largest companies. That makes the index fund only moderately diversified.

    April 2002 | Journal

  13. Features »

    When Markets Turn Bad the Basics Remain Fundamental

    Feature: The year 2001 has been an example of the need for diversification across styles as well as industries. And the entire bear market should emphasize the need for a long-term commitment.

    November 2001 | Journal