What Members Are Asking Online

Sharing AAII Content

It seems to me that allowing members to share AAII content through various social networks is an effort to dilute the value of our paid membership in order to get AAII content in the public domain for marketing purposes. These sharing services are anything but controlled or private. I do not recall the membership being surveyed about this. However, by permitting such sharing, all we really need is one paid member to share content with the rest of the globe. It also devalues the investment information AAII presents. As a much larger (and non-paying) investor market acts on that information, it will neutralize the value to AAII members, unless the members acted on it first. This seems like a move to increase AAII income rather than to serve the paying membership.

—Stephen from Nevada via Web inquiry

CI Editor’s Response:

Thank you for your feedback. We are respectful of the benefits of AAII membership, but we also recognize that our members are the best ambassadors for spreading the educational benefits of becoming an AAII member. Our mission is to educate individual investors, and we feel it is in the best interest of all our members and the success of the association to expose a wider audience to AAII. We are monitoring the use and impact of article sharing, and we will adjust our policies if it dilutes the value of membership or if members decide not to participate.

Shadow Stock Portfolio: Actual Vs. Passing List

Several of the stocks that are a part of AAII’s Model Shadow Stock Portfolio are no longer included in the Passing Companies list. My concern has less to do with timing than with the research that has been done to actually include these stocks in the portfolio.

—Robfere via Web inquiry

CI Editor’s Response:

The Model Shadow Stock Portfolio is based on a screen that AAII developed many years ago. A screen is simply a set of fundamental criteria used to winnow down a universe of stocks. At any given time, there can be 20 or more stocks that pass this screen. These passing stocks all meet each of the initial purchase criteria that were set in the screen.

The actual portfolio is the list of stocks that are currently held in the Model Shadow Stock Portfolio. As you may be aware, the Shadow Stock Portfolio is a real-money portfolio that we hold at AAII, and the returns that we report are based on real-world performance. When stocks are currently in the portfolio but are not on the passing companies list (there should be many of them at any given time), it simply means that the stocks passed the screen at some time in the past and were deemed strong enough for inclusion in the actual portfolio. Although the stocks no longer pass the original screen, they have not triggered any of the sell rules and therefore continue to be held. For more information, you may visit www.aaii.com/stockportfolio.

AAII Stock Screens

Although AAII publishes the lists of companies passing the stock screens online in the middle of the month, when are those companies actually added for calculating performance? An example would help me understand how and when you are actually measuring performance and how we might use the weekly updates from Stock Investor Pro to approximate the methods and results you talk about when using the stock screens.

—William from Illinois via Web inquiry

CI Editor’s Response:

AAII always reports figures using end-of-month Stock Investor Pro data. The data as-of date is provided on the Stock Screens home page and at the bottom of each list of passing companies. The performance is calculated as if each of the passing companies were held from the time they pass the screen through the entire following month. For instance, if the current data as-of date is April 30, 2011, the passing companies shown are the companies that passed each screen as of that date. These companies are theoretically held for the entire month of May, and the price change during that time generates our performance figures for May.

Wikinvest “Read-Only”

How does “read-only” access work on Wikinvest? The site says you give Wikinvest “your login and passwords for the brokerage and bank accounts you want to add.” I don’t know about all logins, but mine provide read and write (trade) capabilities, so how is it that Wikinvest only gets to read?

Richard I. from Illinois via Web inquiry

CI Editor’s Response:

Firstly, Wikinvest has stated that their website offers bank-level security, employing the same people that built Amazon.com’s technology for securing credit cards, and should be very safe. Any website can potentially be compromised, including large brokerage firms, but the chances are minute.

With that said, in this context, read-only is referring to the fact that Wikinvest simply “reads” your holdings and performance numbers from your brokerage accounts and displays them to you. There is no way to log into your Wikinvest account and perform trades or withdraw money. However, Wikinvest does use your bank login and password in order to sync with your bank, so there is the potential that this data can be compromised. For those who are uncomfortable providing a third party with their account login information, Wikinvest is implementing the capability for users to manually input items such as cost basis and shares owned or use a CSV upload.