Does the AAII Model Shadow Stock Portfolio historical return take into account all transaction costs and expenses including taxes? Does the AAII real-world portfolio experience the same bid-ask spread issues with impressive results?
—alphamean via Web inquiry
CI Editor’s Response:
The Model Shadow Stock Portfolio was created in 1993 by our founder James Cloonan. The portfolio’s reported returns are based on a real-money portfolio that we hold here at AAII, which means we experience the same bid-ask issues that everyone else experiences. For this reason, it is recommended that when you decide on a stock to purchase, do not rush into buying the shares. Make an attempt to get a good fill by using limit orders since the fill price with market orders can fluctuate dramatically.
The performance figures reported take into account the bid-ask spread as well as commissions. The figures are exactly what Cloonan has been able to obtain using the selection, purchase and management methodology outlined on our website and in the AAII Journal. The portfolio performance figures do not, however, take into account taxes, which are different for all investors. Needless to say, in a taxable account any capital gains will be taxed. The gains produced in the Model Shadow Stock Portfolio are normally long-term capital gains.
For more explanation on the Model Shadow Stock Portfolio, go to www.aaii.com/model-portfolios/stock-faqs.
What is the average yearly turnover ratio for the Stock Superstars Report? What is the current overall dividend yield of the Stock Superstars Report?
—Eric Zeiher via Email inquiry
CI Editor’s Response:
The Stock Superstars Report is a premium portfolio newsletter that AAII members can subscribe to. The portfolio is a total market portfolio that consists of 36 stocks separated into four separate groups, each with its own investment methodology. Together, the stocks create a diversified portfolio with impressive returns.
The portfolio is rebalanced once a month with zero to two stocks removed from the portfolio on a monthly basis. Typically, a given year will see approximately 10 stocks that are removed from the portfolio, meaning that the yearly turnover is around 30%.
Yield is not a main criterion for the portfolio as a whole. However, one group of stocks, out of the four groups, does have a yield element to it. In addition, there are stocks that provide a dividend in each of the groups of stocks. As of the end of October, there were 25 stocks, out of the 36 all together, that provide a yield, ranging from a low of 0.3% to a high of 3.5%.
For more information on the Stock Superstars Report, go to www.stocksuperstars.com.
I am new to AAII and would like to study the history of how many companies are selected by each screen each month. Is that information available? If so, where can I find it?
—jkspears via Web inquiry
CI Editor’s Response:
Most AAII and Computerized Investing subscribers are aware that AAII offers over 60 different stock screens based on the different methodologies of famous investing gurus. Each of these screens has different characteristics since each has a different focus (value, growth, price momentum, etc.).
AAII updates the characteristics of these screens and provides them to our members on a quarterly basis. In the Stock Screens area at AAII.com, click on Screen Characteristics to see this page. The area shows the monthly average number of holdings as well as the average monthly turnover. In addition, it provides median figures for commonly used fundamental data points. This is a great page to review when researching a stock screen that you may want to use to see which ones fit into your investment approach.
I am able to download the Portfolio Optimization program featured in the Third Quarter 2012 Computerized Investing Issue. But I am having trouble running the install program. I get an error message stating, “The version of the file is not compatible with the version of Windows you’re running.” I am using Windows 7. Is there a program that will run on Windows 7?
—David Volkman via Web Inquiry
CI Editor’s Response:
The article written on the Portfolio Optimization program created by David Herron has generated significant interest after we featured it in Computerized Investing. The program uses modern portfolio theory to identify efficient combinations of stocks and mutual funds with the lowest possible level of risk for a specified annual portfolio return, hence creating an “efficient portfolio.” It is available free of charge to AAII members in the Download Library at AAII.com (www.aaii.com/download-library/download?DL_ID=572). However, currently the program requires a 32-bit operating system to run properly. If you are running a 64-bit operating system, Microsoft provides you with a 32-bit compatibility mode that will run Portfolio Optimization. Testing of the program was done on a 64-bit system running the 32-bit utility, which can be downloaded at the Microsoft website.
i just joined and still looking over all the information. will comment latter
posted 3 months ago by Ricahrd Neeson from Michigan
Could you provide more detailed information about the download that allows a computer running a 64-bit OS to run David Herron's program? I've had no luck finding the utility referred to here.
posted 2 months ago by Scott Boatwright from North Carolina
@Scott, you can try running the program in Compatibility Mode. If you are running Windows 7 64-bit, right-click on the .exe and choose Troubleshoot compatibility. Windows will then suggest ways in which you can run a non-64-bit program. Wayne A. Thorp, CFA, editor, Computerized Investing.
posted 2 months ago by Wayne Thorp from Illinois
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