• Letters to the Editor
  • Letters to the Editor

    Letters To The Editor Splash image

    To the Editors:

    I read Paula Hogan’s May 2005 article entitled “What You Need to Know About Long-Term Care Insurance.” Here are a couple more resources on long-term care from University Extension Services. They are unbiased, research based, and non-technical.

    The first is an award-winning program to help families determine whether to buy long-term care insurance and how to care for family members in need:

    The second is an analysis of whether you should buy long-term care insurance:

    Judith R. Urich
    Via E-mail

    To the Editors:

    What is the average length of time that stocks are held in AAII’s Model Shadow Stock Portfolio [last reviewed in the July 2005 AAII Journal]?

    Tom Tiedgen
    Via E-mail

    Jim Cloonan Responds:
    Historically, the Model Shadow Stock Portfolio has had a turnover of just under 25% a year, and one-fifth is due to buy outs. This translates to an average holding period of four years. The introduction of the two-year rule will impact this. For those adding new funds and able to buy new recommendations without selling any stocks, the four-year average will still hold. However, for those needing to sell older stocks in order to buy new recommendations the average will likely drop depending on the number of new recommendations. I would estimate that in AAII’s own actual portfolio, which does not add funds, that the average holding period will drop to two and a half years.


    To the Editors:

    I would like to comment on “Tracking Basis in Mergers, Splits and Other Corporate Actions,” by Steve D. Conlon and Sanjeev Doss in the June 2005 AAII Journal. I think it must be pointed out that identifying the specific block of stocks to be traded before the trade is not possible if you are trading using Telebroker or the Internet programs of various stock brokers. In other words, there is no provision in these programs to allow you to identify the specific lot that you are selling. In order to specifically identify the lot to be traded you have to speak to a “live” trader and pay the higher broker commission rates that such a “live” direction entails.

    R. Rodgers
    Via E-mail


    To the Editors:

    I think that your article on dividend reinvestment plans is misguided [“Low-Cost Investing: A Guide to Dividend Reinvestment Plans,” June 2005 AAII Journal]. First, you are only buying 3% or 4% of additional shares in the company. Second, the process is complicated. Third, commissions today are only about $15 per trade. And fourth, and most important, dividend reinvestment makes stock basis tracking for tax purposes very difficult. Save your money and buy 100 shares.

    Leo Scully
    Via E-mail


    To the Editors:

    I am a AAII member and I was very excited when I read the description of the Wall Street City Web site in last year’s “AAII’s Guide to the Top Investment Web Sites” [September 2004 AAII Journal]. This was the only site that offered the ability to do back testing. However, when I tried to log on to the site, I found out that the site no longer exists. Do you know if there is any other site out there that allows one to backtest their theory?

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    Sean Ehrlich, CFA
    Via E-mail

    The Editors Respond:
    The Wall Street City Web site was purchased by INVESTools.com and merged into their subscription-only service that costs several thousand dollars.

    The site offered limited (12-month) backtesting of fundamental and technical screening methodologies and is sorely missed. Sadly, there is no service we are aware of that offers meaningful backtesting (covering several years) of screening methodologies.





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