2008 AAII Stock Screen Roundup: Piotroski Strategy Defeats the Bear
by Wayne A. Thorp, CFA
To borrow from Thomas Paine: These are the times that try investors’ souls.
For many investors, 2008 cannot end soon enough. The market, as defined by the S&P 500, spent most of the first nine months of the year moving within two rather well-defined trading channels—the first lasted from the start of the year through late June, and the second from late June through late September. At that point, stocks picked up momentum on the downside, until they hit an intermediate low in late October, and then rallied almost 9% leading up to the Presidential election.
In this article
- Ranking the Annual Performance
- The Top Screen for 2008
- Don’t Forget Dividends
- The Long-Term Winner
- Conclusion
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However, the rally was short-lived, and after Election Day the swoon deepened: At the close on December 5, 2008, the S&P 500 index was down 40.3% since January 1.
If the year had ended there, this would have been the worst single-year performance for the S&P 500 since it lost 35.03% in 1937 and would rank second only to 1931, when the index lost 43.43%.
During periods like this, very few long-only stock selection strategies generate gains, and AAII’s stock screens are no exception. Of the 56 screening methodologies tracked on AAII.com, only one has a positive year-to-date return. Compare this to the 20 that were up year-to-date at mid-year 2008.
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