Letters to the Editor

Comments Posted On-Line to “The Dividend Puzzle: The Relationship Between Payout Rates and Growth,” by Stanley Block, May 2009:

Dividend yield is a ratio. There are two components in it: the dividend and the stock price. Higher dividend yield might not be caused by higher dividend but lower stock price. “The Dividend Puzzle” might not be a puzzle caused by a high dividend but a puzzle caused by a lower stock price when the dividend yield is calculated. If it is a lower stock price puzzle, then it is not a puzzle anymore because the initial lower valuation of the stock by investors may not have been justified by the

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Ganghuai Wang From USA

I’m always suspicious that corporate execs hold back dividends because the price of their personal stock options appreciates more if cash is retained in the business (i.e., shareholders would prefer a 3% dividend to retaining cash in a business growing at 2%). But if executives can grow book and stock price (linked to options), why be ethical?

Louis From Ohio

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July 2009 Issue

Features
Bear Market Grads: What You Should Learn From the Financial Crisis
Stock indexes remain substantially below their peaks, banks are in lousy shape, and governments around the world are running huge deficits. The market has been a brutal teacher, but there are important lessons to be learned from the crisis--and positive steps investors can take going forward.

The First Cut
Stocks With a Competitive Edge
A starting point for investors. This issue's focus is on firms with positive sales growth and above-average profit margins.

Offbeat Offerings
Investing in Commodities
An investor reference for products that are not your typical offering. This issue's focus is on the many ways to invest in commodities.

Portfolio Strategies
Bear Market Start May Offer a Strong Finish for Young Investors
Would you rather start investing for retirement during a bull market or a bear market? While some young investors may be warily viewing stocks right now, in the past such downturns have presented investors with rare opportunities to benefit from healthy future returns. A new study by T. Rowe Price.

Hot Links
Medicare Health Insurance Coverage
Do you need help understanding Medicare benefits? These Web sites offer the best information relating to basic coverage issues, benefits offered, how to enroll, how to choose your options and how to compare plans.

Investor Professor
Munis vs. Taxables: How to Determine the Taxable Equivalent Yield
Munis offer income that is sheltered from federal taxes, but at yields that are typically lower than taxable bonds. How do you compare bonds yields that receive different tax treatments? A relatively simple formula puts the yields on an equal tax footing.

Stock Screens
2009 Mid-Year Stock Screen Review: Is a Market Rebound in Progress?
Only time will tell whether we are experiencing a true turnaround, but the typical exchange-listed stock is up over 27% for the year, and many of the AAII stock screens have turned in performances that dwarf the broader market.

AAII Model Portfolios
Rebound: Model Shadow Stock Portfolio Strongly Up, But Still Playing Catch-Up
The good news: The Model Shadow Stock Portfolio is up 30.1% year-to-date, and way ahead of the S&P 500. But bear market math is brutal: When you are down 50%, you have to go back up 100% just to get even, and for that, we still have quite a ways to go.

Departments
Briefly Noted

Briefly Noted

Letters to the Editor
Member questions and comments on recent AAII Journal articles.

Comments Posted On-Line to “The Dividend Puzzle: The Relationship Between Payout Rates and Growth,” by Stanley Block, May 2009:

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July 2009 Issue