• Editor's Note
  • Editor's Note

    by Charles Rotblut, CFA

    The first issue of the AAII Journal was published 35 years ago. On the inaugural cover were simply the words: “The American Association of Individual Investors is an independent nonprofit corporation formed for the purpose of assisting individuals in becoming more effective managers of their own assets through programs of education, information and research.” (The second issue featured a photo of the Chicago Board of Trade. In recognition of the Journal’s start, a more current photo appears on this month’s cover.)

    Many magazines have come and gone since the first AAII Journal was published. Much of the credit for the continuation of this journal goes to AAII founder James Cloonan, who is the first recipient of the Cloonan Award for Excellence in Investment Education. (More information about the award can be found here.) My predecessor Maria Crawford Scott also deserves much credit for everything she accomplished during her 25-year tenure as editor.

    Much has changed since 1979. As Jason Zweig noted in a November 2013 Wall Street Journal article about Jim Cloonan, brokerage commissions have plunged from over $40 to under $10. Most individual investors only have infrequent conversations with a representative of their brokerage firm, and those conversations are typically about something other than placing a trade. Defined-contribution plans (e.g., 401(k) plans) have largely replaced defined-benefit plans (e.g., pensions) as employer-sponsored retirement plans. Exchange-traded funds, which didn’t even exist until 1993, now control over $1.6 trillion in assets. Information is distributed faster than ever and investors can access data, and instantly react to it, anywhere that Internet connectivity exists. The Dow Jones industrial average was approximately 820 at the start of 1979; as we went to press in late December 2013, the Dow was trading at approximately 16,150.

    Some things have not changed. The first feature article in the AAII Journal discussed how to resolve problems with your brokerage firm. Memories of the last two bear markets were still fresh in 1979, as they are at the start of 2014. Uncertainty about the direction of the economy and frustration with the federal government existed then and unfortunately exists now.

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    Charles Rotblut, CFA is a vice president at AAII and editor of the AAII Journal. Follow him on Twitter at twitter.com/CharlesRAAII.


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