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Best of the AAII Journal

My favorite articles are listed below. In hand-picking the commentaries for this list, I sought out a mix of articles that covered various aspects of investing strategies and portfolio management.

Beginning Investor

The Tax Consequences of Investing

- by Charles Rotblut, CFA

Some investment actions cost you money; others reduce out-of-pocket expenditures.
 

BEHAVIORAL FINANCE

The Case for Systematic Decision-Making

- by Wesley R. Gray

Though human expertise is needed to design models, models perform better than humans because they aren’t subject to behavioral biases.
 

BONDS

Why Buy Bonds If Interest Rates Will Rise?

- by Hildy Richelson and Stan Richelson

Starting a bond ladder creates income now and produces cash flow that can be used to reinvest if and when interest rates do rise.
 

FINANCIAL PLANNING

From Saver to Spender: Managing Your Money in Retirement

- by Carrie Schwab-Pomerantz

Following these nine guidelines can help reduce your financial stress and increase the odds of enjoying a successful retirement.
 

FINANCIAL STATEMENTS ANALYSIS

Valuation Ratios: The PEG Ratio

- by Joe Lan, CFA

The PEG ratio factors in a company’s growth into its valuation, allowing investors to compare companies with different rates of growth.
 

FIRST CUT

Combining Value and Momentum

- by John Bajkowski

Low relative valuation ratios are combined with momentum indicators to find potential winning stocks.
 

MUTUAL FUNDS & EXCHANGE-TRADED FUNDS

Achieving Greater Long-Term Wealth Through Index Funds

- an interview with John C. Bogle

Index investors, in aggregate, are likely to realize higher returns because of lower costs and the effect of reversion to the mean on active strategies.
 

PORTFOLIO STRATEGIES

Reduce Stock Exposure in Retirement, or Gradually Increase It?

- by Michael Kitces and Wade Pfau

Starting retirement with a 30% allocation to equities and then gradually increasing it to 70% leads to a 95.1% probability of not outliving your savings.
 

STOCK SCREENS

Finding Value and Financial Strength Based on “What Works on Wall Street”

- by John Bajkowski

Using James P. O’Shaughnessy’s recent AAII Journal article as a basis, we identify stocks with favorable valuation, financial strength and earnings quality composite scores.
 

STOCK STRATEGIES

Selecting a Valuation Method to Determine a Stock’s Worth

- by Robert R. Johnson , Stephen M. Horan and Thomas R. Robinson

Guidance on when it makes sense to compare a stock’s price to fundamental factors or other companies and when a stock’s absolute value should be calculated instead.