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A Matter of Opinion Articles

New From AAII: Specific Guidance on Stock and Fund Selection

September 2003 by James B. Cloonan
AAII Chairman Jim Cloonan expands coverage of the model stock portfolio and constructs a model mutual fund portfolio. Both share the same philosophy: consistency, risk control and selections that are best for individuals rather than institutions. Read more »

The AAII Beginner's Portfolio: An Annual Performance Review

April 2003 by James B. Cloonan
Over the last 10-year period, the Beginner's Portfolio has beaten the S&P 500, the Russell 2000, and the micro-cap index. This confirms what historical research has shown: Over the long run, small-cap stocks, on average, have higher returns. Read more »

Asset Allocation and Risk: How to Build Your Own Portfolio

November 2002 by James B. Cloonan
There are two steps to developing a truly diversified portfolio that meets your personal needs: Set a level of risk you can live with, and pick the individual assets and classes that will provide the highest return within that risk level. Read more »

Asset Allocation Approaches: Building From the Bottom Up

October 2002 by James B. Cloonan
To reduce risk, an investor needs to add to his portfolio holdings that have both good prospects and low correlations with other holdings. Whether those assets belong to a particular class is not important. Read more »

Popular Allocation Approaches Put the Cart Before the Horse

September 2002 by James B. Cloonan
Allocation may be helpful, but the key to risk control is the selection of the individual assets in the portfolio. Choose individual investments first, allocate weightings later. Read more »

Introducing Our New Service: AAII's Stock Superstars Report

August 2002 by James B. Cloonan
The concept is to select stocks that will appreciate more than the market, but with less risk. It goes beyond any single approach by integrating the work of investment superstars into a complete portfolio management system. Read more »

Measures of Portfolio Risk and How You Can Apply Them

July 2002 by James B. Cloonan
Risk measures are only meaningful when looking at a complete portfolio. The risk of a single stock can be reduced by diversifying among different kinds of stocks, so that the overall portfolio risk is much lower. Read more »

Evaluating the Research on Historical Performance

May 2002 by James B. Cloonan
While all honest research helps to shed light on successful approaches, there are weaknesses in research methods that you need to take into account. In some cases, flawed research may be used to intentionally lead you astray. Read more »

Bear Market Lessons: The Advantage of Micro-Caps

April 2002 by James B. Cloonan
Another lesson to be learned from recent down markets is that there is a weakness in index funds. Virtually all indexes give the most weight to the largest companies. That makes the index fund only moderately diversified. Read more »