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AAII Model Portfolios Articles

A New Constraint Added to the Model Shadow Stock Portfolio Rules

July 2014 by James B. Cloonan
A rule eliminating candidates with negative earnings estimates has been formalized. Plus, see the latest transactions. Read more »

REITs and Frontier Markets Drive Model Fund Portfolio Higher

May 2014 by James B. Cloonan
Good first-quarter returns by the REIT and frontier markets funds helped the Model Fund Portfolio beat the S&P 500 on a year-to-date basis. Read more »

Model Shadow Stock Portfolio Rules Amended and Clarified

April 2014 by James B. Cloonan
The valuation and market capitalization sell rules have been amended. Plus, the maximum price to pay for new stocks is now listed. Read more »

Model Fund Portfolio: Replacing a Closed Fund

March 2014 by James B. Cloonan
Fidelity OTC (FOCPX) is being added to replace Yacktman Focused (YAFFX). Plus, Jim’s thoughts about closed mutual funds. Read more »

Model Shadow Stock Portfolio: Purchase Guidelines and Rule Changes

January 2014 by James B. Cloonan
Guidelines regarding price action and news are discussed, as well as a higher market capitalization limit and the latest portfolio changes. Read more »

Building an All-ETF Subset From the Model Fund Portfolio

November 2013 by James B. Cloonan
The Pure ETF Portfolio is an example of how a diversified portfolio can be constructed solely out of ETFs. Read more »

The Model Shadow Stock Portfolio and Micro-Cap Stock Spreads

October 2013 by James B. Cloonan
Guidance for reducing the negative impact of spreads. Plus, one stock was sold and two were added to the portfolio. Read more »

Frontier Markets Exposure Added to the Model Fund Portfolio

August 2013 by James B. Cloonan
The portfolio’s new addition targets pre-emerging economies and offers more potential upside than the fund it is replacing. Read more »

Three Different Ways to Follow the Model Shadow Stock Portfolio

July 2013 by James B. Cloonan
The portfolio’s rules allow for variance in how it is followed. Plus, one new stock was added. Read more »

A New Fund and Suggested Allocation for the Model Fund Portfolio

May 2013 by James B. Cloonan
CGM Realty Fund (CGMRX) is being replaced, and a new allocation is suggested for those preferring a more conservative portfolio. Read more »

A Look at the Model Shadow Stock Portfolio’s True Risk

April 2013 by James B. Cloonan
Measured by the chance of a long-term loss, the Model Shadow Stock Portfolio is less risky than the S&P 500 index. Read more »

Equal-Weighted ETF Helps Boost Model Fund Portfolio Return

March 2013 by James B. Cloonan
The inclusion of an equal-weighted S&P 500 ETF helped the Model Fund Portfolio avoid the volatility experienced by its market-cap-weighted peers. Read more »

Higher Prices Prompt Rule Change in the Model Shadow Stock Portfolio

January 2013 by James B. Cloonan
The minimum and maximum market capitalizations have been revised upward to account for higher micro-cap stock prices. Read more »

Revised Model Fund Portfolio: Benchmark Impacted by Cap Weighting

November 2012 by James B. Cloonan
Equal-weighted funds have historically outperformed their capitalization-weighted peers, but strong performance in two tech stocks reversed the trend this year. Read more »

Adherence to Rules Helps Model Shadow Stock Portfolio's Performance

October 2012 by James B. Cloonan
Following a consistent, well-defined approach has helped the portfolio achieve an average return of 16.1% over the past 20 years. Plus, see the latest buys and sells. Read more »

Revised Model Fund Portfolio: Combining Mutual Funds and ETFs

August 2012 by James B. Cloonan
The Model Fund Portfolio has been revised to take advantage of the unique strengths that mutual funds and exchange-traded funds (ETFs) offer. Read more »

Despite Uncertainty, Model Shadow Stock Portfolio Still Positive for 2012

July 2012 by James B. Cloonan
Global and domestic uncertainty hurt returns in May, but even with the pullback, the portfolio is up 9.1% year-to-date. Read more »

Model Mutual Fund and ETF Portfolios: Choosing a Benchmark Isn't Easy

May 2012 by James B. Cloonan
A benchmark should follow the same approach as the portfolio being measured, but the most popular benchmarks measure average portfolio performance. Read more »

Model Shadow Stock Portfolio Reaches an All-Time High

April 2012 by James B. Cloonan
A rally in micro-cap stocks helped drive the portfolio’s cumulative return to an all-time high. Plus, read about the portfolio’s latest changes. Read more »

Model Mutual Fund and ETF Portfolios: Value and Small Stocks Impact Returns

March 2012 by James B. Cloonan
Value stocks and small-cap stocks have superior long-term performance but hurt the portfolios’ returns last year. Read more »

Model Shadow Stock Portfolio: Up Modestly During an Atypical Year

January 2012 by James B. Cloonan
Though the market did not enjoy its typical pre-election-year rally, the Model Shadow Stock Portfolio ended November with a year-to-date gain. Read more »

Model Mutual Fund and ETF Portfolios: Waiting for Value and Small-Cap to Improve

November 2011 by James B. Cloonan
Growth and large-cap stocks have recently outperformed value and small-cap stocks, hurting the relative performance of our model portfolios. Read more »

Record Market Volatility Affects Model Shadow Stock Portfolio

October 2011 by James B. Cloonan
High levels of volatility caused the portfolio to show a year-to-date loss at the end of August. Read about the latest changes and see James’ latest commentary. Read more »

Model Mutual Fund and ETF Portfolios: Combined Update, Different Strategies

August 2011 by James B. Cloonan
Both model portfolios are covered in a combined update. Learn how the two strategies differ, and see the new additions to the Model Mutual Fund Portfolio. Read more »

Shadow Stock Gains Limited by Pause in Small-Cap Stocks

July 2011 by James B. Cloonan
The Model Shadow Stock Portfolio rose 2% since the last update. Two holdings were replaced with new stocks. Read more »

Model ETF Portfolio Versus Benchmark: More Diversification, Similar Returns

May 2011 by James B. Cloonan
Real estate has been volatile, but it has added to the Model ETF Portfolio’s diversification without adversely affecting long-term performance. Read more »

Shadow Stock Portfolio Rewards Investors Who Stayed in Stocks

April 2011 by James B. Cloonan
The Model Shadow Stock Portfolio ended February above its pre–bear market high. Plus, see which two stocks were added to the portfolio. Read more »

Model Mutual Fund Portfolio: Revisiting Fund Selection Rules

March 2011 by James B. Cloonan
Revisiting Fund Selection Rules: Increased market volatility may require tweaking one of the fund selection rules used for this portfolio Read more »

Shadow Stock Portfolio Makes the Case for Buy and Hold

January 2011 by James B. Cloonan
The fourth-quarter rally helped to push the Shadow Stock Portfolio back up close to its pre-recession high. Plus, see the portfolio’s new additions. Read more »

New Fund Added to the Model ETF Portfolio

November 2010 by James B. Cloonan
An exchange-traded fund that invests in master limited partnerships (MLPs) has been added. Find out what the ETF is and suggestions for allocating your portfolio. Read more »

Shadow Stock Portfolio Performance Reflects Market’s Volatility

October 2010 by James B. Cloonan
The Model Shadow Stock Portfolio pared some of its gains over the summer, but still remained in positive territory year-to-date. Plus, a change was made to one of the portfolio’s sell rules. Read more »

Bear Market Bites Model Fund Portfolio and Stock-Based Mutual Funds

August 2010 by James B. Cloonan
Weakness in May and June hurt the model fund portfolio’s return. Virtually all stock-based mutual funds now have negative three-year returns. Read more »

Shadow Stock Portfolio Up 14.9% in 2010

July 2010 by James B. Cloonan
The Shadow Stock Portfolio is posting good returns despite the market’s volatility. Plus, find out why changes were made to the portfolio’s holdings. Read more »

Model ETF Portfolio: Real Estate Holdings Boost Performance

May 2010 by James B. Cloonan
The inclusion of a real estate component is helping the Model ETF Portfolio easily outperform its benchmark. Read more »

Shadow Stock Portfolio: About Even Despite High Volatility

April 2010 by James B. Cloonan
As of the end of February, the portfolio is about even year-to-date, but there has been high volatility with a weak January and a strong February. Read more »

Keeping Fund Portfolio Unchanged Despite Tough Start to 2010

March 2010 by James B. Cloonan
Though the January Indicator suggests the possibility of a down year, there is no reason to alter normal investment allocations. Read more »

Model Shadow Stock Portfolio Contests 2007 for Best Annual Return

January 2010 by James B. Cloonan
The markets and the Shadow Stock Portfolio staged big rebounds, but both remain below their 2007 highs. The New Year brings both potential reward and risks. Read more »

Model ETF Portfolio: Beats Benchmark, But Total Recovery Not Yet Complete

November 2009 by James B. Cloonan
The AAII Model ETF Portfolio is benefiting handsomely from the positive movement in the stock market this year, with a year-to-date return of 38.2%, compared to a return of 22.7% for its ETF benchmark. Read more »

Model Shadow Stock Portfolio Up 66%, as Market Move Mystifies Pundits

October 2009 by James B. Cloonan
The Model Shadow Stock Portfolio is on its way to one of its best years ever--up 66.6% through the end of August compared to 15% for the S&P 500. But the portfolio still has not recouped all of its 2008 losses. A good contrarian indicator: many analysts say the market can't possibly go higher. Read more »

After the Storm, Stability Returns to the Model Mutual Fund Portfolio

August 2009 by James B. Cloonan
The Model Mutual Fund Portfolio and the general market are up a bit year to date, and after 2008, anything positive is good. While the fund portfolio is behind the overall market year to date, it has outperformed the Vanguard Total Market benchmark over the last five years. Read more »

Rebound: Model Shadow Stock Portfolio Strongly Up, But Still Playing Catch-Up

July 2009 by James B. Cloonan
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. Read more »

Real Estate Holding Distinguishes ETF Model Portfolio From Benchmark

May 2009 by James B. Cloonan
AAII's Model ETF Portfolio is underperforming its benchmark due largely to the same holding that allowed it to beat the benchmark over other time periods--the holding in iShares Cohen & Steers Realty Majors Fund. Read more »

Model Stock Portfolio: Beating the Benchmark Is Nice, But a Loss Isn't

April 2009 by James B. Cloonan
There has been little reprieve from the downward forces on the stock market, and while the Model Portfolio has outperformed the benchmarks year-to-date, you can't pay bills with a loss. Read more »

Good-Bye and Good Riddance: 2008 Enters Stock Market History

February 2009 by James B. Cloonan
A performance review of the AAII Model Mutual Fund Portfolio shows the portfolio down 36.5%, as compared to -37.0% for the benchmark Vanguard Total Stock Market Index fund (VTSMX). Read more »

Bear Market Punishes Shadow Stocks But Qualifying Stocks Abound

January 2009 by James B. Cloonan
The stock market is punishing every sector, and it is punishing its favorite children--micro-cap and extreme value stocks--the most. Year-to-date (through November 30, 2008) the Model Shadow Stock Portfolio is down 51.1%. On the other hand, this quarter, there were over 90 candidates that qualified on our basic criteria--easily a record. Read more »

AAII Model ETF Portfolio Review and How to Take Advantage of ETFs

November 2008 by James B. Cloonan
A review of the Model ETF Portfolio, and ETF characteristics that are important to consider--particularly in comparison to traditional mutual funds. Read more »

Results Not Yet Final, But So Far, Election-Year Returns Have Yet to Appear

October 2008 by James B. Cloonan
The Model Shadow Stock Portfolio has moved ahead of the S&P 500 year-to-date, but is still behind small-cap stocks, which are down "only" 3.8% year to date. Our quarterly review includes a list of changes to the portfolio over the last quarter, a complete listing of the holdings, and the rules that govern the portfolio. Read more »

Model Fund Portfolio Update and a Look at How Various Indexes Are Weighted

August 2008 by James B. Cloonan
The Model Mutual Fund Portfolio is down for the year to date at -3.8%, but performing well considering the weak election-year market. Also, a look at the various methods for weighting stocks in indexes - and which one is best. Read more »

Shadow Stock Portfolio Update and the Disappointing Election-Year Market

July 2008 by James B. Cloonan
As of the end of May, micro-cap stocks continue to lag the market and the Model Shadow Stock Portfolio reflects that trend, with a weak three months. But even though the market appears gloomy, the bottom line is that it may be wise to stick with your long-term asset allocation or make only minimal adjustments. Read more »

ETFs Get Active: AAII's Model Portfolio and the Evolving Marketplace

May 2008 by James B. Cloonan
The AAII model portfolio of exchange-traded funds (ETFs) year-to-date is outperforming the market, but unfortunately "outperformance" only means going down less than the market. An update on the portfolio and its holdings. Read more »

Market Weakness Hits Model Shadow Stock Portfolio

April 2008 by James B. Cloonan
The market weakness continues, but it has stopped hitting small and value stocks more than the general market. The Model Shadow Stock Portfolio is now performing better than the overall market. An update on the portfolio and its holdings. Read more »

Sub-Par Performance by Market in Pre-Election Year Drama

February 2008 by James B. Cloonan
The Model Mutual Fund Portfolio did considerably better than the S&P 500 last year, coming in at 10.2%, but with disparity within the portfolio. Its superior performance was due to one fund. Read more »

2007 Proves Underwhelming for Small Caps and Value Stocks

January 2008 by James B. Cloonan
A year-end review of the AAII Model Shadow Stock Portfolio. Read more »

Model ETF Portfolio: Stay the Course Despite Headwinds

November 2007 by James B. Cloonan
The Model ETF Portfolio is lagging its benchmark due to its purposeful bias toward REITs, small-cap stocks and value stocks. Read more »

Third Year of an Election Cycle: Volatility Returns to the Market

October 2007 by James B. Cloonan
This has not been a typical pre-election year--but there are still several months to go before year-end. Despite volatile returns, the Model Shadow Stock Portfolio is up 7.5% for the year, compared to 5.1% for the S&P 500. Our quarterly review. Read more »

Model ETF Portfolio Adds Foreign Funds to the Mix

August 2007 by James B. Cloonan
A closer look at AAII's new experimental ETF portfolio, including which ETFs are in the portfolio, the selection rationale, and why foreign ETFs are being added. Read more »

Mutual Fund Portfolio Tracks Market, Stumbles and All

August 2007 by James B. Cloonan
The Mutual Fund Portfolio is doing well year-to-date, up 9.7% compared to 7.5% for the total stock market. A portfolio review. Read more »

A Choppy Ride Up for Market and Shadow Stock Portfolio

July 2007 by James B. Cloonan
The market creeps gradually upward, as does the AAII Model Shadow Stock Portfolio. If the market continues at its current pace for the balance of the year, we will have the normal "year before the election" return of around 23%. On the bearish side, inflation is still a concern; on the bullish side, there now are a number of bearish analysts. Read more »

Model Shadow Stock Portfolio Survives Market Volatility

April 2007 by James B. Cloonan
The Shadow Stock Portfolio is doing better than the market in what is either a resumption of the long-term uptrend or a short-term respite from a lengthier downtrend. Although the market trend will soon be clear, for buy-and-holders it doesn't make much difference. Read more »

Model Fund Portfolio Update: A Bullish Ride Into 2007

February 2007 by James B. Cloonan
Our Model Mutual Fund Portfolio joined the general market in having strong final months in 2006, and continues to beat the market over the longer term. A review of the Model Fund Portfolio, and an update on our newest model portfolio that focuses on exchange-traded funds. Read more »

Shadow Stock Portfolio: A Strong Year-End Finish

January 2007 by James B. Cloonan
The AAII Model Shadow Stock Portfolio had a remarkable year, up 25.0% year-to-date, compared to 14.0% for the market. We may be due for a weak year down the road, but that is best dealt with by building profits in the interim. Read more »

Shadow Stock Portfolio Up 8.5% Year-to-Date Despite Market Weakness

October 2006 by James B. Cloonan
The small capitalization and value criteria result in a portfolio that has provided significantly higher returns than the indexes. Read more »

Model Fund Portfolio Update: No Complaints for 2005

February 2006 by James B. Cloonan
Last year was not a great year for the stock market, but when a poor year still has positive returns, we can't complain too much--especially if you can outperform the market at a lower level of risk. Read more »

Model Shadow Stock Portfolio: All-in-All, A Very Good Year

January 2006 by James B. Cloonan
The AAII Model Shadow Stock Portfolio took a bit of a breather in the last three months, but through November it remains at an impressive 18.8% compared to single-digit returns for the S&P 500 and small-cap index funds. Read more »

No Summer Doldrums for the Shadow Stock Portfolio

October 2005 by James B. Cloonan
The Model Shadow Stock Portfolio has found enough fuel to jet through the summer doldrums of 2005, rocketing to a 19.1% return over the quarter, while year to date it is up 17.8% compared to 5.4% for the Vanguard Small Cap Index fund. Our quarterly review includes a list of changes to the portfolio over the last quarter, as well as a complete listing of the holdings. Read more »

Model Fund Portfolio Update: 2005 Mid-Year Review

August 2005 by James B. Cloonan
The Model Mutual Fund Portfolio is slightly ahead of the S&P 500 for the first half of this year, but significantly ahead over the last 12 months. A mid-year look at the portfolio, how it has fared, and what changes have been made. Read more »

Shadow Stock Portfolio Still Leads as Market Runs Out of Gas

July 2005 by James B. Cloonan
While the Model Shadow Stock Portfolio is starting to run on fumes alone, it still leads the market. A mid-year look at the portfolio--how it has fared, and what changes have been made. Read more »

Why Well-Designed Portfolios Don't Depend on Cap Size and Style Categories

February 2004 by James B. Cloonan
A look at the Individual Investor's Mutual Fund Portfolio--how it performed and its investment characteristics. Read more »

What's UP? AAII's Shadow Stock Portfolio

January 2004 by James B. Cloonan
A strong close to last year bodes well for 2004: A performance and composition update on the AAII Shadow Stock Portfolio. Read more »

Focus on the Individual Investor's Shadow Stock Portfolio

November 2003 by James B. Cloonan
Presenting a model stock portfolio that can be the beginning of the selection process, but not all of it. There are many ways the strategy can be implemented without everyone buying the exact same stocks. Read more »

Shadow Stock Rookies: Firms That Are New to the 1996 Listing

February 1996 by John Bajkowski
Our annual screen for Shadow stocks turned up 125 companies not included in last year's listing. Read more »

Out of the Wall Street Spotlight: The 1996 Shadow Stocks

February 1996 by John Bajkowski
AAII's annual listing of smaller-capitalization stocks that are out of the glare of research analysts and insititutional investors. Read more »