To Beat the Market, Invest Differently Than the Market

Revisiting the “What Works on Wall Street” Screen

James O’Shaughnessy helps to find strategies that have the highest “base rate” with the belief that a composite strategy can help achieve both higher and more consistent performance than single-variable strategies.

To Beat the Market, Invest Differently Than the Market

AAII Journal editor Charles Rotblut sits down with money manager Jim O’Shaughnessy to discuss how decisions based on less than five years of performance returns are mostly based on noise. The two talk about the fact that, while many strategies look good over shorter periods, they tend to fare much worse over longer periods.

James O’Shaughnessy

Stock Market Volatility

It’s often said that the market rewards long-term investors. This AAII InvestoGraphic includes four charts of large-company stock returns that support this claim. As they show, the longer your investing time horizon is, the less volatile and the less risky the stock market appears to be.

Why Technical Analysis Matters

Chart watching is a key element of technical analysis and can help investors make better decisions. The post outlines a five-step process to help you take a stock from an idea to the decision to buy or sell.

Our Member Question for this week is:

How much do you use technical analysis as part of your overall investment analysis strategy?

Vote to answer this week’s Special Question: If you don’t use technical analysis, why don’t you?

Last Week’s Results:

When talking with friends, would you rather share how much you weigh or how much money you have saved?

Weight: 85%

Savings: 15%

Poll results are as of 9 a.m. (Central) on Monday. 1,466 respondents.
 

AAII Survey: It’s More Uncomfortable Talking About Money Than Weight

Many of us try to avoid uncomfortable conversations. But faced with the choice of two uncomfortable topics, which would you choose? That is the question we posed to our readers last week: Would you rather talk about your weight with friends or how much you have saved? Our weekly special question then asked our readers which investment text has had the greatest impact on their investing philosophy.

AAII Ebook: Stock Investing Strategies

Many investors find the prospect of investing in individual stocks too time consuming or complicated. This ebook, which is available exclusively to AAII members, was written to help our members get started down the path to investing in individual stocks. The book provides a general outline for analyzing stocks and walks you through the process as it is practically applied to specific types of investment approaches.