This Week: Different Approaches to Asset Allocation

This week’s AAII Weekly Digest highlights these "must-read" AAII articles:

The Level3 Approach: Getting Exposure to Segments That Have Performed Well

AAII’s Level3 Passive Portfolio looks to improve upon the long-term return of the market-cap-weighted S&P 500 using index funds of smaller companies, value-oriented stocks and real estate.

To Beat the Market, Invest Differently Than the Market

James O’Shaughnessy

Decisions based on less than five years of performance returns are mostly based on noise. Many strategies look good over shorter periods, but fare much worse over longer periods. Money manager James O’Shaughnessy discusses his view that, in order to beat the market, an investor needs a portfolio that looks very different from the market.

Rebalancing Update: The Market’s Volatility Eliminated the Need to Adjust Allocations

The volatility incurred in 2018 was high enough to bring the equity allocations back toward their targeted range, preventing the need for rebalancing.

For Long-Term Investors, the Focus Should Be on Risk

While stocks have been shown to outperform other assets in the long term, history shows that they can also exhibit extreme volatility in the short term. Therefore, when determining the optimal allocation for your own portfolio, it’s best to focus first on how much you are able and willing to lose.

Our Member Question for this week is:

Is/was your college major related to your career?

Vote to answer this week’s Special Question: If you ended up in a career you believe is considerably different from what you studied in college, what led you down that path?

Last Week’s Results:

Would you be willing to share more personal data—location data, lifestyle information, etc.—with financial institutions in exchange for lower pricing on products and services or other benefits?

No: 76%

Not sure: 14%

Yes: 9%

Poll results are as of 9 a.m. (Central) on Monday. 1,723 respondents.
 

AAII Survey: Lower Fees, Other Benefits Not Enough to Entice Investors to Provide More Personal Information

More and more, companies collect personal data on consumers to craft marketing messages, develop new products or even sell to other firms. But how much personal information are you willing to provide? What if you were able to get reduced fees or better rates from financial institutions in exchange for more personal information? Last week’s reader question asked just that. To follow up, our latest special question asked readers what steps they take to protect their personal data.

AAII e-book: Portfolio Building

“Easier said than done” is a common saying that applies well to developing an overall strategy for your investment portfolio. The basic concepts are relatively easy, but they become more complex and less clear-cut when it comes to applying them to real-world situations. This e-book, available exclusively to AAII members, is designed to bridge the gap between theory and practice.

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an effective manager of your own assets.