THE AAII JOURNAL MAY 2012 ISSUE

COVER ARTICLE

Notes on the Current State of the Muni Bond Market

Muni bond yields are reasonably attractive relative to Treasury yields, and fears about a rise in defaults remain totally misplaced.

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COVER ARTICLE

The Diversity of Municipal Bonds and What You Need to Know About Risks

By Robert Doty

The bond market is split between traditional secure securities and those that are riskier, such as bonds tied to private profit-making or nonprofit borrowers.

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Features

in Financial Planning

Consumer Financial Protection in the Current Economy

By Paula Hogan

Academics and policymakers discuss how to make financial products more effective for consumers and their risks more easily understood.

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in AAII Model Portfolios

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

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.

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in Trading Strategies

Money From Momentum: Positive Feedback Can Drive Returns

By Shelly X. Liang

Chasing performance can be a rational response by investors, since they are seeking profits, but there are limitations to following such strategies.

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in AAII Stock Ideas,Growth Investing

Screening for Stocks With Strong Secular Growth

By John Bajkowski

Secular growth companies increase earnings in both good and bad economic cycles. This screen is designed to identify such companies.

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Investor looking at the balance sheet’s assets, liabilities and equity sections

in Financial Statements

The Balance Sheet: Assets, Debts and Equity

By Joe Lan

In this article, we showcase an example of a balance sheet and give you a clear understanding of the assets, liabilities and equity sections of this company report.

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in Computerized Investing,Earnings

Tracking the Analysts

By Wayne A. Thorp, John Bajkowski

Tracking earnings expectations, and their changes, is an important and a potentially rewarding strategy for stock investors.

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Notes & Opinions

in Editor's Note

Editor's Note

By Charles Rotblut

A look at what's inside the May 2012 AAII Journal.

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in Dispatches,Alternative Investments

Be Wary of Crowd Funding Start-Ups

Later this year, or early next year, you will have the chance to buy shares in privately held companies through a process known as crowd funding. If an offering seems interesting, tread carefully, do as much research as you can and only commit money you can afford to lose.

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in Dispatches

Americans Worried About Retirement Savings, But Saving More

The proportion of Americans who are worried about not having saved enough money for retirement is increasing, according to The 2012 Scottrade American Retirement Study. At the same time, more Americans are seeking ways to save more money.

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in Dispatches

Are Financial Advisers Encouraging Bad Behavior?

Not only do many financial advisers fail to discourage behavioral finance errors by investors, but many advisers also reinforce behaviors that are in their own best interest, according to a new working paper published by the National Bureau of Economic Research.

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in Dispatches

From the Bookshelf

Comments on new investing books.

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in Letters to the Editor

Letters

By AAII Staff

Member questions and comments on recent AAII Journal articles.

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The AAII Journal, a leading investment publication, provides readers with a continuing stream of insights and ideas that focus on how you can improve your investment results. Unlike many investment magazines, ours is completely unbiased, educational and contains no advertising.

AAII has published this prestigious financial journal every month for more than 40 years. Members receive it for free and have access to thousands of evergreen articles online so they can reference information and strategies for previous market situations with a few clicks of the mouse.

Our stock journal helps individual investors manage their portfolios, build sound investment strategies and navigate all types of financial conditions. Articles range from optimizing target-date fund portfolios to retirement account withdrawal strategies and analysis on robo-advisor performance.

The magazine also has recurring features our members find invaluable. Every quarter, we dissect our model stock portfolio and provide updates to its holdings and performance. This analysis helps individual investors manage small-cap value investments.

We also offer an annual tax guide in our financial magazine. This detailed investment magazine issue covers many details that individual investors need to consider when filing their taxes. It keeps readers updated on any recent changes to tax laws and provisions and provides a handy guide to tax implications of personal investments to cut through any tax filing confusion.

Another annual feature covers ETFs (exchange-traded funds) and mutual funds. This edition helps individual investors understand what to look for when investing in funds. Online, we accompany those articles with sortable tables so that members have an interactive component to their investment research. This helps individual investors plan their portfolios and invest with confidence.

Other regular features in the AAII Journal include financial planning, stock ideas and investor professor. Financial planning articles walk investors through the process and difficulties of crafting strategies for creating wealth regardless of age. They also cover difficult situations, such as estate planning, and helpful advice for getting kids and grandchildren interested in investing.

Stock ideas, as the name implies, give readers a peek at new screens and the stocks that pass them. This part of our investing magazine helps readers identify new opportunities in the markets, flagged by a mix of quantitative and qualitative analysis. Because we all, as investors, need ideas, this remains one of the most popular categories.

Investor professor helps readers invest with knowledge and confidence. It deals with contingencies, such as “What happens to your investment if a company goes bankrupt?” and gives actionable advice on what resources you should use when considering a new broker. Our readers enjoy this section because of its practicality and enduring tips.

Frequent internal contributors include president John Bajkowski; AAII Journal editor and vice president Charles Rotblut; Stock Superstars Report lead analyst Wayne A. Thorp; and Dividend Investing editor Derek Hageman. Together, these internal contributors have nearly a century of market wisdom and research, which they share with clear and concise prose to help individual investors improve their knowledge and portfolios.

The AAII Journal also includes frequent guest contributions from the financial and economic space. Articles from outside industry experts differentiate our financial magazine from others and provide additional points of view for our readers. Previous guest authors have included John C. Bogle, founder of Vanguard; Jay Clayton, chairman of the U.S. Securities and Exchange Commission; Charles Schwab; and Nobel laureate and Yale professor Robert Shiller.

We hope you’ll enjoy our articles and, if you’re not a member, consider joining the Association so you can get our prestigious magazine sent to your door every month.