THE AAII JOURNAL JULY 2017 ISSUE

The first part of a four-part series on the relative strength index covers the basics: RSI’s origin, its components, how to construct and plot it, and its traditional interpretations.

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in Portfolio Strategies

Allocating to Manage Risk: A Case Study

By Charles Rotblut

The downside risk a retired couple’s portfolio faces is examined, along with a strategy to reduce the damage of turbulent market conditions.

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in Investor Professor,Alternative Investments

Beware of SAFE Offerings From Crowdfunded Companies

By Lori J. Schock

Simple agreements for future equity may sound enticing, but they are not an actual equity stake in the company.

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in Financial Planning,Estate Planning

Inherited IRA Rules for Spouses, Heirs and Trusts

By Charles Rotblut

Inherited IRAs differ from traditional and Roth IRAs, with the rules dependent on who the beneficiary is. What you need to know.

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in Trading Strategies,Exchange-Traded Funds

Leveraged ETFs: Multiplying by the Unknown

By William J. Trainor

The returns realized by an investor will be below what these ETFs’ names suggest due to the decay in realized leverage over time.

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in Small Cap Value Investing,AAII Model Portfolios

Model Shadow Stock Portfolio: Loosened Buy Rules on New Addition

By James B. Cloonan

Due to a shortage of qualifying stocks, a slightly higher price-to-book ratio can be used for purchasing the portfolio’s newest stock.

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in Value Investing,Stock Strategies

Three Value-Investing Benchmarks

By Gary Smith

The valuation models espoused by John Burr Williams, Robert Shiller and John Bogle can be used to assess the market’s likelihood of gains.

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Notes & Opinions

in Editor's Note

Editor's Note

By Charles Rotblut

Using leverage to realize higher returns is a risky practice. However, not all leverage is inherently bad. In the world of investing, leverage can boost returns.

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in Dispatches

A Two-Prong Approach to Funding Retirement

One way to handle the uncertainty of longevity is to divide retirement in two phases. The first phase would last approximately 20 years, from age 65 to 85. The second phase would last from age 85 until the death.

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in Dispatches

Having Access to Cash Increases Life Satisfaction

While cash is a drag on investment returns, especially in a low interest rate environment, there may be a reason to allocate as much as you think is necessary: happiness.

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in Dispatches

The Temptation to Trade Reduces Returns

Participants in a simulated market environment displayed behavior indicative of market timing, even when there was an incentive not to do so.

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in Dispatches

Using Financial Data to Detect Dementia

One of the earliest signs of cognitive impairment, including dementia, is the inability to manage personal finances.

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in Letters to the Editor

Letters

By AAII Staff

Members comment on former hedge fund manager Walter Weil's contrarian approach and value investor Paul Merriman's blended approach. Plus, member thoughts about Roth IRA rollovers and the effectiveness of using the accrual ratio to judge earnings.

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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.