THE AAII JOURNAL AUGUST 2020 ISSUE
COVER ARTICLE
Are Virtual-Only Annual Meetings Virtuous?
A look at the advantages and disadvantages of virtual shareholder meetings through the eyes of a portfolio manager. Plus, a scoring system you can use to measure whether a firm is promoting shareholder interests.
Features
in AAII InvestoGraphic,PRISM Wealth-Building Process,Risk,Investing Basics
Determining the Appropriate Level of Risk for You
To help you identify your tolerance for risk, we’ve developed this worksheet as part of The AAII Way, a process for creating a comprehensive plan that can be your investing guide.
in Trading Strategies,Exchange-Traded Funds
Leveraged ETFs: Don’t Get Wiped Out by the Tail
Think carefully before buying a leveraged investment product that might seem highly attractive based on historical performance. Two key negatives are volatility drag and tail risk.
in First Cut Mutual Funds,Risk
Lower-Risk, Higher-Yielding Equity Funds
Mutual fund investors seeking higher income but wanting to avoid a higher chance of losing principal can strike a balance by looking at two fund characteristics: the category risk index and the yield.
in Quarterly ETF Update,Value Investing,Exchange-Traded Funds
Second-Quarter Reversal Leads to Big Gains for ETFs
Out of the nearly 2,300 exchange-traded funds with returns for the full April–June period, all but 199 rose in value.
in AAII Stock Ideas,Value Investing
Shareholder Yield Works on Wall Street as a Value Measure
Faber’s shareholder yield approach has the potential benefit of investing in classic value companies that are also buying back their stock and reducing their debt.
in First Cut Stocks,Value Investing
Stocks Meeting the O’Shaughnessy Multi-Factor Approach
AAII’s O’Shaughnessy-inspired value composite consists of the price-to-free-cash-flow ratio, price-earnings ratio, price-to-sales ratio, enterprise-value-to-EBITDA ratio, shareholder yield and price-to-book-value ratio.
in Mutual Funds,Quarterly Mutual Fund Update
Strong Motions in Quarter-to-Quarter Fund Performance
None of the funds featured as top and bottom performers for the second quarter recorded negative returns; whereas in the first quarter, the only funds with positive returns were bond funds.
in AAII How-To,Value Investing
The Benefits of Combining Value & Momentum
Research provides evidence that combining value and momentum strategies offers investors the opportunity to achieve higher rates of return with lower risk than would be achieved with either strategy individually.
in Exchange-Traded Funds
The Individual Investor’s Guide to Exchange-Traded Funds 2020
Monthly updates and grades for returns, risk and expense ratio top the improvements to our ETF guide this year.
in Investor Professor,Financial Statements
Times Interest Earned Ratio: Measuring a Firm’s Ability to Meet Its Obligations
One of the lesser-known measures that helps determine the financial strength of a company is the interest coverage ratio.
Notes & Opinions
in Editor's Note
Companies Should Be Good Stewards of Investor Assets
While bankruptcies due to the coronavirus pandemic have made the headlines, what received less attention were the actions many companies took that were unfriendly to their shareholders.
in Dispatches,Dividends
Coronavirus Led to Dividend Cuts Among Highly Leveraged and Low Profitability Companies
The sharp and sudden shock to economic prospects and financial markets caused by the coronavirus pandemic led certain companies to change their existing dividend policies.
in Dispatches
How Financial Literacy Affects Decision-Making
A study found that discovered that investors with a high level of financial literacy tend to take too many risks, overborrow, and hold naive financial attitudes.
in Dispatches
Supreme Court Sets Limits on SEC’s Ability to Seek Ill-Gotten Gains Relief
The U.S. Supreme Court ruled 8–1 that the SEC may continue to lawfully obtain disgorgement awards as “equitable relief” for fraudulent activities, though the award must be limited to wrongdoers’ net profits.
in Dispatches
Wealthier Investors Are Better at Processing News Into Trading Decisions
A study found that individual investors’ performance differs widely based on their wealth and demographics.
in Letters to the Editor
Letters
Members converse online about protecting yourself on the internet, portfolio returns as you age, mismanaged pension plans and The AAII Way worksheets for creating an investing plan. Plus, July authors respond to queries on different ways to pursue dividend growers and the major periods of price instability in the U.S.
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.
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