THE AAII JOURNAL SEPTEMBER 2020 ISSUE

COVER ARTICLE

Screening on Faber’s Unique Approach to Yield Investing

Filtering for stocks with positive yields for dividends and buybacks represents a reasonable strategy to identify firms that are focused on creating value for shareholders.

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Features

in AAII InvestoGraphic,PRISM Wealth-Building Process,AAII Asset Allocation Models,Asset Allocation

The Changes Made to AAII's Asset Allocation Models

By Charles Rotblut

The AAII Asset Allocation Models serve as guidelines individual investors can use to construct appropriate portfolios. We updated two of the models.

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in First Cut Stocks

Finding Future Winners Among Glamour Stocks

By John Bajkowski

Using a scoring system to help separate the winners from the losers among stocks trading with high price-to-book-value ratios.

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in Portfolio Strategies,Asset Allocation

The Four Asset Classes With Great Long-Term Performance

By Paul Merriman

If you apply the lessons of the past 90 years, it’s reasonable to expect favorable returns from following simple strategies that combine a few key asset classes.

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in Portfolio Strategies,Inflation

Inflation: The Dormant Dragon

By Craig Israelsen

If you believe that inflation will rear its ugly head again, it would be prudent to build a portfolio that has demonstrated an ability to defend itself against inflation.

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in The Big Question,Interest Rates

Many Individual Investors Are Relying on Equities for Portfolio Income

By Charles Rotblut, Ryan Reeh, Will Pfeffer

A look at attitudes of AAII members to the historic low interest rates and the Federal Reserve’s intention to keep rates low.

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in Mutual Funds,AAII How-To

Fund Openings and Closings: Why They Happen and Why They Matter

By Wayne A. Thorp

Closing to investors is one way for a mutual fund to slow the inflow of money that the fund managers must invest. Members can check on fund closings and reopenings easily at AAII.com.

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in First Cut Mutual Funds,Mutual Funds

The Lowest-Cost Domestic Equity Mutual Funds

By Charles Rotblut

Low expense ratios provide a performance advantage by allowing more of shareholders’ money to stay invested and thereby grow.

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in First Cut ETFs,Exchange-Traded Funds

The Lowest-Cost Domestic Equity ETFs

By Charles Rotblut

Some ETFs have extremely low expense ratios and a lower cost gives a fund a relative advantage.

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in Level3 Passive Portfolio,Exchange-Traded Funds

Level3 Passive Portfolio Relies on Smart-Beta ETFs in Challenging Environment

By John Bajkowski

Smart-beta funds vary the weighting of stocks held using factors such as valuation or size for performance that diverges from that of traditional market-cap-weighted index funds.

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in AAII Model Portfolios,Small Cap Value Investing

The Model Shadow Stock Portfolio’s Turnover and Holding Periods

By John Bajkowski

Turnover in the Model Shadow Stock Portfolio was highest during the challenging year of 2007 and may increase later this year.

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Notes & Opinions

in Editor's Note,Asset Allocation

Simple Guidelines Can Help You Master Portfolio Allocation

By Charles Rotblut

Allocation strategies don’t work if you can’t consistently adhere to them. Where most investors fail is simply not getting the basic mix of stocks, bonds and cash right over the long term.

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in Dispatches,Brokerages,Risk

Broker Notifications Push Investors to Higher Risk

By Matthew Bajkowski

investors who receive alerts from brokers on their investments are induced to take higher risk, according to a study by the Center for Tax and Accounting Research.

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in Dispatches

Firms With High Passive Ownership Are More Likely to Make Suspect Repurchases

By AAII Staff

Companies with a lot of passive fund ownership are more likely to repurchase shares in order to boost their short-term stock price, subsequently harming performance over the long haul.

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in Dispatches

How Retirement Affects the Health of Manual Labor Workers

By Anine Sus

People whose jobs require more manual labor develop health deficits faster both before and after retirement than those whose jobs do not require manual labor.

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in Dispatches

Making Fee and Performance Information Visible Changes How 401(k)s Are Invested

By AAII Staff

Participants in 401(k) plans become more attentive to expense ratios and their portfolio allocations after fee and performance statements were provided directly to them.

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in Letters to the Editor

Letters

By AAII Staff

Members converse about recent articles on leveraged ETFs, virtual shareholder meetings, long-term care and whether investing ability changes with age.

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Expand to Read More

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.