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AAII: The American Association of Individual Investors

The AAII Mission

The American Association of Individual Investors is an independent nonprofit corporation formed in 1978 for the purpose of assisting individuals in becoming effective managers of their own assets through programs of education, information and research.

Core Beliefs of Investing   ·   Our Story   ·   Our Team

The AAII's Core Beliefs of Investing

With the right education and information, most individual investors are fully capable of becoming effective managers of their own assets.

No special talent is required to become a successful investor, only a bit of dedication and access to effective investment education that provides a framework for intelligent investment decisions.

You, the individual investor, have a distinct set of advantages that can help you outpace the market and most brokers, investment banks and institutional investors. You can move quickly (or slowly), invest in a wider range of opportunities and can tailor your portfolio more effectively. If you take investing seriously, you can do better than professional money managers. After all, no one takes your money more seriously than yourself.

By following the guidelines below, you can improve the likelihood of achieving good investment returns:

Large institutions cannot effectively invest in the stocks of smaller companies or in less liquid issues, and these are the stocks that have performed best over the long run.

Consider your time horizon when making investments. What is best for the short term may not be best for the long term.

Don't buy common stocks with money you feel you will need in less than five years. Markets go up and down and you don't want to be forced to sell in a down market.

Don't invest all of your wealth in the stock market. Unexpected events may require that you dip into your savings. Taking money out of the stock market at the wrong time can seriously impair your long-term strategy. Maintaining reserves in cash, cash equivalents (e.g., CDs) and short-term bonds can help you withstand most bear markets.

Maintain a diversified portfolio, with no fewer than 10 stocks in it. You are better off with 10 aggressive growth stocks than one blue-chip stock. If you have less than $15,000, diversify through mutual funds or exchange-traded funds (ETFs). If you don't have a diversified portfolio, you are either throwing away return or taking on risk that can be avoided.

Consider transaction costs when selecting your investment approach. Frequently buying and selling is costly and detrimental to your returns.

No single method of evaluating investment opportunities has proven to be successful all of the time.

Don't move a substantial portion of your wealth into or out of the market at one time. Ease in, ease out.

Adjust your portfolio periodically to ensure your allocations do not drift too far off target and no single stock accounts for too large a portion of your overall portfolio.

If you find yourself nervous, don't make any portfolio decisions. Rather, take a break and then revisit your portfolio. The times you may most feel like getting out of stocks are often the best times to be buying.

Planning is the secret to success, and starting early is key.

The AAII Story: An Introduction

Dr. James B. Cloonan felt the need for an independent, nonprofit association that would help individuals control their own destinies. So in 1978, he launched the American Association of Individual Investors (AAII) with the mission of assisting individuals in becoming effective managers of their own assets through programs of education, information and research. The best investment advice for small investors is to do it yourself. Dr. Cloonan understood that you are going to do a better job of watching your own money than someone else.

James B. Cloonan
Founder &
Investment Educator

Even then, many pundits expressed doubts that individuals stood any chance in succeeding, with big institutions controlling the market. However, AAII was founded with the belief that with the right education and information, most individual investors are fully capable of becoming effective managers of their own assets. The investment environment was very different when AAII began over 35 years ago. Investment information did not flow easily. Research involved a trip to the library to study a company's "tear sheet" and sending a letter to a company to request an annual report. Investor education for the individual investor was very limited. Fixed-brokerage commissions had just recently been stricken, freeing "mayday" brokers to compete on price and spurring the era of active individual investors.

Nowadays, investors are inundated with greater investment options as well as the faster flow of more data, often leading to paralysis. Today, more than ever, investors need basic education on developing a sound framework to manage their investments and build their wealth.

AAII has educated over two million investors and continues to help them develop their "investment philosophy" based on individual objectives. This is accomplished by illustrating how to evaluate different investment vehicles and opportunities, showing how to obtain necessary information for effective decision making, and even informing investors how various investments relate to each other within the economic climate.

The American Association of Individual Investors was created with the clear understanding that individual investors have unique investment needs and possess a number of advantages over institutions. Dr. Cloonan continues to believe that if you take investing seriously, you can do better than professional money managers. It is important for individual investors to play to their strengths, perform appropriate research, take a long-term perspective and not get caught up in the emotions of the market. The individual investor has a distinct advantage over the institution in terms of flexibility. They can move quickly, have wider range of opportunities and can tailor their portfolio more effectively. The size of institutions prevents them from investing a large proportion of the stocks available to the individual investor. Individual investors have only themselves to answer to. It must be noted that these are potential advantages for the individual. Many investors use their freedom to engage in investment activities that are not sound. Since its inception, AAII has been providing its members with education, information and research so they can realize their full potential and not get ensnared by Wall Street's traps.

The AAII Story: A Timeline

We Are AAII.

Assisting the unique needs of individual investors like you for over 35 years.

Wayne A. Thorp, CFA
VP, Sr. Financial Analyst

Jean Henrich
Managing Editor

John Bajkowski
President, CEO

Richelle Marvé
Member Services

James B. Cloonan
Founder, Chairman

Nick Powell
IT Director

Pete Nguyen
Web Manager

Renee Harper
Member Services

Arlene Zamudio
Local Chapter Liaison

Adam Pfeffer
VP, Director of Marketing

Donna Carone

Linda Wu
Web Developer

Gianni Calvopina
Member Services

Annie Prada
Graphic Designer

Angel Scott
Member Services

Harry Madorin
Sr. VP of Operations

Iris Serrano
Data Entry

Greg McClellan
Finance Intern

Trace Shutter
Accounting Associate

Trishell Harper
Member Services

Robert Perez
Web Developer

Mohan Perera
Web Devloper

Matt Bajkowski
Finance Intern

Anine Sus
Editorial Assistant

Ryan Reeh
Assistant Editor/
Programs Manager

Jennifer Perkins

Jonathan Uhlmann
Web Application Developer Intern

Robert Baran
Finance Intern

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