The IRS is asking millions of taxpayers in 22 states including California, Colorado and Florida who received tax rebates last year to hold off on filing their taxes.
The reason: The agency said it is seeking to clarify whether those tax rebates and special refunds are considered taxable income. “We expect to provide additional clarity for as many states and taxpayers as possible next week,” the IRS said on February 3. As of February 10, the IRS hadn’t yet provided clarification.
About 16 million California residents received “middle-class tax refund” checks of $350 per eligible taxpayer last year, part of a relief package designed by the state to help residents cope with soaring inflation at a time when the state had a budget surplus.
At least 22 states authorized tax rebates last year as their coffers were buoyed by strong economic growth and federal pandemic aid, according to the Tax Foundation. The following states sent rebate checks to at least some of their taxpayers last year, the Tax Foundation said:
Alaska
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Maine
Massachusetts
Minnesota
New Jersey
New Mexico
New York
Oregon
Rhode Island
South Carolina
Virginia
But those one-time windfalls are now throwing a wrench into tax season for millions of Americans, many of whom count on getting timely tax refunds to pay down debt, make a purchase or get on top of bills. Last year, the average tax refund (for the 2021 tax year) was almost $3,200, a 14% jump from the prior year, according to IRS data — an amount that’s bigger than the typical worker’s paycheck.
“This uncertainty is unfair to taxpayers,” wrote Jared Walczak, vice president of state projects at the Tax Foundation, a tax-focused think tank, in a blog post. “Tax experts have long known that the taxability of state rebate payments would be an issue, but the IRS remained silent until February 3rd, at which point it basically said we’ll get back to you soon.”
File and amend, or file and get penalized?
Taxpayers in these states who have already filed returns and who report the rebates as taxable may need to file amended returns to exclude the money if the IRS decides they aren’t taxable, according to the National Taxpayer Advocate, the watchdog arm of the IRS.
Conversely, taxpayers who already filed their returns and excluded the payments could be subject to potential penalties, tax and interest if the IRS decides the rebates are taxable.
“[T]he IRS missed the boat” by failing to provide timely guidance on this issue, wrote National Taxpayer Advocate Erin Collins in a Thursday blog post.
She added, “Giving taxpayers a choice between waiting to file their returns and receive their refunds or filing returns now that the IRS may later determine to be inaccurate is not acceptable.”
Adding to the confusion for taxpayers is that the federal government’s tax rebates — sent in the form of three stimulus checks during the pandemic — were not considered taxable income by the IRS.
Some taxpayers took to social media to express their frustration at the IRS guidance that they should delay filing their tax returns. The agency started accepting returns for this year’s tax season on Jan. 23.
“So I tried to sit down this morning for a fun game of Do Your Taxes, but turns out the IRS hasn’t decided if California’s Middle Class Tax Relief payments are taxable or not…,” one taxpayer wrote on Twitter.
Income or not?
The IRS issued the statement after Rep. Kevin Kiley, a Republican from California, wrote to the tax agency to say that his office had been contacted by “numerous” constituents asking for help on the issue.
“Many of the 16 million residents of California who received the refund are unable to file a 2022 tax return because they do not have clear guidance as to whether to include this payment” as taxable income, he wrote in the February 2 letter.
Adding to the confusion is that some states seem to be indicating that the rebates count as taxable income, according to Collins, the National Taxpayer Advocate. For instance, California’s Franchise Tax Board said it is sending tax forms to all recipients of the rebate, noting that the “payment may be considered federal income.”
Yet at the same time, many tax preparers “have concluded that some state payments are not taxable and have programmed their software so that these payments are not reported,” Collins added.
On Friday, the IRS advised, “[T]he best course of action is to wait for additional clarification on state payments rather than calling the IRS.”
It added, “We also do not recommend amending a previously filed 2022 return.” Amended returns have been caught up in the IRS’ backlog, leading to processing delays.
In today’s world of economic uncertainty, managing your finances can seem like a daunting task. Shifts in the market and inflation are making it harder to make ends meet for millions of people. Heck, even buying eggs has become financially complicated this year.
Being in charge of a business during this time takes a team of people to be successful. Over the course of every entrepreneur’s lifetime, they hire the following: an accountant, an attorney, insurance agents (both personal and business), a banker, an investment adviser, etc. The list goes on. What’s more, finding the right people that you can trust is a job all its own.
As a result, many entrepreneurs may feel as though they’re stuck in the middle facilitating communication between parties. A family office is an interesting solution to this problem, and it’s no longer reserved for the top 1%. You can read about the different areas that can affect family wealth in a variety of finance publications.
Recently, I spoke with Jim Dew, CEO of Dew Wealth Management, about the benefits of a virtual family office for entrepreneurs. I was extremely impressed by how having the right team and structure can yield great financial results. And, it makes sense; The rich get richer because they use specific strategies to grow and protect their wealth. Here’s what entrepreneurs need to understand about utilizing a family office for wealth management:
What is a Family Office?
Billionaires have had a century-long secret advantage when it comes to building and sustaining wealth. It’s called the family office. Before deciding if a family office is right for you, it’s necessary to fully understand what it is. This structure is what virtually everyone in the “billionaire’s club” creates when they get seriously wealthy.
To build a family office, a billionaire will hire all the necessary professionals as full-time employees. Specifically, these new hires will work for that one billionaire and his or her family. Think along the lines of tax, legal, insurance, and investment experts– along with attorneys and accountants. Needless to say, a traditional family office is expensive to build and run.
However, it’s worth it when you’re managing a financial empire. That’s why Bill Gates, Oprah Winfrey, Jeff Bezos, and Sarah Blakely all have a family office. For everyday entrepreneurs, this structure is still beneficial–but likely unreasonable– from a financial perspective. Despite the cost, a modified virtual structure is likely possible to attain.
Connections Every Family Needs
To better understand how a family office operates, we’ll review a few key things. This includes each position typically hired, how they communicate, and how they benefit each other. It’s worth noting that positions and components can be adapted to your business and lifestyle needs. For instance, you may find that you don’t need a full-time CFO, and instead could have a coordinated effort on financial analysis by using an outsourced part-time CFO in cooperation with an accountant and bookkeeper. You might also find an estate attorney who specializes in asset protection structures.
Accountants
As a business owner, you likely already engage with at least one trusted accountant. If not, it would be wise to consider doing so. This trusted accountant is a tax expert who keeps track of your bookkeeping–or works with your bookkeeper– to make sure you stay in the black. For example, they might audit your books, prepare payroll tax reports, or simplify all the financial rigmarole and minutia that come with running a business. When establishing a family wealth office, it’s important to have an accountant who can communicate your financial standings and work in your interest to reach financial goals.
Investment Advisers
Investing is a valuable way to grow your wealth. So, it’s a good idea to utilize investment advisers who will be able to work with you and your accountants and ensure that you’ll see positive returns. A family office may be responsible for investment portfolio management, private equity deals, hedge fund investments, and/or venture capital investments. If you’re interested in commercial real estate, they may also handle real estate purchases, sales, and property management. Like everyone else on your team, these professionals are available to help grow and protect your wealth.
Tax Planners
Many accountants are tax historians rather than tax planners. For instance, a tax historian might all the correct forms at the right time, but is looking in the rear view mirror. What you need in your family office is a tax planner. A tax planner proactively looks forward and presents you with ideas on how you can legally save the most possible money in taxes.
This tax expert could potentially be your accountant–or they could be an expert that works with your accountant– that can ideate strategies to help you pay the least amount of taxes legally possible. No matter the case, they are able to help when it comes to tax matters. For example, they might even find tax savings that you can receive by amending past returns. It’s like finding that $20 bill in your pants pocket that you didn’t know you had! Above all, professional tax consultants should prioritize knowing the tricks of the trade and staying current with changing state and federal tax laws.
Insurance Experts
Everyone needs insurance to protect their belongings. But, as you grow your wealth, this becomes even more important. Insurance transfers risk, therefore it is the key to a defensive financial strategy. Additionally, there are tricks of the trade that insurance experts know, which can benefit you and your family in the long run.
Insurance is your first line of defense when it comes to asset protection. Making sure that you have the right coverage and that trusts or entities are listed as additional insureds are some of the details that entrepreneurs often miss. Moreover, entrepreneurs need business insurance like EPLI (employee practices liability insurance) and cybersecurity (for things like ransom attacks). Having good experts for personal and business coverage are absolutely essential in a family office structure.
Attorneys
Another aspect of protecting your wealth is to avoid lawsuits that could take it away. Having an attorney on your side means having someone to advise and represent you or your family. Whether it be in court, before government agencies, or in private legal matters, they’re able to act on your–or your family’s– behalf. They can interpret laws, rulings, and regulations for individuals and businesses, which becomes more important as your wealth grows.
It’s also crucial to have a trusted attorney who’s able to help with estate planning. Every business owner needs to have an estate plan, because death is inevitable. If you don’t have an estate plan already, it is highly recommended to prioritize having one. While many people understand that an estate plan allows you to name the people or organizations you want to receive your belongings after you die, it’s much more than that.
You should also factor in things like instructions for your care and financial affairs if you become incapacitated. Essentially, this means designating a power of attorney and funding assets into a living trust. You’ll want to update beneficiary designations and name a guardian for your minor children’s care and inheritance. While it’s important to think of your family and your own well being during estate planning, a major asset that needs consideration is your business.
Considerations you would need to make for your business would include deciding whether you’ll want to transfer or sell. Regardless, both of those options include paperwork. The articles of incorporation and operating agreement of your business can work collaboratively with your estate documents to help smoothen out this process.
It’s important to note that estate planning is an ongoing strategy, not a one-time event. You should review and update your plan as your family, financial circumstances, and laws change throughout your lifetime. That’s just one of many reasons why having an attorney on your team will help you, your loved ones, and your business.
The Benefits of a Family Office
If you are the type of person who believes you can do it all — let’s be honest, most entrepreneurs are — it may be difficult to relinquish control and let someone else take the reins. It might even be hard to let other people give you advice. But, in the long run it benefits you in so many ways. You’re able to save time, which you can then reprioritize in order to work on your business or spend time with your family.
A family wealth office allows you to spend time on the things that matter most to you. It’s a centralized resource that you don’t have to manage. Consequently, since you don’t need to juggle everything, nothing slips through the cracks. Experts, because of their passions and industry knowledge, are able to spot the things you don’t see.
How to Create Your Own Virtual Family Office
One of the most difficult issues with having multiple advisers and consultants is navigating the collective team management. Typically, they aren’t communicating or collaborating with each other on a regular basis to achieve the best outcome for the entrepreneur.
This means you’re responsible for the whole infrastructure, which takes precious time away from your other responsibilities. To make matters worse, you likely don’t speak the languages of tax, law, insurance, or investments. With a virtual family office, that responsibility is offloaded onto a wealth planning firm.
The first step in building a family office is to evaluate your current team of advisers. You might have to manage this by yourself until you are in a stable and successful financial state to hand this off to the right wealth planning firm. Typically, your current advisers are not all “A” players. You’ll want to keep your top performers and replace the advisers who are not achieving the necessary results. The appropriate wealth planning firm will have the required expertise to oversee and communicate with your advisers and start managing the moving pieces.
The Bottom Line
As Jim Dew said, “Billionaires want a team that only works for their best interest and so should you.” When it comes to a family office, you want a team of people that can protect, manage, and grow your wealth. In the long run, family offices can save you time and help you live the life you want. By combining asset, cash, risk, and lifestyle management with financial planning, family offices help clients navigate the complex world of wealth management. As an entrepreneur, using a family wealth office is a smart strategy to prepare for the future and your legacy.
Despite eased inflation, the robust jobs report raised the prospect of progressive rate hikes. With anxiety escalating about the possibility of a Fed-induced recession, the market volatility is expected to remain elevated in the near future. Hence, investors could consider fundamentally sound and stable stocks Novartis (NVS), Descartes Systems (DSGX), and Magic Software (MGIC) for steady returns. Read on….
After a miserable 2022, stocks have surged significantly since the start of this year as investors believe that inflation will continue to cool and the economy could avoid a recession. The Nasdaq Composite is up nearly 13% this year after posting its best January in over 20 years.
After seeing progress in its fierce battle with inflation, the Federal Reserve raised interest rates by 25 basis points at the Federal Open Market Committee’s first meeting of 2023, pushing its key policy rate to 4.5%-4.75%. This marks the smallest rate hike since March last year. Fed Chairman Jerome Powell acknowledged that “the disinflationary process has begun,” noting progress, especially in goods prices.
However, the January jobs data revealed that employers added a robust 517,000 jobs, exceeding the 187,000 market estimate, and the unemployment rate fell to 3.5%, a 53-year low. The labor market’s extraordinary strength underscores that the central bank has more work to do to tame inflation.
“If we continue to get, for example, strong labor market reports or higher inflation reports, it may well be the case that we have to do more and raise rates more than is priced in,” Powell said.
Furthermore, Federal Reserve Bank of Richmond President Thomas Barkin threw water on any hopes for a dovish turn in monetary policy by stating in an interview the importance of “staying the course” in order to return inflation to the Fed’s target of 2%.
Continued rate hikes are expected to push the economy into a recession. With the possibility of continued rate increases and a troubled economy, 2023 could be another volatile year for the stock market.
Therefore, investors could consider buying fundamentally strong and stable stocks Novartis AG (NVS), The Descartes Systems Group Inc. (DSGX), and Magic Software Enterprises Ltd. (MGIC) for steady risk-adjusted returns. These stocks are rated A for Stability in our POWR Ratings system.
Headquartered in Basel, Switzerland, NVS researches, develops, manufactures, and markets healthcare products worldwide. The company operates through two segments, Innovative Medicines; and Sandoz. It provides prescription medicine for patients and physicians. In addition, it offers cardiovascular, neuroscience, immunology, and solid tumor products.
On February 6, 2023, Sandoz, a division of NVS and the global leader in off-patent medicines, announced that the US Food and Drug Administration (FDA) accepted its Biologics License Application (BLA) for proposed biosimilar denosumab. Denosumab is indicated for treating various conditions, including osteoporosis in postmenopausal women.
The company continues to build a biosimilar portfolio to extend patient access to high-quality therapies and promote the sustainability of healthcare systems.
Also, on January 24, Sandoz struck a deal with Astellas to acquire worldwide product rights to the leading systemic antifungal drug Mycamine®. The addition of Mycamine® will support Sandoz global program to combat antimicrobial resistance (AMR) through the targeted use of appropriate therapies. This agreement might reinforce Sandoz hospital offering and enhance its position in generic antibiotics.
NVS has paid dividends for 25 consecutive years. NVS’ current dividend translates to a 4.02% yield annually, while its four-year average dividend yield is 3.58%. Over the last three years, its dividend payouts have grown at a 5.5% CAGR.
For the fourth quarter that ended December 31, 2022, NVS’ core operating income came in at $4.03 billion, up 5.5% year-over-year. Its core net income increased 3.7% year-over-year to $3.25 billion, while its core EPS was $1.52, up 8.6% year-over-year. In addition, the company’s free cash flow stood at $3.55 billion, an increase of 17.3% year-over-year.
NVS’ revenue is expected to increase 3.4% year-over-year to $52.26 billion in 2023, while its EPS is expected to grow 6.4% year-over-year to $6.51. Moreover, the company surpassed the consensus EPS estimates in three of the trailing four quarters.
In addition, the consensus revenue and EPS estimate for the next fiscal year 2024 of $53.79 billion and $6.71 indicates an improvement of 2.9% and 3.1% year-over-year. Respectively.
The stock has gained 1% over the past five days to close the last trading session at $86.31. It has a 24-month beta of 0.29.
NVS’ POWR Ratings reflect this promising outlook. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
NVS has an A grade for Stability and a B for Sentiment, Value, and Quality. Within the Medical – Pharmaceuticals industry, it is ranked #2 out of 172 stocks.
Click here to access the additional POWR Ratings for NVS (Growth and Momentum).
Headquartered in Waterloo, Canada, DSGX provides cloud-based logistics and supply chain management and business process solutions that enhance the productivity, performance, and security of logistics-intensive businesses worldwide. Its Logistics Technology platform offers a range of modular, cloud-based, and interoperable web and wireless logistics management applications.
On January 6, 2023, DSGX acquired Supply Vision, a provider of shipment management solutions for North American Logistics Services Providers (LSPs). DSGX’s CEO, Edward J Ryan, said, “The Supply Vision acquisition complements our recent investments in QuestaWeb, Kontainers, and Portrix, as we look to broaden our footprint for LSPs.”
“We’re looking forward to working with the Supply Vision customers, partners, and team of domain experts to continue to help LSPs digitize their operations and manage the lifecycle of shipments in a secure, efficient and sustainable manner,” he added.
For the fiscal 2023 third quarter ended October 31, 2022, DSGX’s revenues increased 11.5% year-over-year to $121.47 million. The company’s income from operations grew 25.2% from the year-ago value to $34.80 million. Also, its adjusted EBITDA increased 13.1% year-over-year to $54.50 million.
Additionally, the company’s net income increased 3.8% year-over-year to $26.47 million, while its EPS came in at $0.31, an increase of 3.3% from the prior-year quarter.
Analysts expect DSGX’s revenue to increase 9.9% year-over-year to $532.45 million in the fiscal year ending January 2024. The company’s EPS for the next year is expected to grow 18.1% year-over-year to $1.40. It has an impressive earnings surprise history, surpassing the consensus EPS estimates in three of the trailing four quarters.
Shares of DSGX have gained 5.5% over the past month and 4.9% over the past six months to close the last trading session at $74.83. The stock has a 24-month beta of 0.76.
DSGX’s fundamental strength and positive outlook are reflected in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
The stock has an A grade for Stability and a B for Quality and Sentiment. Within the Software – SAAS industry, it is ranked first out of 26 stocks.
To see the additional ratings of DSGX for Growth, Value, and Momentum, click here.
MGIC offers proprietary application development, business process integration, vertical software solutions, and IT outsourcing software services internationally. The company operates through Software Services and IT Professional Services segments. It is headquartered in Or Yehuda, Israel.
In the third quarter of fiscal 2022 ended September 30, MGIC’s revenues increased 19.1% year-over-year to $144 million, while its non-GAAP gross profit grew 18.5% from the year-ago value to $40.50 million. The company’s non-GAAP operating income rose 14.4% year-over-year to $18.50 million.
Furthermore, the company’s non-GAAP net income increased 14.9% from the prior-year period to $13.50 million, and its non-GAAP EPS came in at $0.28, up 16.7% year-over-year.
The company pays a $0.58 per share dividend annually, which translates to a 3.41% yield on the current share price. Its four-year average dividend yield is 2.57%. Its dividend payouts have grown at a CAGR of 18.3% over the past three years and 18.7% over the past five years.
Analysts expect MGIC’s revenue and EPS for the fiscal year (ended December 2022) to increase 17.1% and 9% year-over-year to $562.60 million and $1.02, respectively. The company’s revenue and EPS for the current fiscal year 2023 are expected to increase 8.8% and 12.2% year-over-year to $612.10 million and $1.15, respectively.
The stock has gained 3.3% over the past month to close the last trading session at $16.80. It has a 24-month beta of 0.93.
NVS’ POWR Ratings reflect its bright growth prospects. The stock’s overall B rating translates to a Buy in our proprietary rating system.
It has an A grade for Stability and a B for Sentiment and Growth. The stock is ranked #7 among 136 stocks in the Software-Application industry.
We have also given MGIC grades for Value, Quality, and Momentum. Get all MGIC ratings here.
What gives these stocks the right stuff to become big winners, even in this brutal stock market?
First, because they are all low-priced companies with the most upside potential in today’s volatile markets.
But even more important is that they are all top Buy rated stocks according to our coveted POWR Ratings system, and they excel in key areas of growth, sentiment and momentum.
Click below now to see these 3 exciting stocks that could double or more in the year ahead.
NVS shares were unchanged in premarket trading Friday. Year-to-date, NVS has declined -4.86%, versus a 6.45% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
Every year, the IRS asks Americans to file their taxes early. This year, however, the agency is telling millions of Americans who received special refunds from their state to hold off for now in order to determine if those refunds are taxable or not. Jacob Bogage, a business reporter for the Washington Post, joined CBS News to break down what this means.
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
NFTs are a relatively new concept that burst onto the scene with the metaverse development. NFT stands for non-fungible token. When dealing with economics, fungible assets refer to readily interchangeable units, such as money and currency.
For example, you could exchange four American five-dollar bills for one American twenty-dollar bill, which would hold the same value. However, any non-fungible asset has unique properties that cannot be interchanged with anything else.
NFTs are assets that can be purchased or sold, just like any other object or property, but they are unique intangible objects. NFTs are digital assets bought, sold and traded within the metaverse.
NFTs are not just one form — even though they are not traditional art, they now very much exist in the art world. But how can something digital and intangible be art? Keep reading to find out more.
While there are a few different ideas of who first invented NFTs, the movement started in 2012-2013. Many agree that Colored Coins were the first NFT to exist. Colored Coins were introduced as part of a bitcoin and can be a tiny currency representing multiple assets.
Colored Coins’ biggest flaw was the reliance on people to agree on its value. Colored Coins were not a perfect science, but they did open up a whole new concept in NFTs.
2014 – 2016: Trading cards and memes
After Colored Coins paved the way, several others realized the potential of blockchains. Blockchains are virtual ledgers that record transactions via virtual code. Transactions are recorded in the block, and the chain keeps track of everything.
Each cryptocurrency user has a unique blockchain that serves as their digital ledger. Blockchain technology is meant to prevent fraud in the world of cryptocurrency.
During this timeframe, several more companies tried their hand at NFTs.
Counterparty: This NFT platform allowed users to build projects and assets, like trading cards and memes, on top of the Bitcoin blockchain through a decentralized exchange. Eventually, Counterparty partnered with the popular trading card game Force of Will, which showed the industry how valuable NFTs could be.
Rare Peeps: Rare Peeps introduced memes to a scene once dominated by trading cards. The platform became so popular that unique NFT memes were eventually traded on multiple blockchains, including Bitcoin (BTC) and Ethereum (ETH) blockchain.
Cryptopunks was the next stage in the evolution of blockchain entertainment. Rather than only dealing in memes, creators produced characters that users could own as avatars. There were only 10,000 available characters, and the low supply drove up demand as people bought and traded the unique animations.
Around the same time, CryptoKitties came to the scene not only as stock characters but as a virtual game through which players could adopt, raise and trade virtual cats. The highest-priced cat characters sold for over $100,000.
With more and more digital items like animations, video games, gifs and memes available to crypto fans, NFT marketplaces and ideas continued to develop. Some of the biggest NFT marketplaces include:
OpenSea.
Rarible.
Nifty Gateway.
Solana.
SuperRare.
These marketplaces hold endless opportunities for people with all kinds of interests. From real estate to purchasing an NFT version of Jack Dorsey’s first Tweet, there is something for everyone.
And once people realized how valuable images could be, the art community became interested as a new craze began.
Much like any item in NFT form, NFT art is digital art that is tokenized in the blockchain. The artwork is entirely digital, meaning that investors ultimately buy, sell and trade in the metaverse.
Just like there is only one original with physical art, NFT art only has one original. Even though it is relatively easy to copy with downloads and screenshots, only the original holds the unique value. Just how much money is in the NFT art world? Keep reading to find out.
NFT art has taken the art community by storm. Although buyers and sellers never actually touch the art they own, they are still willing to pay top dollar to have unique pieces made by digital artists.
Many of these artists use social media to publicize their work, while others stick to the NFT markets. See the list below to see which artists have made the most revenue from this new movement.
1. PAK
At $291,732,674.58, PAK is the highest-grossing artist in the world of NFTs. Only a little is known about the artist, as they have remained anonymous throughout their time in digital media.
However, one of their most famous and highest-selling pieces is a commentary called Clock, a digital counter representing the number of days Julian Assange, the WikiLeaks founder, has served in prison.
2. BEEPLE
Until PAK surpassed him, Beeple held the record of highest-selling NFT art. Everydays: The First 5000 Days sold for $69,346,250.00 at a Christie’s auction house session. This auction is primarily credited with putting NFT art on the mainstream media map, and it also marked the first auction that sold cryptoart and accepted cryptocurrency payments.
3. SNOWFRO
SNOWFRO is an artist and the founder of Art Block, a generative art platform that allows artists to present and sell their art NFTs like a digital art gallery. As an artist, his highest-selling piece sold for $8,129.59, and his total artwork value is $71,428,522.72.
4. TYLERXHOBBS
Tyler Hobbs is an NFT artist who aims to provide positive messaging in his art. His highest-selling piece, Incomplete Control, sold for $81,227.67 and told the story of letting go, allowing yourself to breathe and accepting the imperfections of life and self. TYLERXHOBBS has found success in his mediums of algorithms, paint and plotters.
5. XCOPY
This artist has grossed $55,620,220.68 in NFT sales with his 9,575 pieces of NFT art that primarily focus on dystopian themes. His images include movement rather than remaining still on a screen.
6. DMITRICHERNIAK
DMITRICHERNIAK lives in the abstract part of the NFT space. His highest-grossing digital file sold for $2,682,000.00 and showed the digital art world how colorful, geometric and modern NFT projects could be.
7. HACKATAO
This artist creates physical and digital art pieces, and their work reflects that duality with themes of society and its changes involving human behaviors and the metaverse. At $29,003,737.04 in earnings, the digital art community seems to resonate with the artist’s work.
8. FEWOCIOUS
This teenager is ahead of the game with $28,123,807.25 in earnings. They have used social media to leverage their work to over 100,000 followers across platforms. FEWOCIOUS lives in the pop surrealism space and has big plans for the future.
9. TREVOR JONES
Trevor Jones began working as a physical artist on canvas, but he quickly became fascinated with NFT art and started moving into QR codes and augmented reality.
Jones has seen tremendous success, as his highest-selling work earned him $368,856.40, which helped his total artwork value reach $23,472,483.23.
10. MATTDESL
MATTDESL’s work is full of geometrical shapes, landforms, small strokes of color and 3D moving images. His total artwork value is up to $55,620,220.68, and his highest-selling work, Meridian, sold for $14,427.69.
The metaverse has something for everyone. While digital artwork certainly lives in a higher price range for your digital wallet, looking at NFT artwork is still just as accessible as looking at a physical piece of art in a museum.
NFT collections in the art market have grown as new artists emerge each day with works of art that appeal to all genres. Whether you love real-world art or are interested in finding a new medium, NFT art is certainly something to see for yourself.
Ready to learn more about NFTs and the metaverse? Visit Entrepreneur.com.
In the last two years, inflation has been a word on everyone’s minds. It seems unavoidable, whether you’re at the gas pump, the grocery store, or really anywhere else.
So why is this happening? And what causes it? Keep reading for all you need to know about inflation.
What is inflation?
Inflation measures the rise in PCE (personal consumption expenditures price index) or the expenses of goods and services over a certain period.
Generally, inflation rates are measured by year and examined on a broad scale of a country’s overall goods and services. However, inflation can also be measured using shorter or longer periods and can focus on one particular industry or product.
The measure of inflation follows a formula called the consumer price index. The consumer price index assesses the cost of living and how it changes over time.
The CPI formula takes the value of the market basket from a particular year, divides it by the value of the market basket from the base year, and multiplies that by 100 to produce a percentage.
Consumer Price Index = Value of Market Basket in Particular Year / Value of Market Basket in Base Year x 100
Once the CPI is calculated, the Inflation Rate Formula comes in. The Inflation Rate Formula involves two key variables.
A = CPI starting cost
B = CPI ending cost
Keeping those two variables in mind, the Inflation Rate Formula is as such:
To carry out this formula, begin by subtracting A from B to determine the price change for the good or service. Next, divide that result by A to achieve a decimal number. Multiply that decimal number by 100 to produce a percentage. That percentage change is the result and the rate of inflation.
Types and causes of inflation
Inflation is not always caused by just one thing. Several economic factors dictate inflation rates. Because of this, there are different types of inflation.
Demand-pull inflation
Demand-pull inflation occurs when an economy’s aggregate demand exceeds the aggregate supply. Demand-pull inflation comes into play when there is a higher demand than there is supply.
While inflation is not something people generally look forward to, it can be a sign of a healthy economy. Aggregate demand indicates high employment rates and higher levels of disposable income.
When workers have more disposable income, luxury and necessary spending rates increase, driving demand.
There are a few leading causes that trigger demand-pull inflation:
Household spending: When consumers feel comfortable enough to make discretionary purchases, it throws off the consumer price index because it is a new factor in the economic ecosystem. The general rule is that when consumer demand increases suddenly, the cost will follow the same pattern.
Business spending: Business spending is dictated by an economy’s gross domestic product (GDP). When the economy is healthy due to consumer spending, businesses increase production to keep up with that spending. The aggregate demand of consumers creates price increases for goods and services.
Government spending: During a recession, a government’s central bank will often try to kickstart the economy by dedicating monetary policy funding to new infrastructures and programs to create more jobs. While this is meant to help an economy, it also brings new market capital and drives prices up.
Foreign investment: Foreign investment is most prevalent when one country’s exchange rate is more favorable for buyers in another country. This means that if a large portion of buyers from one country finds affordable properties in another country, that will cause demand-pull inflation in that country’s market.
Cost-push inflation happens when an aggregate supply of goods and services experiences a decrease. An increase in raw materials generally causes this decrease in production cost or the labor it takes to produce those goods and services.
There are a few leading causes that trigger cost-push inflation:
Labor market: Salaries, healthcare and other benefits qualify as labor expenses. When unions negotiate wage increases or a government mandates new benefit requirements from employers, those new expenses can trigger cost-push inflation.
Capital: Capital is essential for any business, and it is common for companies to borrow money supply. However, the problem arises when investors limit their funding, or a business must pay an increased interest rate because those factors cause that business to increase the price of its products.
Land expenses: Environmental events like natural disasters can affect inflation and the cost of rent and construction for a business.
Entrepreneurship: When a new business begins or an existing business decides to scale, many costs are involved. Company costs like raw goods, rising wages and workspace all cause an increase in product prices, which can result in inflation.
Built-in inflation
Built-in inflation is the natural inflation that happens over time. As the prices for goods and services rise, people expect higher wages with those prices to afford rising costs of living.
The Covid-19 pandemic threw the economy for a loop, and now the world’s economy is experiencing aftereffects in many areas, especially inflation.
As the supply chain of major industries like retail, real estate, auto and travel race to catch up to the increased demand, prices are being driven up.
During World War II, the job market shifted, and people were conservative with their spending. However, once the war ended, the economy experienced a boom that it was not prepared for.
Demand was more significant than supply as people became liberal with purchases they had not been able to make during war times. Because of this rapid shift, inflation rose to over 20 percent.
December 1950 – December 1951
As the Korean War began in June 1950, people were accustomed to wartime mandates. Families raced to purchase necessities to prepare for rations and supply shortages, significantly increasing demand.
Once the war ended, people seemed to have learned from the late forties situation and did not rush to buy post-war like they did the first time. Because of this more reserved behavior, prices rose but not nearly as much as they had a few years prior.
March 1969 – January 1971
The economy and job market were booming during this period, increasing prices. Because inflation was so drastic, the government stepped in and mandated a wage and price freeze.
April 1973 – October 1982
The seventies brought the U.S. the most prolonged period of inflation to date. An oil embargo followed by a decline in oil production during the Iran-Iraq War caused lasting inflation rates.
Again, the Federal Reserve (sometimes referred to as “The Fed”) had to step in. That meant increased interest rates to level out the inflation rate.
April 1989 – May 1991
The first Gulf War brought much uncertainty in the supply chain and relations. This trepidation drove up crude oil prices, leading to a short inflation period.
July 2008 – August 2008
While this was a short-term period, it took a considerable toll on the economy. Exponential rises in gas prices shot the CPI up five percent over these two months. The cost of crude oil doubled in only a year from $70 to $140.
Pros and cons of inflation
Inflation means rising prices, so how could there be positives to that? Like anything else, there are pros and cons to inflation.
Pros of inflation
Enhanced economic growth: During inflation periods, businesses often experience higher demand, which causes them to increase production to keep up. To keep up with increased production, companies must hire more workers or provide current workers with more hours, leading to a healthier job market.
Provides for wage adjustment: Inflation creates a type of “new normal,” which allows companies to adjust the prices of goods and services and employee wages.
Better borrowing: Many people are given wage increases due to inflation. However, loan interest rates that were established before inflation do not increase. This means that employees who receive raises have more financial capital and might be able to pay off their loans faster or at least with less pressure.
Increased employment rates: Because goods and services become more expensive, businesses have more revenue to put back into their company with more jobs and production.
Cons of inflation
Impacted savings: As goods and services become more expensive, a gap can often occur as the rest of the economy levels out. If living costs rise but wages do not, it becomes increasingly difficult for people to save.
Decreased investments: When there is uncertainty in an economy, investors become more tentative with their money. Investors also want their money to go as far as possible, and inflation slows that process.
Less competition: The economy needs competition. However,with countries that use the same currency, it can be challenging to evaluate currency value if one experiences inflation but the other does not. This slows the import and export system and ultimately slows the economy.
Disadvantages for pensions and minimum wage: During periods of inflation, the minimum wage is generally the last to experience a raise. Because the government controls the minimum wage, it is up to them to raise it rather than the employer. In addition, those who receive pensions on a fixed rate will receive the same amount of money even though inflation will affect how far the dollar goes.
While no city has remained immune to inflation, some areas have been hit much harder than others.
Some of these cities were becoming more affordable before the pandemic. However, the economy experienced such a shift during the pandemic years that most have experienced a yoyo effect.
And it’s not only expensive cities that have continued to become more expensive; rather, some formerly affordable cities have experienced the most change. Take a look at the 15 cities that have experienced the highest rate of inflation based on the CPI change in the last year.
1. Anchorage, Alaska
Score: 100.00
CPI change: 12.40%
2. Phoenix – Mesa – Scottsdale, Arizona
Score: 68.38
CPI change: 12.30%
3. Atlanta – Sandy Springs – Roswell, Georgia
Score: 56.22
CPI change: 11.50%
4. Seattle – Tacoma – Bellevue, Washington
Score: 50.51
CPI change: 10.10%
5. Baltimore – Columbia – Towson, Maryland
Score: 50.13
CPI change: 10.60%
6. Miami – Fort Lauderdale – West Palm Beach, Florida
Score: 49.36
CPI change: 10.60%
7. Houston – The Woodlands – Sugar Land, Texas
Score: 48.28
CPI change: 10.20%
8. Detroit – Warren – Dearborn, Michigan
Score: 45.58
CPI change: 9.70%
9. Tampa – St. Petersburg – Clearwater, Florida
Score: 45.22
CPI change: 11.20%
10. Philadelphia, Pennsylvania – Camden, New Jersey – Wilmington, Delaware
Score: 32.57
CPI change: 8.80%
11. St. Louis, Missouri
Score: 29.95
CPI change: 8.40%
12. Dallas – Fort Worth – Arlington, Texas
Score: 27.65
CPI change: 9.40%
13. Riverside – San Bernardino – Ontario, California
Score: 26.73
CPI change: 9.20%
14. Chicago – Naperville – Elgin, Illinois
Score: 26.42
CPI change: 8.80%
15. Denver – Aurora – Lakewood, Colorado
Score: 22.87
CPI change: 8.20%
Inflation expectations: How much longer will it last?
As history shows, inflation is an expected result after a considerable economic disruption. The pandemic was certainly a significant disruption, and the world’s economy is still experiencing aftereffects.
In addition to the pandemic, other world events have had additional effects on the world’s economy. So, how much longer will inflation last?
The economy has been relatively unpredictable in the wake of these events, and economists continue to gather and study data to offer predictions on what people can expect.
Rates are expected to decline from just under nine percent in 2022 to six and a half percent in 2023 and four percent in 2024.
However, economists also take history into account. While inflation rates are predicted to decline, a key caveat in the equation is the eight percent threshold.
You don’t have to change your whole lifestyle, but if there are little things you can cut out to save extra cash, now is the time.
Whether combating food prices by cooking at home one extra night a week or pausing a subscription you don’t use that much, focus on the essentials for the time being.
2. Create and maintain an emergency fund.
Now is a great time to start if you don’t already have an emergency fund. Those small luxuries you just cut out? Input them into the fund and save them for a rainy day in preparation for hyperinflation.
If you’re savvy with the stock market or have always wanted to get involved, study and find a suitable investment. If you don’t think that’s the right fit, take that emergency fund and convert it into something like a high-yield savings account that will build better interest over time.
From student loans to personal finance, sometimes debt can be unavoidable. However, the key is not to get in too deep.
If you have to take on debt, make sure that you have a payback plan and that you are not committing to high-interest debt that will be more difficult to pay off in the long run.
Several factors cause inflation; unfortunately, those factors currently affect the entire world.
While some hope inflation will recede in the coming year or two, other elements might slow that process. In either case, it is always prudent to prepare some backup funds if you ever need them.
Explore the rest of Entrepreneur.com if you’re looking for more information on professional-impacting topics like the economy, unemployment rates orinvesting.
Rich Mintzer’s new book, Start Your Own Pet Business, outlines everything you need to know about launching and growing an animal-based business from your home. In this excerpt, he dives into the specifics of managing your finances to keep your business as healthy and happy as your tail-wagging clients.
Sign up for an accounting workshop
No matter if you are caring for two dogs or two hundred, every business needs to keep track of money coming in and money going out. One way to make the accounting and financial framework of your business less daunting is to take an accounting class. You can find many online classes, as well as articles, on basic accounting and/or managing finances for a small business. You can also check with your local Small Business Development Center (SBDC), which may offer small-business accounting classes or keep a list of classes offered through local community colleges or continuing-education programs at a local university. Be logical when you sign up for an accounting class—don’t sign up for a class that covers information beyond your current need or ability to understand. You don’t need to know how to read the financial report of a $60 million international company to run your $20,000 local pet-sitting operation.
Keep receipts
If you have ever had even the smallest business or if you have ever worked for anyone else, you probably have heard this before, but it bears repeating: Keep every receipt for any dime you spend on the business. Keep them in one place and record them in your ledger at least weekly. These records tell you a lot about your business. You may notice patterns, expenditures that seem excessive, or other changes you could make for your business to be more efficient.
Because pet-sitting businesses often don’t take a lot of capital to set up, you have to be careful not to fall into the trap of starting your business and simply using your personal checking account to pay for expenses and to deposit income. Set up a separate checking account and designate it for the business. Pay for everything with this account, even if you use its debit card instead of actually writing a check. It doesn’t have to be a “business” checking account—another personal account will do—just give the business an account all its own. Not only is it good for keeping accurate track of expenses, but some psychological aspects result from having separate accounts and ledgers for taking yourself and your business seriously. Have the business name printed on your business-specific checking account—it lends an air of professionalism.
Get bookkeeping software
Many software programs exist for easy setup of bookkeeping for your small business. Two commonly used ones are QuickBooks and Microsoft Office. Set aside a large chunk of time to get yourself set up, and then set aside time on an ongoing basis, maybe an hour weekly and a morning monthly. Be sure to keep these software products up-to-date by signing up for automatic updates or reminders so you can keep as up-to-date as possible. Although the bookkeeping programs probably won’t have as much in the way of updates, tax programs have constant updates. If you know yourself well enough to know you are not going to set aside this time to feed your bookkeeping software, then hire an accountant. The same goes for tax time. You may want to enlist a small business tax expert to decipher what expenses can and can not be deducted, at least for the first year of running your business.
Creating invoices and receipts
Even if you require payment on the spot, you always want to provide your client with an invoice for your services. This allows both of you to keep a record of your visits. Depending on how fast your business plan shows your business increasing revenue and adding clients, you may want to think early on about having client software that keeps records of your clients. If you look to have only ten clients for the first year, you could create a spreadsheet using Excel or Google Sheets. As you grow, you may want to invest in a business software package. Besides generating invoices, it keeps an easy-to-access history of services you provided.
The easiest manner in which to collect money in a business such as pet-sitting might be good old cash or a simple account transfer via an app like Venmo or PayPal because your fees are typically for only a few hours at a time. As your company grows, you’ll want to look into having credit card options, such as the easy-to-use Square payment system, which allows you to use your cell phone as a mobile cash register (https://squareup.com). This will entail setting up a credit card merchant account, a bank account, and a way to process payments. Some startup payment fees and fees per transaction (which are usually around 2 to 4 percent) apply. The merchant account will allow you to accept payments through Visa, Mastercard, American Express, and other credit card companies. You can Google merchant services and compare options.
Paying yourself
One of the perks of opening a low-cost, no-overhead business is you can usually start taking some money for yourself early on while putting the rest into the business. If you know your ongoing expenses, you can cover them and have some money left over. If, however, you are looking to build a large pet-sitting business with offices and many employees, then—like most startups—you will need to put nearly all the money earned back into the business for the first year or two. This means you need to have some money set aside to help you pay your bills when starting the business. If you can afford to do this, that’s great—you should probably plan to do this for at least the first year, depending on how complex a business you establish.
The IRS is asking millions of taxpayers in California, Colorado and other states that issued tax rebates last year to hold off on filing their taxes.
The reason: The agency said it is seeking to clarify whether those tax rebates and special refunds are considered taxable income. “We expect to provide additional clarity for as many states and taxpayers as possible next week,” the IRS said on Friday.
About 16 million California residents received “middle-class tax refund” checks of $350 per eligible taxpayer last year, part of a relief package designed by the state to help residents cope with soaring inflation at a time when the state had a budget surplus.
Many other states, including Colorado, Illinois and South Carolina, authorized tax rebates last year as their coffers were buoyed by strong economic growth and federal pandemic aid.
But those one-time windfalls are now throwing a wrench into tax season for millions of Americans, many of whom count on getting timely tax refunds to pay down debt, make a purchase or get on top of bills. Last year, the average tax refund (for the 2021 tax year) was almost $3,200, a 14% jump from the prior year, according to IRS data — an amount that’s bigger than the typical worker’s paycheck.
Some taxpayers took to social media to express their frustration at the IRS guidance that they should delay filing their tax returns. The agency started accepting returns for this year’s tax season on Jan. 23.
“So I tried to sit down this morning for a fun game of Do Your Taxes, but turns out the IRS hasn’t decided if California’s Middle Class Tax Relief payments are taxable or not…,” one taxpayer wrote on Twitter.
The IRS issued the guidance after Rep. Kevin Kiley, a Republican from California, wrote to the tax agency to say that his office had been contacted by “numerous” constituents asking for help on the issue.
“Many of the 16 million residents of California who received the refund are unable to file a 2022 tax return because they do not have clear guidance as to whether to include this payment” as taxable income, he wrote in the February 2 letter.
On Friday, the IRS advised, “[T]he best course of action is to wait for additional clarification on state payments rather than calling the IRS.”
It added, “We also do not recommend amending a previously filed 2022 return.” Amended returns have been caught up in the IRS’ backlog, leading to processing delays.
Investor confidence in stock market (SPY) direction is very low. That is because of the big divergence in market outlooks from leading market prognosticators. Some make a great case for a new bull market emerging. Others make an equally logical pitch for the bear market to return with new lows on the way. That is why 40 year investment pro Steve Reitmeister shares his view in his brand new market commentary below.
The stock market (SPY) has been up, down and all around since last week’s commentary. That’s because bulls and bears are slugging it out for dominance during this “Dazed & Confused” phase for the market.
What does that mean?
What happens next?
What should an investor do about it?
We will explore the answers for each of these pressing questions in this week’s Reitmeister Total Return commentary.
Market Commentary
Now let’s a step back to last week’s commentary where I outlined 4 possible outcomes for the market after the very important Fed rate announcement on Wednesday 2/1. Indeed, we landed on the least of attractive of which. That being…
“Scenario 4: Dazed & Confused
This is where the Fed gives mixed signals. Still hawkish for a long time to save face given previous statements. And yet do tip their hat a little to moderating inflation.
This gray area leads to a trading range until investors have more facts in hand. I suspect that 4,000 is the low end with 4,200 at the high end. This comes hand in hand with a ton of volatility as each new headline has investors recalibrate the bull/bear odds.”
The market since then has lived up to ever single syllable of the above expectations. Especially the part about the volatility that comes after every key headline.
Raging higher after the speech
Tumbling down Friday & Monday after unemployment report came in WAY TOO HOT pointing to the need for the Fed to stay vigilant against inflation a good while longer.
And then raging higher again today after Chairman Powell’s interview at The Economic Club of Washington D.C.
Watch it here if you like, but to me he just reiterates the point that inflation is too hot and the aforementioned employment report only confirmed that notion. This prompts him to keep rates elevated for much longer than most investors appreciate.
Heck, he even stated that this surprising strength may lead them to be even more hawkish than previously stated. Perhaps that means higher than 5% rates. And perhaps it means they will be at it longer than the end of the year. Perhaps both.
These ideas are very hawkish, increasing the odds of recession, making the Tuesday rally borderline insane. But then again, such was the oddity of the reaction last Wednesday when he said virtually identical things.
Looking ahead the main headline catalysts for stocks will be the following:
2/14 Consumer Price Index
2/15 Retail Sales
2/16 Produce Price Index
That means there is a bit of calm before the next headline storm and thus expect stocks to keep banging around in the 4,000 to 4,200 range for the S&P 500 (SPY) til then.
What is so special about 4,200?
The official definition of a new bull market is when you rise 20% from the lows. In this case the lows from October were 3,491 x 20% = 4,189…which basically equates to 4,200.
Note how we flirted with that level a few times this past week only to find too much resistance.
Here is our game plan from here…
Right now, I see a 65% chance that we devolve back into bear market making new lows in the months ahead. But 35% chance of a soft landing that makes way for the next bull market.
This explains why the Reitmeister Total Return portfolio is currently 36% long the stock market with a blend of Risk On and Risk Off positions.
If and when the bear market comes back with a vengeance, as likely signified by a break back below the 200 day moving average (3,947), then we will get back into our bearish hedge that so successfully gained nearly 7% from August 2022 through year end as the overall stock market slumped.
On the other hand, if instead we break above 4,200 in a meaningful way, then the odds of bull market will have increased…and we will want to come along for the ride by moving up to 50-60% long the stock market. The new additions should be of the Risk On variety (growthy companies at discounted prices with impressive POWR Ratings).
I will end by sharing this analogy.
The investment journey is often like going around a Grand Prix race track. Lots of twist and turns that make us become cautious and slow down. But right after the turns comes the straightaway where we can put the pedal to the metal with greater confidence.
Indeed this is a heck of a tight turn right now as we could break north with bull market or get back on the rougher bearish detour. So hold onto the steering wheel tight right now as there is likely a straightaway on the way that will make our lives easier…and our wallets fatter.
What To Do Next?
Watch my brand new presentation: “Stock Trading Plan for 2023” covering:
Why 2023 is a “Jekyll & Hyde” year for stocks
How the Bear Market Could Come Back with a Vengeance
9 Trades to Profit Now
2 Trades with 100%+ Upside Potential as New Bull Emerges
SPY shares . Year-to-date, SPY has gained 8.57%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Steve Reitmeister
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.
Defying market headwinds, the U.S. job market remains robust. The labor market showing resiliency has led to declining recession odds. Therefore, investors might buy top-quality stocks Albertsons Companies (ACI), American Vanguard (AVD), and AstroNova (ALOT) now. These stocks are currently trading under $30 and are A (Strong Buy) rated in our proprietary system. Keep reading.
The U.S. labor market remains resilient in the face of lingering macro headwinds and massive tech layoffs. The unemployment rate slipped to 3.4% in January, the lowest since 1969. While interest rate hikes by the Fed are expected to continue, the pace could be slower.
Moreover, given the strong job market, Goldman Sachs has slashed its U.S. recession estimates. The bank believes there’s now a 25% chance the U.S. will suffer a recession within 12 months, down from the previous forecast of 35%.
In addition, business indices have shown signs of improvement of late. The ISM Services PMI for the U.S. beat estimates and jumped to 55.2 in January, rebounding sharply from over a two-year low of 49.2 in December.
Given the backdrop, investors could consider buying top quality stocks Albertsons Companies, Inc. (ACI), American Vanguard Corporation (AVD), and AstroNova, Inc. (ALOT), which are currently trading under $30. These stocks are A (Strong Buy) rated in our POWR Ratings system.
ACI and its subsidiaries operate food and drug stores in the United States. The company’s food and retail drug stores offer grocery, general merchandise, health and beauty care products, pharmacy, fuel, and other items and services.
On February 6, 2023, ACI announced the launch of Sincerely Health, a digital health and wellness platform. The platform will offer customized health and wellness services and is expected to enhance ACI’s portfolio.
ACI’s forward EV/Sales of 0.29x is 83.6% lower than the industry average of 1.79x. Its forward Price/Sales of 0.15x is 88.4% lower than the industry average of 1.28x.
Its trailing-12-month ROCE and ROTC of 81.65% and 9.44% are 685.1% and 53.4% higher than the industry averages of 10.40% and 6.16%.
ACI’s net sales and other revenue came in at $18.15 billion for the quarter that ended December 3, 2022, up 8.5% year-over-year. Its adjusted net income increased 10.5% year-over-year to $505.10 million, while its adjusted EPS increased 10.1% year-over-year to $0.87.
Analysts expect ACI’s revenue to increase 7.9% year-over-year to $77.56 billion for the current fiscal year, 2023. Its EPS is expected to increase 5.9% year-over-year to $3.25 for the same period. It surpassed EPS estimates in all four trailing quarters. Over the past month, the stock has gained 2.7% to close the last trading session at $21.37.
ACI’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, equating to a Strong Buy in our POWR Rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
Also, the stock has a B grade for Value, Sentiment, and Quality. It is ranked #7 out of 39 stocks in the A-rated Grocery/Big Box Retailers industry. Click here for ACI’s additional POWR Ratings for Growth, Momentum, and Stability.
AVD and its subsidiaries develop, manufacture, and market specialty chemicals for agricultural, commercial, and consumer uses in the United States and internationally.
On January 17, 2023, AMGUARD™ Environmental Technologies, the specialty markets division of AMVAC Chemical Corporation, a wholly owned subsidiary of AVD, announced the acquisition of the product and trademark assets of American Bio-Systems.
Shayne M. Wetherall, the CEO of AMGUARD, said, “BioMop-Plus and DrainGel are a great fit with AMGUARD’s portfolio and our strategy to provide compelling biological solutions to the commercial pest control industry.”
AVD’s forward EV/Sales of 1.31x is 14.7% lower than the industry average of 1.53x. Its forward Price/Sales of 1.06x is 11.9% lower than the industry average of 1.20x.
AVD’s trailing-12-month gross profit margin of 39.65% is 29.7% higher than the industry average of 30.57%.
AVD’s net sales came in at $152.12 million for the quarter that ended September 30, 2022, up 3.3% year-over-year. Its net income increased 22.6% year-over-year to $6.74 million. Also, its EPS came in at $0.23, representing an increase of 27.8% year-over-year.
Street expects AVD’s revenue to increase 4.2% year-over-year to $165.45 million for the yet-to-be-reported quarter ending December 2022. Its EPS is expected to increase 55.6% year-over-year to $0.28 for the same period. Over the past year, the stock has gained 46.5% to close the last trading session at $21.40.
It’s no surprise that AVD has an overall A rating, which equates to a Strong Buy in our proprietary rating system. In addition, it has a B grade for Growth, Value, Stability, Sentiment, and Quality.
AVD is ranked #2 out of 87 stocks in the B-rated Chemicals industry. Get additional POWR Ratings for AVD (Momentum) here.
ALOT designs, develops, manufactures, and distributes specialty printers, and data acquisition and analysis systems in the United States, Europe, Asia, Canada, Central and South America, and internationally. The company operates in two segments, Product Identification and Test & Measurement.
In terms of trailing-12-month Price/Sales, ALOT’s 0.72x is 75.6% lower than the industry average of 2.95x. Its trailing-12-month Price/Book of 1.18x is 62.4% lower than the industry average of 3.13x.
ALOT’s trailing-12-month CAPEX/Sales of 13.25% is 428% higher than the industry average of 2.51%.
ALOT’s revenue increased 36.6% year-over-year to $39.41 million for the quarter that ended October 29, 2022. Its net income came in at $289,000, compared to a loss of $425,000 in the year-ago period. Moreover, its EPS came in at $0.04, compared to a loss per share of $0.06 in the prior-year period.
ALOT’s revenue is expected to increase 6.4% year-over-year to $125.03 million in 2023. Over the past six months, the stock has gained 7.9% to close the last trading session at $12.75.
ALOT has an overall A grade, equating to a Strong Buy in our POWR Ratings system.
It has an A grade for Value and Sentiment and a B for Momentum and Quality. It is ranked first among 49 stocks in the Technology – Hardware industry. To see Growth and Stability ratings for ALOT, click here.
What gives these stocks the right stuff to become big winners, even in this brutal stock market?
First, because they are all low-priced companies with the most upside potential in today’s volatile markets.
But even more important is that they are all top Buy rated stocks according to our coveted POWR Ratings system, and they excel in key areas of growth, sentiment, and momentum.
Click below now to see these 3 exciting stocks that could double or more in the year ahead.
ACI shares were unchanged in premarket trading Wednesday. Year-to-date, ACI has gained 3.62%, versus a 8.57% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
Home buying sentiment has been improving lately. Moreover, declining mortgage rates should further support the real estate industry. Given the sound prospects of the real estate sector, investors could consider buying quality real estate stock, AMREP (AXR). However, WeWork (WE) and Opendoor Technologies (OPEN) might be best avoided considering their weak fundamentals. Keep reading.
Amid the Fed’s consecutive rate hikes, home buying sentiment deteriorated significantly. However, conditions have improved of late. The Fannie Mae Home Purchase Sentiment Index® (HPSI) increased by 3.7 points in December 2022 to 61.0.
Doug Duncan, Fannie Mae Senior Vice President and Chief Economist said, “In December, the HPSI inched upward slightly, as consumers reported increased expectations that mortgage rates and home prices may decrease over the next year – perhaps reflecting recently observed declines in mortgage rates and average home prices.”
Moreover, mortgage rates decreased significantly over the past week. According to data from Freddie Mac, the 30-year fixed-rate mortgage averaged 6.09% in the week ending February 2, 2023, down from 6.13% the week before. This should foster the near-term home-buying sentiment.
In addition, the industry’s long-term growth prospects seem promising. The global real estate market is expected to grow at a CAGR of 7% until 2027.
Therefore, investors could consider buying quality real estate stock, AMREP Corporation (AXR). However, WeWork Inc. (WE) and Opendoor Technologies Inc. (OPEN) might be best avoided now, considering their weak fundamentals.
AXR primarily engages in the real estate business through two segments, Land Development, and Homebuilding.
AXR’s net income margin of 25.98% is 57.9% higher than the industry average of 16.46%. Also, its ROCE of 17.94% compares with the industry average of 5.17%.
Its trailing-12-month P/E of 5.14x is 81.9% lower than the industry average of 28.44x, while its trailing-12-month EV/Sales multiple of 0.94 is 90.7% lower than the industry average of 10.13.
For the fiscal quarter ended October 2022, AXR’s total revenues increased marginally from the year-ago period to $16.15 million. Its operating income came in at $4.47 million, indicating an increase of 2.6% year-over-year. AXR’s net income and EPS came in at $3.62 million and $0.68, reflecting an increase of 8.9% and 51.1% from the prior-year quarter.
AXR shares have gained 12.5% over the past month to close the last trading session at $13.50.
It’s no surprise that AXR has an overall B rating, equating to Buy in our proprietary POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It also has a B grade for Value and Sentiment. AXR is ranked #2 out of the 42 stocks in the Real Estate Services industry.
Click here to see additional ratings for Growth, Momentum, Quality, and Stability for AXR.
WE provide flexible workspace solutions to individuals and organizations worldwide. It delivers technology-driven turnkey solutions, flexible spaces, and community experiences. Its product offerings include Core space-as-a-service, WeWork All Access, WeWork On Demand, and WeWork Workplace.
WE’s trailing-12-month EBITDA margin of negative 26.46% is lower than the industry average of 55.55%. Its trailing-12-month net income margin of negative 73.67% compares with the industry average of 16.46%.
WE’s cash and cash equivalents came in at $460 million for the period ended September 30, 2022, compared to $924 million for the period ended December 31, 2021, while its long-term net debt came in at $1 billion compared to $666 million. Net loss attributable to WE and net loss per share in the third quarter ended September 2022 came in at $568 million and $0.75.
WE’s EPS is expected to remain negative this year. It has lost 74.3% over the past year to close the last trading session at $1.87.
WE’s POWR Ratings reflect its poor prospects. It has an overall F grade, equating to a Strong Sell in our proprietary rating system.
It has an F for Stability and Quality and a D for Value and Sentiment. It is ranked #41 in the same industry. To see WE ratings for Growth and Momentum, click here.
OPEN operates a digital platform for residential real estate in the United States. The company’s platform allows consumers to buy and sell a home online. In addition, it offers title insurance and escrow services.
OPEN’s negative EBIT Margin of 4.60% is lower than the industry average of 23.42%, and its negative net income margin of 6.93% compares with the industry average of 16.46%.
OPEN’s gross loss came in at $425 million for the third quarter that ended September 30, 2022, compared to a gross profit of $202 million in the year-ago period. Its net loss came in at $928 million, up 1528.1% year-over-year, while its loss per share came in at $1.47, up 1533.3% year-over-year.
Street expects OPEN’s revenue to decrease 49.8% year-over-year to $2.59 billion for the quarter ending March 2023. Its EPS is expected to fall 1675% year-over-year to negative $0.63 for the same period. It missed EPS estimates in three out of four trailing quarters. The stock has lost 75.6% over the past year to close the last trading session at $2.36.
OPEN has an overall F rating, equating to a Strong Sell in our POWR Ratings system.
It has an F grade for Growth, Stability, and Sentiment and a D for Quality and Momentum. It is ranked #40 in the same industry. We have also rated OPEN for Value. Get all the OPEN ratings here.
What gives these stocks the right stuff to become big winners, even in this brutal stock market?
First, because they are all low-priced companies with the most upside potential in today’s volatile markets.
But even more important is that they are all top Buy rated stocks according to our coveted POWR Ratings system, and they excel in key areas of growth, sentiment and momentum.
Click below now to see these 3 exciting stocks that could double or more in the year ahead.
AXR shares were unchanged in premarket trading Wednesday. Year-to-date, AXR has gained 16.88%, versus a 8.57% rise in the benchmark S&P 500 index during the same period.
About the Author: RashmiKumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master’s degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions.
Opinions expressed by Entrepreneur contributors are their own.
I recently opened an office in Miami, and I love it. It’s simple — just a common area and a conference room — but modern and right by the water. It has a big storage area at the entrance, which I first considered converting into another conference room. But it had an odd electrical setup, so I asked my contractor about its history.
According to him, between the electrical work, air conditioning units and security, the space had likely been a crypto trading office. He was sure of it. Then, I realized I had seen that setup before.
In Miami, crypto is everywhere, with servers running so much data they require their own air conditioning units. When FTX collapsed, and the crypto market lost billions, Miami felt its impact. I knew a lot of people — friends and business associates — who went from making so much money on paper to now, hurting.
Fortunately, I managed to stay out of it. Sure, I was interested. A few people I knew made a lot of money on crypto, which made it tempting. Still, I could hear my dad’s voice, chiming in with that old chestnut, “when in doubt, don’t.”
These are the lessons I learned from this crypto collapse by following his sage advice.
I was never against the idea of crypto. Some of the fundamentals I find attractive — the blockchain creating supposed self-control rather than a Big Brother-ish federal banking agency. In the same way Web 3.0 promises to keep the Googles of the world from tracking our every digital move, crypto has its positives.
But I was also wary of the negatives. While I knew many people in Miami personally involved in crypto, there were always enough people in my life not accepting it that I never fully understood how it could be trading at such high values. The process of cashing out seemed too complicated, and it reminded me of the old “pump-and-dump” stock trading scams.
I also heeded Warren Buffett’s many doubts about the future of cryptocurrency, calling it “rat poison squared.” His arguments made sense: Apartments produce rent, land produces food, but crypto produces nothing tangible. If an expert like Buffett would turn down all of the bitcoin in the world for $25, a less experienced investor should certainly take inventory of their doubts before making any significant investments.
Let’s compare crypto with AI: I was uncomfortable exploring both technologies at first because I didn’t fully understand them. As the AI trend grew into a direction business was inevitably heading, I made efforts to learn about it. I found people who were able to give me straightforward explanations that allowed me to understand the technology. Since I could understand it, that made it easier for me to confidently invest in it.
Crypto specialists, on the other hand, never came close to providing such clarity. Mining crypto is an abstract process, so I called upon the best person I knew in the field to explain it to me. Even still, the details were fuzzy and I would unlikely be able to re-explain it to anyone else. What I did understand was how much energy it required, which sounded crazy and unsustainable to me. Since that was my primary takeaway, I decided against investing.
Crypto is notoriously difficult to understand. Yet still, without a full picture of what they are buying, people are willing to invest. A 2021 survey of 750 investors found that only 16.9% “fully understood” its value and potential, while 33.5% had “zero knowledge” or a level of understanding they described as “emerging.” Many simply invested because it seemed popular and they feared missing out.
Trust me, I understand how easy it can be to jump on a bandwagon. I remember one new technology starting to take off — though I barely remember what it was anymore — but it was so hot that a friend insisted I get in on it. So, I did. Without even knowing what the company produced, I put money into it. I didn’t want to be left out of the next big thing. So what happened? I lost big. Fortunately, it wasn’t that much money, but it taught me never to invest in what I didn’t fully understand.
Something about Sam Bankman-Fried, founder and former FTX CEO, put me off from the start. To me, SBF had all the markings of a scammer. He was dishing out financial support to the most prominent political names and getting his company’s name atop the Miami Heat stadium. He came into an industry full of what I saw as so many doubts with too much money, swagger, and confidence.
I may not know who was using my office for crypto mining before I moved in, but I know someone did, and I wonder if they contributed to the industry’s increased rate of cyber attacks, scams and bankruptcies. Bad characters have been around forever — from the northern carpetbaggers taking advantage of the war-torn south to the Ponzi scheme record-holder, Bernie Madoff — but in crypto, they seem abundant. If you don’t feel comfortable with the people behind something, don’t invest in it.
When someone asks for guidance toward a safe investment, I always recommend land. No one is making any more of it, and it’s tangible property that, unlike stocks, we can make use of while holding its value. But still, land can lose value or suffer damage. A couple of weeks ago, I was driving down the west coast of Florida, where so many people who had lost their homes were rebuilding after hurricane Ian.
In some form or another, everything comes with risk, so when an investment seems extra risky from the start, we should be even more careful about our decisions. Invest in understanding the fundamentals of a new technology first and take a more calculated risk. Learn as much as possible and write out any doubts throughout the process. If the doubts are all you understand by the end, then maybe you should rethink your investment.
This crash may not be the death of crypto, but the industry certainly has a rough time ahead. It will be even harder now to get people on the bandwagon, and the federal government will likely increase its efforts to control it. But it should be a big wake-up call to investors to be warier of technological allure. This crypto implosion will not be the last to burn investors, but by learning lessons from it, we can better avoid this kind of massive damage the next time.
It has become increasingly popular to plan for early retirement. Specifically among younger people. According to a CNBC Make It: Your Money survey in partnership with Momentive, nearly 30% of millennials and 25% of Gen Zers expect to need $1 million or more to retire comfortably.
Additionally, according to Fidelity Investments, retirement can last as long as 25 years.
Of course, meeting this financial goal when 55% of working Americans claim that they are behind on their retirement savings seems impossible. However, don’t get too frustrated if you believe that you’ll never be able to retire early. There’s no reason why you can’t retire at 50, 55, or 60 and have plenty of time left in life to enjoy new experiences. In order to succeed, though, you need to plan carefully and have a strong will.
1. Ask the same questions as your CFP® would.
As a CFP®, there are so many questions that I have before giving you the green light to retire early. These questions include:
What are your Social Security benefits going to look like?
Do you have any debt in retirement?
How much do you need to cover your expenses?
Do you know exactly how much you’ll need to live on per month?
What is your health like? Do you know the medical history of your family?
Why ask these questions? In my experience, I’ve seen people retire early when they’ve planned well ahead. All projections have been made. Sometimes things go wrong and there’s an emergency, whether it’s a medical one or repairing your car. As a result, they are forced to take money out of their retirement accounts.
Another problem? Underestimating retirement expenses. It’s not for the health stuff either. It’s for selfish reasons. In fairness, I don’t mean selfish in a negative way. You’re probably going to take your family on vacation, buy the latest iPhone, make home improvements, or go out to dinner.
You might burn through your retirement budget if you ignore any of these factors.
2. Work with a professional.
When it comes to meeting your financial goals, a good professional can make all the difference. In order to retire early, people must be able to save and invest properly, and most beneficiaries of proper guidance can greatly benefit from it. And, in particular, I’m talking about a CFP®.
You can start by visiting cfp.net. Click on find a CFP professional at the top and then enter your zip code to find a CFP professional near you. You can do this on your phone as well.
Keep in mind that you’ll have to meet certain minimums. You may not be able to work with some investment firms if you don’t have a million dollars, for example. So, I suggest picking two or three that seem to fit with your goals and seem to fit well with your style.
Ideally, you should work with a retirement planning specialist. Specifically, someone knowledgeable about income distribution. Their mission is to help you create a retirement income stream that will last for the rest of your life.
3. Use a retirement calculator.
To get an idea of how much you’ll need to save, invest, or diversify to have a steady retirement income, there are several online retirement calculators available. There are many free and easy-to-use calculators available online.
You just need to enter some basic information into the calculator. A few examples would be your annual income and the age at which you plan to retire. After you input these numbers, the calculator crunches them to provide you with a few suggestions about your retirement planning.
While a retirement savings calculator can help you estimate your retirement income needs, it often makes assumptions. It is hard to predict expenses, especially health care costs, and these calculators don’t account for retirees’ ability to adjust to changes in their lives. Rather than draining your savings to cover higher medical expenses one year, you may choose to make cuts elsewhere.
Likewise, the market is beyond your control. It’s impossible to predict what the stock market will do from year to year over a long enough period of time. And, equity returns are just guesses based on historical averages.
If you are not comfortable with retirement savings calculators, Vanguard provides a tool on its website that generates ranges of possible outcomes and probabilities based on your current retirement savings. By running multiple simulations of your inputs and measuring the frequency of each outcome, a Monte Carlo simulation approximates the probability of certain outcomes.
4. Start saving as early as possible.
In order to prepare for early retirement, you must also begin saving very early. If you get started sooner, you’ll have to put less effort into it.
As an example, let’s take a look at how it works.
Say you want to retire at 55 and need $1 million. It is estimated that you will earn $100,000 per year between now and retirement.
An average annual rate of return of 7% can be achieved by investing in a blended portfolio of stocks and bonds.
At 25 years old, you can save 11% of your salary and reach your goal.
If you are 30 years old, you will need to save 16% of your income.
You’ll have 20 years to save by the time you reach 35, and the rate will rise to 25% by then.
With 15 years to go, you will need to save 40% when you are 40.
You probably won’t be able to retire at 55 if you’re over 40 and starting from zero. It’d require you to save at least 100% of your income.
5. Put more money away than anyone else.
Typically, people believe that if they save 10% or 15% of their income, they can retire. If you plan to retire at 55 or even 60 and have 35 or 40 years to invest and save, that may be true.
Saving more money at 50 is necessary if you’re serious about retiring at 50. Your savings might be as much as 20% of your income, or maybe even 25% or 30%. If you intend to retire at 50, you will have to save 40% to 50% of your income if you are older than 25 or 30.
Saving 20% is a good place to start.
Instead of spending the extra money from every pay rise or promotion, put it into your savings. Eventually, you should be able to increase your savings rate to 30% or even higher after a few years of steady pay increases.
You accomplish two very important goals by saving such a large percentage of your income:
You can achieve your savings goals more quickly with this method.
Moreover, it teaches you how to survive on less than you make
When you retire, that second point will be extremely important. Retirement will be quicker and more effective if you have less money to live on now.
6. Cultivate multiple income streams.
Rather than relying only on your ability to build up a massive nest egg to get you to retirement, consider cultivating multiple income streams, suggests Miranda Marquit in an article for Good Financial Cents. You should instead plan to pay off your debt (including your mortgage) by the time you plan to retire early.
“Try to rid yourself of as many obligations as possible, so that you will have fewer expenses during retirement,” Miranda adds. As you prepare for the future, make a plan to pay off this debt. “Figure out how much money you will need each month to support your retirement lifestyle and then begin cultivating different income streams to create that income.”
“While there are rules that allow you to begin withdrawing from an IRA early, you likely won’t have access to Social Security benefits during an early retirement,” says Miranda. If necessary, consider early withdrawals from an IRA, but consider other sources of income as well, such as:
There are residual income opportunities associated with websites.
Royalties can be generated by books or educational content.
Start a business that will earn you money.
You might want to consider income investing.
“It is, of course, possible to cultivate a number of income streams at once, diversifying your income sources,” Miranda advises. “Start now to develop these streams so that they are established and mostly automatic by the time you are ready for early retirement.”
7. Aggressively invest.
It’s pretty much necessary to have a high-risk tolerance when saving for early retirement. If you invest in safe assets, such as certificates of deposit, you won’t reach your goal.
There may be some safe assets you can own, but the majority will need to be riskier investments. In addition to stocks, these include mutual funds and exchange-traded funds (ETFs).
Real estate investment trusts (REITS) may also be included since they often produce returns comparable to stock returns. Ultimately, you’ll have to invest heavily in assets carrying a high level of risk. This may result in a loss of some of your investment.
It is possible to lose money on a stock portfolio at any time. There is even a possibility that you might lose money for two or more years consecutively. That will require some preparation on your part.
In the long run, though, risk assets are a good investment.
A single investment can lose money in a given year, but multi-year investments provide the best returns.
The good news? The numbers work in your favor. Over the past 90 years, the stock market has returned an average of between 9% and 11%.
Do you really want to be aggressive? Invest everything in stocks. You should be able to earn around 10% per year over the course of 20 or 30 years.
If you prefer to play it a little safer, an allocation of 90% stocks will reduce your return to 9%, and an allocation of 80% will bring it to 8%.
The returns on either are, however, still solid. This is particularly true if you invest most of your money in tax-sheltered retirement accounts.
Again. aggressive investing comes with some risk. So you should choose a dependable investment platform. For those of you who are ready to retire early, here are my top picks:
Ally Invest. In addition to Ally Invest’s self-directed investing options, you can also use its robo-advisor to manage your account professionally. To begin with, Ally helps you identify your level of risk tolerance, where you can select “Aggressive growth” and invest primarily in stocks. Investing with Ally Invest is easy with low trading fees, 24/7 customer service, and professionally managed portfolios.
Betterment. With Betterment, investors have the option of using a robo-adviser to fully automate their investment processes. With RetireGuide, you can maximize your returns by harvesting tax losses and meet your retirement goals. To help you reach your goals, the service automatically rebalances your portfolio. There are no trade fees or annual management fees as well.
M1 Finance. The focus at M1 is on helping you reach your investment goals rather than assessing your risk tolerance. The M1 Finance investment “pie” is made up of 60 ETFs and stocks, and you can choose from 60 pie designs. M1 rebalances your account as necessary, managing your investments. Investing aggressively for early retirement is a great idea with M1, since it offers free trading and account management.
8. Make sure your retirement savings are maximized.
Early retirement planning is hampered by taxes, which are under-estimated obstacles. Taxes not only reduce your income but also decrease your investment returns.
Suppose you earn 10% on your investments, but your tax bracket is 30%, meaning you will only receive 7% in net returns. Consequently, you will have a slower capital accumulation rate.
It is possible, at least partially, to overcome that problem. Contribute as much as you can to your tax-sheltered retirement account.
By doing so, you’ll lower your taxable income from your job. In addition to protecting your investment earnings, you will also receive a 10% return on your portfolio.
The maximum contribution you are allowed to make to your 401(k) plan should be made by you if your employer offers one. A total of $22,500 would be available each year. You may be able to get a matching contribution from your employer.
Additionally, you should contribute to a traditional IRA, even if the contributions won’t be tax-deductible. If you set up a tax-deferred investment account, you can invest and accumulate profits tax-deferred.
In terms of early retirement, there’s a basic problem with retirement savings. When you withdraw from your retirement accounts before you’re 59 ½, you’ll be subject to both income taxes and capital gains taxes.
However, Roth IRAs can solve this problem.
9. Construct a Roth IRA Conversion “Ladder”
A Roth IRA doesn’t require you to contribute every year to get its benefits. You can convert other retirement accounts, like 401(k)s and traditional IRAs, to a Roth IRA. It’s another good reason to max out your retirement savings — especially if you’re planning on retiring before 60.
When you’re 59 1/2 and have been in the Roth IRA for at least five years, you can withdraw money tax-free from it. There’s also a provision for tax-free withdrawals before age 59 ½.
This is where Roth conversion ladders come in. You can convert money from an IRA, 401(k) or 403(b) into a Roth IRA.
Withdrawals are tax-free once they are made.
You can take withdrawals tax-free and penalty-free from Roth IRA contributions or conversion balances. They’re called Roth IRA withdrawal ordering rules.
According to those rules, Roth IRAs can only withdraw contributions or converted balances first. After those are taken, investment earnings can be withdrawn.
If you want to avoid the 10% penalty, you have to be in the Roth for at least five years. It’s here where the Roth conversion ladder comes in.
For early retirement, you can create a tax-free income source by making annual conversions starting five years before withdrawals are needed.
If you’re planning to retire early the strategy works great.
Because the ladder covers just five years until you can start taking regular withdrawals from your other retirement accounts penalty-free at age 59 ½. it’s perfect for early retirees.
10. Avoid additional debt.
If you do not manage your debt properly, it can undo all of your efforts to retire early. As an example, the fact that you have $500,000 in savings but $100,000 in debt of varying types will do you little good when you reach 50.
Additionally, debt comes with monthly payments that erode your net worth. At 50 you’ll want to retire with as few of those as possible.
Even better? Debt-free living should be the goal.
In order to be debt-free, you need to include your mortgage if you have or plan to have a mortgage. If you plan to retire early, you should include a sub-plan for paying off your mortgage before you do so.
11. Live beneath your means.
Living below your means is one financial habit you’ll need to develop. So if you make a dollar after taxes, you’d have to live on 70 cents and bank the remainder.
I know it’s difficult to get into that pattern if you’ve never done it before, but it’s vital. After all, early retirement will just be a pipe dream unless you master it.
You’ll need to adopt a few strategies to live within your means:
Try to spend as minimally as possible on your basic living expenses, mainly housing.
Consider driving an older, less expensive car instead of a new one.
When buying food, clothing, repairs, insurance, or anything else, be proactive about finding bargains and coupons.
You shouldn’t combine early retirement planning with the good life, especially when it comes to vacations and traveling.
Eat out rarely – it’s a surefire way to sabotage your long-term goals
Having extra money for savings is better than having it go to living expenses.
12. Don’t forget about the 72(t) rule.
When you take “Substantially Equal Periodic Payments” (SEPPs) from your qualified accounts (such as 401(k), IRA, Roth IRA, etc.) before age 59 ½, you are not subject to the 10% penalty rule. It’s also known as the “72(t) exception.”
To stay within SEPP rules, you can choose one of three different methods:
Compared to the other two methods, the required minimum distribution option generates a lower initial withdrawal.
The fixed annuitization method.
The fixed amortization method.
Based on your life expectancy and a permitted interest rate, the fixed amortization method determines your annual payment. The IRS recently made changes that have increased the amount that can be withheld without incurring the 10% penalty, so this calculation offers a significant increase.
Why?
Prior to the IRS’s changes, “reasonable interest rates” were calculated using low-interest rates tables published monthly. In December 2022, the rate was 1.52%. Now that the new ruling is in place, the floor rate is 5%. If one wishes to maximize the amount of money they can withdraw penalty-free each year before 5912, this offer is much more appealing.
If you decide how much money you want to withdraw, you have to stick with that method for five years or until you turn 5912. A one-time switch to the RMD method, usually resulting in a smaller payment, is the only exception. You might find this useful if you decide to go back to work and no longer wish to maximize your withdrawals.
Frequently Asked Questions About Early Retirement
Is my budget well-defined?
Instead of estimating your monthly expenses, it’s recommended that you calculate them. Consider this question: “Am I clear about how much money I need to live comfortably on? “
Knowing how much money you’ll need for retirement can help you determine if your savings will last.
What impact will this have on my Social Security benefits?
As early as age 62, you can begin receiving Social Security retirement benefits, but your benefits could be reduced by up to 30 percent.
Depending on when you were born, you may be able to receive benefits before you reach full retirement age, which can range from 65 to 67.
What sources of retirement income will I have?
Working part-time and taking Social Security will reduce your benefits if you earn too much money. In addition, determine which retirement accounts you need to withdraw money from first in order to avoid tax penalties.
Do I still have health insurance?
Medicare kicks in at 65, so find out if your employer can provide health insurance during the interim, or if you’ll need private coverage.
Can I retire on $1 million?
Although it is possible to retire on a million dollars, it won’t be easy. In order to ensure that your savings don’t outlive you, you should carefully budget and invest your money. If you plan carefully, you can retire on $1 million comfortably. Despite this, if you do not take care of your finances in retirement, you may struggle.
Having a nest egg that size is necessary to retire with $1 million. To reach your savings goal, you will need to continue saving and working until you reach it. You can start planning your retirement once you have reached your goal.
When planning for retirement, there are a few things to keep in mind. The first thing you need to do is make sure you have enough money saved to cover your expenses. Living expenses, healthcare costs, and other retirement expenses all fall under this category.
Considering your income needs in retirement would also be helpful. Having enough income will allow you to cover your basic living expenses and still have a little left over to enjoy leisure activities and other pursuits.
Last but not least, consider how you may generate income after retirement. Consider part-time work or other income sources, such as pensions or investment earnings, if you need to continue working.
With the growing adoption and expanding Internet of things (IoT) market globally, the internet industry is well-positioned to soar. Given its solid financials and growth potential, it could be wise to invest in Shutterstock (SSTK) in the internet space. However, Shopify (SHOP) and DoorDash (DASH) might be best avoided now because of their weak fundamentals. Read more….
The internet is undeniably one of the most vital innovations, as it allows a wide exchange of information and ideas and connects people globally. The internet industry gained immense traction during the pandemic as conditions compelled businesses to operate remotely.
According to DataReportal, a total of 5.16 billion people around the world use the internet at the start of 2023, equating to 64.4% of the world’s total population. Moreover, current trends indicate that two-thirds of the global population should be online by the end of this year.
Further, the Internet of Things (IoT) is believed to be the next wave as it is building intelligent communication environments and leading to real-time analytics, more efficient operations, and predictive capabilities. The global IoT market size is projected to reach $650.50 billion by 2026, growing at a CAGR of 16.7%.
Increasing adoption of smartphones and other advanced gadgets, rising investments in cloud-based services, and emerging 5G technology to help IoT adoption are driving the internet industry’s growth.
However, the technology sector suffered a blood bath last year, and several stocks faced heavy losses. Record-high inflation compelled the Fed to turn ultra-hawkish with a tight monetary policy. The tech-heavy Nasdaq Composite index is down 15.2% over the past year.
With innovations unfolding daily, some internet stocks are well-positioned to soar, while others may struggle to stay afloat amid the macroeconomic headwinds.
Given this backdrop, investors could buy fundamentally sound Shutterstock, Inc. (SSTK) hand over fist right now. At the same time, due to weak fundamentals and bleak growth prospects, Shopify Inc. (SHOP) and DoorDash, Inc. (DASH) might be best avoided.
SSTK is a technology company that provides quality content and creative workflow solutions internationally. It offers image services consisting of photographs, vectors, and illustrations used in visual communications. SSTK provides services under the Shutterstock, Bigstock, Offset, TurboSquid, and PremiumBeat brands.
On January 31, 2023, the company announced a dividend of $0.27 per share of outstanding common stock, representing an increase of 13% over the previous quarter. This dividend is payable on March 16, 2023. SSTK’s four-year average dividend yield is 1.69%, and its forward annual dividend of $1.08 translates to a 1.41% yield on the current price level.
On January 25, SSTK launched a generative AI to its all-in-one creative platform. The text-to-image technology converts prompts into larger-than-life, ethically created visuals ready for licensing.
Chief Executive Officer at SSTK, Paul Hennessy, said, “Shutterstock has developed strategic partnerships over the past two years with key industry players like OpenAI, Meta, and LG AI Research to fuel their generative AI research efforts, and we are now able to uniquely bring responsibly-produced generative AI capabilities to our own customers.”
SSTK’s revenue increased 5% year-over-year to $204.09 million in the third quarter that ended September 30, 2022. The company’s adjusted net income was $36.17 million, representing a 37.2% year-over-year increase, while its adjusted EPS came in at $1, up 42.9% year-over-year. Also, its adjusted EBITDA grew 26.2% from the prior-year quarter to $56.03 million.
Analysts expect SSTK’s EPS to increase 25.1% year-over-year to $0.96 for the quarter that ended on December 31, 2022. It surpassed the consensus EPS estimates in three of the trailing four quarters. Its revenue is expected to be $202.43 million in the first quarter (ending March 31, 2023), representing a 1.7% year-over-year rise.
Shares of SSTK have gained 69.1% over the past three months to close the last trading session at $77.63.
SSTK’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has a B grade for Quality. SSTK is ranked #3 out of 29 stocks within the Internet – Services industry. To see SSTK’s ratings for Growth, Value, Momentum, Stability, and Sentiment, click here.
Headquartered in Ottawa, Canada, SHOP is a cloud-based, multi-channel commerce platform that offers subscription and merchant solutions to small and medium-sized businesses. Its platform enables merchants to display, manage, market, and sell their products through various sales channels.
In the fiscal third quarter (ended September 30, 2022), SHOP’s operating expenses increased 64.4% year-over-year to $1.01 billion. Its operating loss widened significantly from the previous year’s quarter to $345.37 million.
The company’s net loss and loss per share attributable to common shareholders amounted to $158.41 million and $0.12, compared to a net income and EPS of $1.15 billion and $0.90 from the prior-year period, respectively.
In terms of forward EV/Sales and Price/Sales, SHOP is trading at 11.55x and 12.21x, 281.6% and 296.8% higher than the industry averages of 3.03x and 3.08x, respectively. Also, its forward Price/Book multiple of 7.85 compares to the industry average of 4.26.
Analysts expect SHOP’s EPS for the fiscal year 2022 to remain negative. The stock has declined 41.1% over the past year to close the last trading session at $51.57.
SHOP’s POWR Ratings reflect this bleak outlook. The stock has an overall rating of D, which translates to Sell in our proprietary rating system.
It has a D grade for Value, Stability, and Quality. It is ranked #27 out of 29 stocks in the same industry. Click here to see the additional ratings of SHOP (Growth, Momentum, and Sentiment).
DASH engages in providing a local logistics platform that connects merchants, consumers, and dashers. Its operations include DoorDash marketplace, DoorDash Drive, and DoorDash Storefront.
In the third quarter that ended September 30, 2022, DASH’s total cost and expenses increased 46.1% year-over-year to $2.01 billion. Its loss from operations and attributable net loss widened 208% and 192.1% year-over-year to $308 million and $295 million, respectively. The company’s loss per share amounted to $0.77, up 156.7% year-over-year.
In terms of forward non-GAAP P/E, DASH is trading at 621.41x, significantly higher than the industry average of 15.06x. The stock’s forward EV/EBITDA multiple of 54.77 is 439.6% higher than the industry average of 10.15. Also, its forward Price/Cash Flow multiple of 47.81 compares to the industry average of 11.74.
The consensus EPS estimate of $0.10 for the fiscal year 2022 (ended December 31, 2022) represents a 72.7% decrease from the prior-year period. Over the past year, the stock has lost 39.4% to close the last trading day at $59.68.
DASH’s weak fundamentals are reflected in its POWR Ratings. It has an overall rating of D, equating to Sell in our proprietary rating system.
It has a D grade for Growth, Stability, and Sentiment. Within the same industry, it is ranked #26. Click here to see other ratings of DASH for Value, Momentum, and Quality.
Consider This Before Placing Your Next Trade…
We are still in the midst of a bear market.
Yes, some special stocks may go up. But most will tumble as the bear market claws ever lower.
That is why you need to discover the brand new “Stock Trading Plan for 2023” created by 40-year investment veteran Steve Reitmeister. There he explains:
Why it’s still a bear market
How low stocks will go
9 simple trades to profit on the way down
Bonus: 2 trades with 100%+ upside when the bull market returns
You owe it to yourself to watch this timely presentation before placing your next trade.
SSTK shares were unchanged in premarket trading Tuesday. Year-to-date, SSTK has gained 47.25%, versus a 7.16% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta’s profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
January’s robust job report is raising concerns about how long the Fed will keep interest rates high. Market experts are now expecting a higher terminal interest rate. As uncertainty clouds over, quality stocks Gilead Sciences (GILD), Valero Energy (VLO), and ARC Document (ARC) that pay stable dividends might be ideal buys for 2023. Read on.
While the stock market witnessed a solid start to this year, surprisingly strong jobs data is raising concerns about aggressive Federal Reserve action. U.S. job growth accelerated sharply in January, with nonfarm payrolls surging by 517,000 jobs, well above the estimate of 185,000. The unemployment rate hit a more than 50-year low of 3.4%.
According to Morgan Stanley’s latest research note, the Federal Reserve will likely raise interest rates by another 25 basis points at the March policy meeting. The firm also raised the peak Fed funds rate to 4.875% from a previous estimate of 4.75% and sees the first rate cut in December 2023.
Moreover, Reuters markets analyst John Kemp said in a column that US manufacturers “probably entered a recession” in the fourth quarter of last year, based on the new results of the monthly Institute for Supply Management Report.
While the manufacturing industry has avoided widespread layoffs thus far, Kemp attributed this in part to “labor hoarding,” or a hesitancy from businesses to let workers go after having a difficult time attracting labor over the prior year.
As uncertainty is expected to remain, stocks that offer high and stable dividends, Gilead Sciences, Inc. (GILD), Valero Energy Corporation (VLO), and ARC Document Solutions, Inc. (ARC), might be ideal buys for 2023.
GILD, a biopharmaceutical company, discovers, develops, and commercializes medicines in the areas of unmet medical need in the United States, Europe, and internationally.
On February 03, GILD announced the U.S. Food and Drug Administration (FDA) had approved Trodelvy for the treatment of adult patients’ breast cancer who have received endocrine-based therapy and at least two additional systemic therapies in the metastatic setting.
Trodelvy is also recommended as a Category 1, preferred treatment for metastatic HR+/HER2- breast cancer by the National Comprehensive Cancer Network(NCCN) as defined in the Clinical Practice Guidelines in Oncology. This marks a significant achievement for the company.
On February 02, GILD announced an increase of 2.7% in the company’s quarterly cash dividend, resulting in a quarterly dividend of $0.75 per share of common stock, payable on March 30.
GILD pays $3.00 annually as dividends. This translates to a yield of 3.55% at the current price, compared to the 4-year average dividend yield of 4.00%. Its dividend payments have grown at a CAGR of 5% and 7% over the past three and five years, respectively. Also, it has paid dividends for seven consecutive years.
GILD’s total revenues increased 2% year-over-year to $7.39 billion in the fourth quarter, which ended December 31, 2022. The company’s non-GAAP net income increased 143.2% year-over-year to $2.11 billion, while non-GAAP EPS rose 142% year-over-year to $1.67.
Analysts expect GILD’s revenue for the fiscal second quarter ending June 2023 to be $6.48 billion, indicating a 3.6% year-over-year growth. The company’s EPS is expected to increase 8.3% from the prior-year quarter to $1.71 for the same quarter. Additionally, it has topped consensus revenue and EPS estimates in each of the trailing four quarters, which is impressive.
The stock has gained 41.2% over the past nine months to close the last trading session at $86.36.
GILD’s POWR Ratings reflect its promising outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
GILD also has an A grade for Value and B for Quality. It is ranked #5 of 401 stocks in the Biotech industry.
To access additional ratings for GILD’s Growth, Stability, Sentiment, and Momentum, click here.
VLO manufactures, markets, and sells transportation fuels and petrochemical products in the United States, Canada, the United Kingdom, Ireland, and internationally. The company operates through three segments: Refining; Renewable Diesel; and Ethanol.
On January 31, VLO and Darling Ingredients Inc. (DAR) announced that the companies had made the final investment decision on a Sustainable Aviation Fuel (SAF) project at the Diamond Green Diesel (DGD) Port Arthur plant, which is owned and operated by Diamond Green Diesel Holdings LLC, a 50/50 joint venture between VLO and DAR.
With the completion of this project, DGD port is expected to be one of the largest SAF manufacturers in the world.
On January 31, VLO announced an increase in the company’s regular quarterly cash dividend on common stock from $0.98 per share to $1.02 per share. The dividend is payable on March 16.
VLO pays a $4.08 per share dividend annually, which translates to a 3.10% yield on the current price. Its dividend payments have grown at a CAGR of 2.9% and 7% over the past three and five years. The company has a four-year average dividend yield of 5.03%. Also, it has paid dividends for 25 consecutive years.
For the fiscal fourth quarter ended December 31, 2022, VLO’s revenue increased 16.3% year-over-year to $41.75 billion. Adjusted net income attributable to VLO grew 227% year-over-year to $3.23 billion, while its adjusted EPS increased 250.6% year-over-year to $8.45.
VLO’s revenue is expected to rise 2.1% year-over-year to $39.34 billion for the current quarter ending March 2023. The company’s EPS for the same quarter is expected to increase 184% year-over-year to $6.56.
Shares of VLO have gained 22% over the past six months to close the last trading session at $128.09.
VLO’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.
The stock has an A grade for Momentum and a B for Growth, Quality, and Value. Within the B-rated Energy – Oil & Gas industry, it is ranked #4 out of 93 stocks.
Beyond what is stated above, we’ve also rated VLO for Stability and Sentiment. Get all VLO ratings here.
ARC, a digital printing company, provides digital printing and document-related services in the United States. It provides managed print services that places, manages, and optimizes print and imaging equipment in customers’ offices, job sites, and other facilities; and cloud-based document management software and other digital hosting services.
On December 8, 2022, ARC declared a quarterly cash dividend of $0.05 per share, payable February 28. The company pays a $0.20 dividend annually, which translates to a yield of 5.87% at the current price, higher than the 4-year average dividend yield of 2.17%.
ARC’s net sales rose marginally year-over-year to $73.14 million in the third quarter that ended September 30, 2022. The company’s adjusted EPS increased 12.5% year-over-year to $0.09, while its adjusted net income increased 15.6% year-over-year to $3.70 million.
The stock has gained 39.6% over the past three months to close the last trading session at $3.63.
ARC’s robust prospect is reflected in its POWR Ratings. The stock has an overall A rating, equating to a Strong Buy in our proprietary rating system.
ARC has an A grade for Value, Sentiment, and Quality. It is ranked first among 42 stocks in the B-rated Outsourcing – Business Services industry.
Click here to see the additional POWR Ratings for ARC (Growth, Momentum, and Stability).
Consider This Before Placing Your Next Trade…
We are still in the midst of a bear market.
Yes, some special stocks may go up. But most will tumble as the bear market claws ever lower.
That is why you need to discover the brand new “Stock Trading Plan for 2023” created by 40-year investment veteran Steve Reitmeister. There he explains:
Why it’s still a bear market
How low stocks will go
9 simple trades to profit on the way down
Bonus: 2 trades with 100%+ upside when the bull market returns
You owe it to yourself to watch this timely presentation before placing your next trade.
GILD shares . Year-to-date, GILD has gained 0.59%, versus a 7.16% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor’s degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
On Wednesday, the Federal Reserve announced a 25-basis point rate hike, a smaller increase than what we grew accustomed to in 2022. Inflation appeared to be moving back into a controlled place. The S&P 500 (SPY) cheered and continued to rally, leading to one of the strongest starts to the year that we’ve seen in… well, years. And then suddenly… a jobs report threw all of that into question. But does it mean the end of our 2023 rally? Read more to find out.
(Please enjoy this updated version of my weekly commentary originally published February 3rd, 2023 in the POWR Stocks Under $10 newsletter).
Market Commentary
On Wednesday, Fed Chair Jerome Powell announced that the central bank was hiking rates by 0.25%, or 25 basis points.
No real surprise there; literally everyone was expecting that. (And truly, I mean everyone. According to the CME FedWatch tool, more than 99% of traders were predicting a 25-basis point hike.)
In my message to subscribers to my POWR Growth service, I wrote that I was expecting one of two scenarios:
1) The Fed shows a few slightly dovish cards, giving investors the greenlight to buy.
2) The Fed doubles down on their previous messaging — “pain,” “more work to be done,” and “ongoing increases” — and the market tumbles.
At the start of Powell’s press conference, I thought we were heading for scenario No. 2.
Within the first few minutes, he had already trotted out the messages that there was “more work to be done,” there would be “ongoing increases,” and that the Fed expected they would have to “keep rates higher for longer.”
But then everything got a bit more moderate, and Powell seemed decidedly less hawkish. Especially during the question-and-answer session.
As the various journalists tried to get Powell to commit to more details of how the Fed is viewing the economy and what they may do if labor stays strong (or some other hypothetical scenario), he let a little more of his dovish side show, saying how the Fed was pleased with the slowdown they’re seeing in inflation and that they would at least consider any data that implied inflation had finally succumbed to their restrictive monetary policy.
In other words, he gave the bulls just enough wiggle room to interpret his message as an attempt to walk back his ultra hawkish statements from 2022.
At one point during the questions, I even said to StockNews CEO Steve Reitmeister, “I think the market closes up today.” And just as expected, it did. In fact, the stock market (SPY) climbed nearly 3% from the start of Powell’s Feb. 1 press conference to this morning’s job numbers…
Which brings me to today’s job numbers. Even though a number of metrics seemed to be showing classic signs that the economy had started to cool off, more than half a million jobs were added to the U.S. economy in January.
That’s significantly higher than the Wall Street estimate for 187,000 new jobs. It also pushed unemployment down to 3.4%, the lowest it’s been in more than 50 years.
Being a day behind schedule did give me the opportunity to digest this surprising report.
It’s especially important to consider because the Fed has made it clear that they’re worried about an overly tight labor market driving up wages and making it hard to cut down inflation. It seems that no matter what the central bank does, jobs remain resilient.
It’s too early to say exactly what this means. The market reacted by selling off 1%, although the week still closed up 1.6%. We won’t know exactly how much this will change the Fed’s current trajectory until they start addressing it at their local rotary club speeches.
Even so, things are certainly looking better than they were at the end of last year. The market has been rallying for multiple weeks now.
And we’ve definitely broken out above the 200-day moving average, which is an important technical indicator and a sign that the market is moving toward “risk on.”
But if inflation starts to rear its ugly head… or even if Powell and the rest of the Fed simply start to worry that their efforts aren’t having as much of an impact as they’d expect… we could be in for another serious round of rate hikes.
Powell is a big fan of the late Fed Chair Paul Volcker, who is best known for ruthlessly driving the sky-high inflation of the 1980s into the ground… and causing a recession.
And while Powell is obviously striving to do a better job of threading the needle and giving us the soft landing everyone is hoping for, he’s going to do what has to be done to keep inflation trending lower.
So, what do we do now?
Whether or not this is actually a bull or bear rally, the bulls are clearly running the show right now. Even after today’s shockingly strong jobs report, traders are still pricing in rate cuts before the end of the year. (They just moved the cut forecast back a few months… from September to November.)
And remember, Powell has still not actually said that the central bank is planning to start cutting rates at any point in 2023, just that “if we do see inflation coming down more quickly then that will play into our views.”
But the market feels very confident we’ll see at least one and maybe even TWO cuts by the end of this year.
In my heart of hearts, I truly believe we have one more leg lower in store before we enter the next true bull market. I know we can’t take the Fed’s language at face value… but, right now, it feels like investors are outright ignoring it.
You know, maybe we should wait for a few more signs that inflation is on the ropes before buying up crypto and tech stocks and other riskier assets. Maybe we’re all getting a little too ahead of ourselves… and maybe the rally is, too.
Even so, there’s no point in sitting on the sidelines forever while we wait for a reality check that may never come. That’s a great way not to make money. Especially when there are amazing stocks under $10 that are delivering massive gains in just weeks.
Therefore, we’re going to continue moving into the bullish camp, just gradually. We don’t want to get caught off guard if there’s a sudden pullback. Unless we see a pullback or pause, I’ll look to start adding one new stock to our portfolio.
I also plan to start trimming stocks that are losing steam. This is exactly what we did earlier this week with Target Hospitality (TH), our 400% winner that I just sold out of the portfolio after it triggered our trade trigger.
Setting trade triggers like that is a smart way to make sure we don’t let our gains evaporate. Better to lock those gains in by selling after we see signs of weakness.
This will ensure we have a portfolio built on strength and not just stocks that were strong at one point but have since run out of gas.
Conclusion
I’m still a little skeptical about this rally, but I’m not going to fight the trend. However, we’re not just doing a cannonball into the deep end of the pool – we have a prudent and effective plan in place to carefully move into the market while the rally can help us.
What To Do Next?
If you’d like to see more top stocks under $10, then you should check out our free special report:
What gives these stocks the right stuff to become big winners, even in this brutal stock market?
First, because they are all low priced companies with the most upside potential in today’s volatile markets.
But even more important, is that they are all top Buy rated stocks according to our coveted POWR Ratings system and they excel in key areas of growth, sentiment and momentum.
Click below now to see these 3 exciting stocks which could double or more in the year ahead.
SPY shares closed at $412.35 on Friday, down $-4.43 (-1.06%). Year-to-date, SPY has gained 7.82%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Meredith Margrave
Meredith Margrave has been a noted financial expert and market commentator for the past two decades. She is currently the Editor of the POWR Growth and POWR Stocks Under $10 newsletters. Learn more about Meredith’s background, along with links to her most recent articles.
The stock market (SPY) is becoming more complicated by the day. Bulls make a good case given the recent rally. But so do the bears given the clear weakness in the economy pointing to recession. Who is right? And how best to trade the market in the weeks and months ahead? 40 year investment veteran Steve Reitmeister shares his balanced views in this fresh commentary below….
Why are so many investment experts still calling for a bear market?
And just as interesting…why are so many equally talented investors saying the new bull market is already here?
Because investing is an inexact science leading some to rely on economic data…while others prefer to read the charts…or the expression on Powell’s face… or astrology signs or….(fill in the blank with the nuttiest thing you can think of).
So what is an investor to do when there are so many well-reasoned opinions that are giving such contradictory conclusions?
That will be the focus of this week’s commentary.
Market Commentary
I believe the best way to tell this story is from a very personal place. That being where I have an Economics degree and most certainly diagnose the market from a fundamental point of view.
Early on in my career I used to make fun of chartist for playing the market like a video game instead of taking it more seriously with fundamentals. Yet that was quite foolish on my part as I have come to greatly respect many of the leading chartist like Kevin Matras of Zacks and JC Parets of AllStarCharts.com. There is simply no denying their keen insights on market direction.
Now let’s move the conversation forward to Wednesday’s Fed meeting. I was already bearish beforehand…as are the majority of market commentators at this time. And I became even more bearish after the announcement. Amazingly, others saw it differently as stocks 3% from the time of the speech into Thursday’s close.
I went to bad Wednesday night angry, confused, dejected, perplexed, and downright flummoxed.
But then something dawned on me in the early hours and could not get back to sleep. This led to the following trade alert that I sent out to Reitmeister Total Return members on Thursday morning.
I have edited it for the purposes of our conversation today and will follow it up with some additional notes.
[Trade Alert] Less Stubborn Steve
As you likely understood from last night’s commentary, there is no way for me to watch Chairman Powell’s speech yesterday and not be firmly bearish. Keeping hawkish policies in place through the end of the year + 12 months of lagged effects + very weak economic data at the moment = ample window to create recession w/ job loss and lower stock prices in the months ahead.
On the other hand, I want to share with you this conversation from a month ago that haunted me all night leading to this morning’s email. I was asked to provide an answer to the following question:
What’s one lesson you learned in 2022 that you’ll take with you into 2023?
To which I answered: “I finally got bearish in May with the market closer to 4,100. Earlier than most…but later than it needed to be if I focused on the clear break below the 200 day moving average in April around 4,500. Acknowledging that proven signal would have improved my results and will be mindful to heed that warning in the future.”
The only way to rectify these 2 opposing positions is to strike a middle ground. To become less bearish in our portfolio to enjoy more upside if the bulls are correct with their recent rally above the all important 200 day moving average.
Just as important is not becoming so bullish as to have the rug pulled from us on a future date when the economy could tip over into recession with stocks descending once again. The solution is to make the following trades that move us to 36% long the stock market from the previously 0% long bearish hedge.
…I could have accomplished the task with many different combinations of trades. So don’t spend too much time thinking about that. If you see another path to get to the same destination then take it. The key is that we are no longer totally bearish. We are now a shade bullish.
If the wisdom of the bull rally grows larger, we will keep ratcheting up our bullishness in the portfolio. Mostly with stocks with top POWR Ratings. Whereas, if we break back below the 200 day moving average, then we will get back in our defensive bearish hedge once again by selling (Risk On assets) and adding back appropriate inverse ETFs.
I absolutely can be a stubborn person with strong convictions. And it would be easy for me to remain bearish given the economic facts as I perceive them.
However, I am also open minded enough to realize when I am being a hypocrite and going against sound logic. (like ignoring the time tested benefits of 200 day moving average breakouts). That is why this is the prudent move that gives us plenty of flexibility to change in the future.
Heck, if the bear market started back in earnest this afternoon…then at only 36% long we would lose a lot less money than most. And as we crossed back over the 200 day moving average reverting back to our bearish hedge would have us producing profits as the market descended lower. That is not so bad for a “worst case” scenario.
However, if the wisdom of the crowd creating this rally is indeed correct, then we will be glad that we started to participate in the upside at this stage instead of much later.
In closing, I want to share this valuable lesson.
The investing world is rarely straight forward. That is why there are so many incredibly intelligent players who have well reasoned views that are 180 degrees opposite of each other. Thus, at its most confusing moments it is often wise to strike a balance as we are doing today.
It is better to be partially right than 100% wrong!
As time rolls on, and greater clarity emerges, it becomes easier to shift to the wisest course of action. For now, we will straddle the bullish and bearish camps by making the 3 trades above. No doubt there will be more trades to come.
Let’s stay nimble with our thoughts and swift with our actions.”
(End of 2/2/23 Reitmeister Total Return trade alert)
Taking back to the top…there are many sound opinions from a myriad of seasoned investors. In the end some will be right and others will be wrong.
Your challenge is to determine what to do now.
If you are like me…and realize there is competing sound logic, then you do not have to make a binary, yes/no decision. You can find a nuanced approach that provides appropriate balance.
Just remember you are not married to whatever approach you chose. That’s because your investment strategy should be ever evolving.
Not just about being bullish vs. bearish. But also considering if it is time for…
growth vs. value
large caps vs. small caps
what sectors are hot vs. which are not
I have looked in the mirror and made an appropriate change in my strategy. Time for you to do the same.
What To Do Next?
Watch my brand new presentation: “Stock Trading Plan for 2023” that will help you assess the full bull vs. bear case to create the right trading strategy. It covers vital topics such as…
Why 2023 is a “Jekyll & Hyde” year for stocks
How the Bear Market Could Come Back with a Vengeance
9 Trades to Profit Now
2 Trades with 100%+ Upside Potential as New Bull Emerges
SPY shares closed at $412.35 on Friday, down $-4.43 (-1.06%). Year-to-date, SPY has gained 7.82%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Steve Reitmeister
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.
Spire Wealth Management lowered its holdings in Aflac Incorporated (NYSE:AFL – Get Rating) by 64.1% during the third quarter, according to its most recent filing with the Securities & Exchange Commission. The fund owned 873 shares of the financial services provider’s stock after selling 1,562 shares during the quarter. Spire Wealth Management’s holdings in Aflac were worth $49,000 at the end of the most recent quarter.
A number of other hedge funds and other institutional investors have also recently added to or reduced their stakes in the business. Wells Fargo & Company MN grew its holdings in shares of Aflac by 0.6% during the 2nd quarter. Wells Fargo & Company MN now owns 16,300,968 shares of the financial services provider’s stock worth $901,933,000 after purchasing an additional 89,414 shares in the last quarter. Legal & General Group Plc grew its holdings in shares of Aflac by 3.5% during the 2nd quarter. Legal & General Group Plc now owns 5,755,915 shares of the financial services provider’s stock worth $318,476,000 after purchasing an additional 192,480 shares in the last quarter. Maj Invest Holding A S grew its holdings in shares of Aflac by 16.5% during the 3rd quarter. Maj Invest Holding A S now owns 5,061,371 shares of the financial services provider’s stock worth $325,902,000 after purchasing an additional 715,304 shares in the last quarter. Invesco Ltd. grew its holdings in shares of Aflac by 62.4% during the 1st quarter. Invesco Ltd. now owns 4,936,608 shares of the financial services provider’s stock worth $317,865,000 after purchasing an additional 1,897,212 shares in the last quarter. Finally, Charles Schwab Investment Management Inc. grew its holdings in shares of Aflac by 2.3% during the 1st quarter. Charles Schwab Investment Management Inc. now owns 3,286,052 shares of the financial services provider’s stock worth $211,590,000 after purchasing an additional 72,705 shares in the last quarter. Institutional investors and hedge funds own 66.22% of the company’s stock.
Analysts Set New Price Targets
Several brokerages have recently weighed in on AFL. Raymond James lifted their price objective on Aflac from $74.00 to $77.00 and gave the stock an “outperform” rating in a report on Monday, January 30th. Evercore ISI set a $66.00 price objective on Aflac in a research report on Thursday, November 17th. Morgan Stanley lifted their price objective on Aflac from $76.00 to $78.00 and gave the company an “overweight” rating in a research report on Thursday. JPMorgan Chase & Co. boosted their target price on Aflac from $62.00 to $66.00 and gave the stock a “neutral” rating in a research report on Friday, January 6th. Finally, Citigroup boosted their target price on Aflac from $61.00 to $70.00 in a research report on Wednesday, November 16th. Five analysts have rated the stock with a hold rating and three have given a buy rating to the stock. According to MarketBeat, Aflac currently has an average rating of “Hold” and an average price target of $71.00.
Insider Buying and Selling at Aflac
In other Aflac news, EVP Eric M. Kirsch sold 28,400 shares of the company’s stock in a transaction that occurred on Wednesday, November 16th. The stock was sold at an average price of $70.90, for a total value of $2,013,560.00. Following the sale, the executive vice president now owns 35,721 shares in the company, valued at $2,532,618.90. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. In other news, Director Toshihiko Fukuzawa sold 1,400 shares of the company’s stock in a transaction that occurred on Wednesday, November 16th. The stock was sold at an average price of $70.64, for a total value of $98,896.00. Following the transaction, the director now owns 10,258 shares of the company’s stock, valued at $724,625.12. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, EVP Eric M. Kirsch sold 28,400 shares of the stock in a transaction that occurred on Wednesday, November 16th. The stock was sold at an average price of $70.90, for a total value of $2,013,560.00. Following the sale, the executive vice president now directly owns 35,721 shares in the company, valued at approximately $2,532,618.90. The disclosure for this sale can be found here. Insiders have sold 57,388 shares of company stock worth $4,065,339 over the last 90 days. Company insiders own 1.10% of the company’s stock.
Aflac Stock Performance
AFL opened at $69.39 on Friday. Aflac Incorporated has a 52-week low of $52.07 and a 52-week high of $74.01. The firm has a market capitalization of $43.15 billion, a PE ratio of 10.48, a PEG ratio of 2.67 and a beta of 0.92. The company has a debt-to-equity ratio of 0.31, a quick ratio of 0.07 and a current ratio of 0.07. The business’s 50-day simple moving average is $71.59 and its 200 day simple moving average is $65.03.
Aflac (NYSE:AFL – Get Rating) last released its earnings results on Thursday, February 2nd. The financial services provider reported $1.29 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.21 by $0.08. Aflac had a return on equity of 13.14% and a net margin of 21.54%. The business had revenue of $4.01 billion for the quarter, compared to analyst estimates of $4.49 billion. During the same quarter in the prior year, the company posted $1.28 earnings per share. Aflac’s revenue was down 26.2% on a year-over-year basis. As a group, sell-side analysts expect that Aflac Incorporated will post 5.48 earnings per share for the current fiscal year.
Aflac Increases Dividend
The firm also recently disclosed a quarterly dividend, which will be paid on Wednesday, March 1st. Shareholders of record on Wednesday, February 15th will be paid a $0.42 dividend. This is a positive change from Aflac’s previous quarterly dividend of $0.40. The ex-dividend date is Tuesday, February 14th. This represents a $1.68 annualized dividend and a yield of 2.42%. Aflac’s dividend payout ratio is currently 24.35%.
Aflac announced that its Board of Directors has authorized a share buyback plan on Tuesday, November 8th that allows the company to repurchase 100,000,000 outstanding shares. This repurchase authorization allows the financial services provider to buy shares of its stock through open market purchases. Shares repurchase plans are generally an indication that the company’s board believes its stock is undervalued.
Aflac, Inc is a holding company. engages in the provision of financial protection services. It operates through the followings segments: Aflac Japan and Aflac United States (U.S.). The Aflac Japan segment offers life insurance, death benefits, and cash surrender values. The Aflac U.S. segment sells voluntary supplemental insurance products for people who already have major medical or primary insurance coverage.
Read More
Receive News & Ratings for Aflac Daily – Enter your email address below to receive a concise daily summary of the latest news and analysts’ ratings for Aflac and related companies with MarketBeat.com’s FREE daily email newsletter.
Aspiring entrepreneurs may need help to develop great business ideas, especially when it seems everyone has already taken all the good ones. Still, it’s possible to succeed by making old ideas or products better or giving them a new twist.
Taking the chance to open a business can be both exciting and hard to understand. About 90% of new businesses fail, and many reasons exist. It might seem like a scary number, but if your business followed a set of rules for growth, it could avoid being one of these companies.
The benefits of working for yourself can do the work of starting a business worth it. In addition to the freedom of being your boss, earning money and starting a business can make you happier at work and give you a better chance in life.
What Do You Need To Setup a Business?
Choosing a name for the business and making a logo are obvious steps, but what about the other measures that don’t get as much attention but are just as important? Whether you’re figuring out how to set up your business or making a detailed marketing plan, the work can quickly pile up. Follow this 10-step list instead of spinning your wheels and guessing where to start. It will help you turn your business idea from a lightbulb above your head into a real thing.
A Plan: Your business plan is a document that gives detailed information about your business and its short-term and long-term goals.
Business Name: You will call your business by your name on all official paperwork and licenses.
Structure of the business: The design of your business is how it will be run and who will own it.
Business Registration: When you register your business with the state, you get a license that lets your business run legally.
Legal Requirements: You may also need business licenses and permits besides registering your business.
Funding: Your funding comes from business grants, loans, and money you’ve saved up on your own.
Tips On How To Grow Your Startup
Think about doing the following to improve your business idea and set yourself up for success:
1- Do market research
An essential part of making a business plan is thorough market research on your field and the types of people who might be interested in it. It means doing surveys, focus groups, SEO research, and public data research.
Market research helps you learn about your ideal customer’s wants, needs, and habits and about your industry and competitors. Many people who work with small businesses suggest getting demographic data and doing a competitive analysis to learn more about the opportunities and limits in your market.
The best small businesses have products or services that differ from their competitors. It changes your competitive landscape in a big way and lets you show potential customers what makes you different.
3- Create a Powerful Team
With a strong workforce, a company could hope to attain sustained success. That’s why it’s essential to surround yourself with capable people who can help drive your company forward.
Managing your team isn’t just about making lists of things to do and dividing time. It depends on the size of your team and the type of work you do. You can combine different softwares like workforce software Monday, Scoro, Slack, etc., to improve teamwork and store important information about your projects, customers, tasks, and other tasks and resources.
Team members with the right mix of experience, dedication, and initiative are invaluable. Keep everyone on the same page so the plan can be implemented successfully.
3- Examine your financial institution
Every business has costs, so you need to figure out how to pay for them. Do you have the money to start your own business, or will you have to borrow it? If you want to leave your job to focus on your business, do you have enough money saved to live on until you start making money? Please find out how much it will cost to start your business.
Many new businesses fail because they need more money before making money. It’s always a good idea to overestimate how much money you need to start a business since it can take a while to start making enough money to keep going.
Carrying out a break-even study might help you estimate how much capital you’ll need. When a firm, product, or service starts making money is one of the most important financial planning questions owners may ask.
4- Consider financing
There are many ways to get the money you need to start your business. The best way to earn money for your business depends on things like how good your credit is, how much you need, and what other options you have.
Business loans. If you need help with money, a commercial loan from a bank is an excellent place to start, even though it can be hard to get.
Business grants. Business grants are like loans, but you don’t have to pay them back. Most business grants are very competitive, and the business must meet specific requirements to be considered. When looking for a small business grant, look for one that fits your needs. There are grants for businesses owned by minorities, grants for firms owned by women, and grants from the government.
Investors. Startups that need a lot of money immediately may want to find an investor. Investors can give a new business up to a million dollars or more, but they will want to be involved in how the business is run.
Crowdfunding. You could also start a crowdfunding campaign for equity to get smaller amounts of money from many backers. Crowdfunding has helped many businesses in the last few years, and dozens of good platforms exist for different kinds of companies.
5- Follow all applicable laws
Pick a legal structure and register your business. There are other steps you must take to ensure your company operates legally. For example, you may need to get licenses and permits for your business. Different industries have different licensing requirements. For example, if you want to start a construction company, you’ll need the proper construction permits.
6- Settle on a supplier
It can be challenging to run a company, and you and your team won’t be able to do everything independently. Third-party vendors help with this. From human resources to business phone systems, some companies want to work with you and help you run your business better.
When looking for B2B partners, you’ll need to be careful about who you choose. These companies will have access to essential and possibly sensitive business information, so finding someone you can trust is vital. In our guide to choosing business partners, our expert sources said to ask potential vendors about their experience in your industry, their track record with current clients, and what kind of growth they’ve helped other clients achieve.
7- Strong Brand Marketing
Before you start selling your product or service, you need to build up your brand and get a group of people ready to jump when you open your real or figurative doors for business.
Website of a company. Build a company website to spread your good name online. Customers often look up information about a business online; a website is digital proof that your small business is accurate. It’s also great to talk to customers and people who might become customers.
Use social media to get the word out about your new business. Once you open for business, you could use it as a marketing tool by giving followers coupons and discounts. How you should use social media will depend on who you want to reach.
The best CRM software lets you store information about your customers so you can market to them better. A well-planned email marketing campaign can help you reach customers and talk to your audience in significant ways. To be successful, you will need to build your email marketing contact list in a planned manner.
Make a logo that makes it easy for people to recognize your brand and use it consistently on all platforms.
8- Offer good customer service
Building a good name for your new business will help you stay in business longer. One of the best ways to do this is to show your customers the utmost respect and go out of your way to help them.
Customer service of high quality could make the difference between a customer never buying from your company again and a customer who buys from you again and again. Please take note of companies that have done well because they consistently show their customers how much they appreciate them.
Conclusion
As an entrepreneur, your launch and first sales are just the beginning of your work. To make money and stay in business, you must constantly work to grow your business. It will take time and work, but you’ll get back what you put into your business.
There is no perfect plan, but these tips will help you start your business and get it ready to grow. When you start a business, you’ll want to make sure you’ve thought of everything, but things will almost certainly go wrong. If you want to be a successful business, you have to be able to adjust to new situations.
The virtues of value investing were re-established in 2022 as growth stocks were mauled by the bear market taking on much more pain than the average S&P 500 (SPY) stock. Unfortunately, that shift in strategy exposes 3 fatal flaws that can also hamper investment results. This article will share a proven strategy that solves these 3 issues leading to vastly superior performance. Read on below for more….
Some people were starting to believe that value investing was dead.
Yes, that sounds extreme. However, for the bulk of the last several years the path to stock market success was paved with buying growth companies no matter how much momentum…no matter how high their nose bleed PE.
I am referring to every hot trend from Electric Vehicles to Cannabis to 3D Printers to Metaverse to (fill in the blank).
This growth only investment blueprint appeared to negate the virtue of classic value principles pioneered by Benjamin Graham (and his most famous pupil Warren Buffett) as these “in favor” investments have gravity defying multiples.
Then came along the bear market of 2022 where growth stocks were mauled to death (that is a fair description when you see the greater than 60% losses levied on the growth stock poster child Cathie Wood’s ARK Innovation ETF).
At the same time value stock strategies showed their virtue. Including our proprietary strategy that actually gained 9% on the year. More on that later.
The rise of value strategies in 2022 led many investors to flock back to this fundamentally sound investing approach.
Unfortunately, newcomers are more likely to fall victim to 3 fatal flaws:
Value Traps (where stocks head lower and lower)
Classic Value Metrics Don’t Work Anymore
Lack of Timeliness Deadens ROI
So, what’s the solution?
Please give me just a few minutes of your time so I can spell it out for you. This will put you in the best possible position to outperform in 2023.
This includes sharing details on our coveted Top 10 Value Stocks strategy that has scored an average +36.60% gain since 1999 (5.4x better than the S&P 500 over that stretch).
Let me first tell you more about this computer generated model. Then we will discuss how it solves all 3 of the fatal flaws of value investing.
That journey starts with a brief discussion of our quant ranking system; the POWR Ratings.
If you have spent any time on StockNews.com you have certainly seen information on our exclusive POWR Ratings system. Indeed, these ratings really do help investors gain a decided advantage over the market, as can clearly be seen in the performance chart below.
Where Does the Outperformance Come From?
The POWR Ratings model is the most complete review of a stock available to individual investors today. All in all, we look at 118 different factors of a stock before assigning an A to F rating.
Which 118 factors?
The simple answer is ONLY the ones that lead to more profitable stock selection. Truly this is like a DNA check of each stock getting down to the molecular level to appreciate the stocks built to outperform.
Once that analysis of the overall POWR Rating is done, we then break down those 118 factors into 6 additional grades to appreciate the virtue of a stock on the following dimensions:
Value
Growth
Momentum
Stability
Quality
Sentiment
For those quick on the draw, you probably just figured out that if you combine a strong overall POWR Rating with a healthy Value score, that you are well on your way to picking the best value stocks.
Gladly that process will get you going in the right direction.
Sadly you will still end up with a list of over 700 stocks to research.
That is not so bad if picking stocks is your full-time job. However, for most of you that is far too time consuming.
This led to an “Aha!” moment.
What if we could develop a strategy to unearth the 10 top value stocks at any time producing consistent outperformance?
So, we went back to the same Data Scientist who created the POWR Ratings and asked the seemingly impossible—could he turn up the volume on the value metrics and somehow exceed their already market beating returns?
After months of research and rigorous testing the Top 10 Value Stocks strategy was born.
Not only did we narrow to just 10 value stocks. But we also greatly increased performance to +36.60% per year since 1999.
The hallmark of this screen is a zealous focus on the 31 individual value factors that help to consistently discover the market’s best value stocks (and just as importantly, ignoring the 100’s of factors that actually don’t work at all!).
Combining those 31 unique value factors together in optimal fashion leads to uncovering this incredibly consistent winning strategy.
The Key Word is “Consistency”
That’s because the POWR Ratings also focuses on the consistency of growth. Not just earnings growth, but also improvements in revenue, profit margins and cash flow.
Then our rating model goes further into the Quality of a stock by drilling down on the main metrics that show the health of operations over time.
The steps noted above solve the #1 fatal flaw of value investing. That being how to avoid the value traps that are really just poorly run companies that go from bad to worse. The focus on Growth and Quality aspects are the best possible health checks to alleviate these problems.
Meaning that we look beyond the overly simplistic value measurements used in the past, allowing us to deliver to you the healthiest growing companies, that just so happen to be trading at attractive discount prices.
Next up we need to tackle the 2nd fatal flaw. Which is that most classic value metrics don’t work like they used to.
Consider this.
Computer driven trading now dominates the investment landscape. No longer is it seasoned investment managers making the decisions. Instead the vast majority of trades are run by these quant models.
This has been true for more than 10 years. And truly billions of dollars have been thrown at these quant models to squeeze out every last drop of profit hidden in shares.
So long ago these models tapped into the benefit of the typical value approaches like PE, Book Value, PEG, Price to Sales etc.
Now after years of high volume trading of these models it could be said that the value well has run dry.
More precisely, the best value metrics have very little benefit on their own. So the key to success is to stack as many of these metrics in your favor as possible. Like the 31 value metrics inside the POWR Ratings model.
That’s 31 advantages working in your favor to generate outperformance. Each one increasing the odds of success. And that’s how the Top 10 Value Stocks strategy is able to produce a +36.60% annual return.
Finally we address the 3rd fatal flaw which is that value stocks are generally not timely which damages your ROI.
Value is considered a contrarian investing style. That’s because you are betting on companies that are currently out of favor hoping that the share price turns around.
Unfortunately the longer it takes…the more it harms your Return On Investment.
Gladly the POWR Ratings focuses on 25 different factors that greatly increase the timeliness and ROI of the stocks.
13 Sentiment Factors
12 Momentum Factors
Sentiment factors track what the smart money is doing with the stock such as institutional ownership, Wall Street analyst estimates and insider buying. These are time-tested ways of finding timely, in-favor stocks.
Next up is narrowing in on 12 different Momentum factors that targets stocks ready to rise. Indeed Momentum is just like physics where “a body in motion… stays in motion”.
All in all the POWR Ratings applies 118 factors to find the best stocks. The combination of which truly helps overcome the 3 fatal flaws of value investing.
Then we dial up value attributes to create the Top 10 Value Stocks strategy that increases performance to a stellar +36.60% a year.
This is how you solve the 3 fatal flaws of value investing.
And this is the consistent path to finding the best stocks in the future…
One last improvement
For as great as the Top 10 Value Stocks strategy truly is, there is still one glaring flaw that exists in all quantitative systems. And that is understanding the all-important WHY behind which stocks to buy, and when to sell to maximize gains.
That is why I go one step further, using my 40 years of investing experience to dive deeper into each stock, pulling the curtain back on the all-important qualitative metrics that no computer ratings system can uncover.
The final result is the very best value stocks, that I hand select for subscribers to our popular POWR Value Newsletter.
This is truly a best of both world’s solution:
+36.60% annual return from Top 10 Value strategy
+
Steve Reitmeister with 40+ years of investing experience with a keen eye for uncovering hidden value stocks
=
POWR Value newsletter to help you discover the best value stocks for today’s market.
What To Do Next?
If you’d like to see more top value stocks, then you should check out our free special report:
Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”) CEO, StockNews.com Editor of Reitmeister Total Return & POWR Value
SPY shares fell $0.15 (-0.04%) in after-hours trading Friday. Year-to-date, SPY has gained 7.82%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Steve Reitmeister
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.
