Author: Andrew Packer

Cryptocurrencies

Natalie Brunell: Michael Saylor on Bitcoin, the Red Wave, the Future of Crypto, and Building Wealth

Posted on by Andrew Packer

Since the election, stocks have popped higher. But the real winner has been bitcoin and other cryptocurrencies. That’s because Donald Trump ran as a pro-crypto president.

That means it should be easier for cryptocurrencies to develop in the United States. And face fewer regulatory hurdles than the sector has faced over the past few years. That bodes well for higher crypto prices thanks to increased adoption.

While bitcoin ETFs were launched this year, they offer investors only a passive way to play bitcoin. There are now tools for using leverage such as futures and options.

Or, investors can own shares of MicroStrategy (MSTR). The data analytics company has shifted in recent years to hold as much bitcoin as possible. They currently own over 1% of all bitcoin that will ever exist.

They’re employing tools such as convertible debt and share sales to raise capital to increase their holdings. While that can be dilutive to existing shareholders, MicroStrategy has used these tools to increase their bitcoin per share.

Whatever tool investors use to own bitcoin and cryptos, there are more on the way. And companies that embrace bitcoin ownership could also improve their balance sheets while also driving the price higher.

Investors will want to own some bitcoin and crypto going into 2025, as bitcoin is poised to top $100,000.

 

To watch the full interview, click here.

 

Income investing

Dividend Growth Investor: Seven Dividend Growth Companies Increase Dividends Last Week

Posted on by Andrew Packer

The S&P 500’s sharp rally over the past two years has pushed its dividend yield to about 1.3%. That’s well below its historic level closer to 2% over the past few decades. Yet, overall dividend payments by companies are on the rise.

Investors can continue to find value with dividend stocks, and find better income opportunities than simply owning the overall market. And companies that grow their income over time can mean higher overall returns for patient investors.

Dividend-paying companies that tend to raise their payouts annually can offer great long-term returns. And do so with lower market volatility. So investors should be on the lookout to buy those plays when they’re out of favor with the market.

One such play is athletic apparel designer Nike (NKE). They just raised their dividend by 8%, and has grown its dividends at an annualized rate of over 11% over the past five years.

Currently, shares pays a 2% dividend, and the stock is near its 52-week low. That could be a long-term buying opportunity for patient investors.

Another company raising its payout now is Tyson Foods (TSN). Food is a steady industry, and Tyson’s 2% dividend increase reflects that. But shares pay a solid 3.1% dividend, and has now increased its payout for 13 years straight.

 

To see the full list of companies raising their payouts now, click here.

Stock market strategies

FX Evolution: Smart Money Is Doing This…

Posted on by Andrew Packer

Investors can get an edge on the markets by simply following what the smart money is doing. Institutions such as hedge funds will often position themselves before a big move.

They can use tools like dark pool transactions to avoid alerting the markets. But investors can see big spikes in volume that suggest a move is coming up ahead. Other tools can also provide a longer view on the overall markets, not just individual stocks.

For instance, investors can look at sector ratios to determine where the market is moving now. Big tech stocks have started to lose some of their luster.

That doesn’t mean the market will crash. But it does mean that other sectors of the stock market are likely to lead. And a rotating market can be a healthy long-term sign.

Another tool is to look at key zones. Prior periods of resistance on the way up can become a point of support on the way down. And when stocks decline to a support zone, they’re likely to bounce higher.

Some key levels can tie into moving averages. For short-term traders, the 20-day is useful. For investors looking to make longer-term trades, the 50-day. And for long-term investors, buying at the 200-day can offer excellent long-term results.

While markets may look fearful after a few big swing days, the smart money continues to bet on stocks holding up, and even trending higher.

 

To look at the latest data and potential market moves now, click here.

Income investing

A Wealth of Common Sense: Investors Love Cash Flow

Posted on by Andrew Packer

Investors have several alternatives to simply buying and holding a stock or bond. One popular strategy is to use options to generate income. The most popular strategy is selling call options against a stock position.

Known as “writing” covered calls, the strategy can increase the income generated from a portfolio. The downside? The returns on a stock become capped. If shares rise above the strike price of the call option, shares can get called away.

This income strategy has grown over the past few years, even as interest rates have jumped higher. Following the poor performance of stocks and bonds in 2022, covered calls offer a way to beat poor returns. Over $100 billion in assets are now in funds that employ this strategy.

For investors, covered call options can add income to a stock that might not pay one. Or it could result in two to three times the income offered by a dividend-paying stock.

In a bull market, this strategy can underperform. But it prevents investors from facing big losses. And it can help ensure that investors take profits on a stock that’s rallying.

Investors may want to incorporate using options for income in their own portfolio to boost returns and lower risk.

 

To listen to the full podcast, click here.

Economy

Elliott Wave Options: Trump “Bump” … S&P or Bonds, Which is Right?

Posted on by Andrew Packer

For the past two months, the interest rates on U.S. Treasury bonds have been trending higher. That’s at odds with the Federal Reserve’s two interest rate cuts. Bond yield should be declining, not rising.

Meanwhile, the S&P 500 jumped higher after the election, and still trades near an all-time high. Typically, if Treasury bond yields are rising, stocks should be selling off. This is creating a potential mismatch in the market.

One side must eventually win.

Right now, the data is mixed. Economic growth remains strong. But the labor market is slowing, and inflation remains above its target level.

Ultimately, more data may be needed.

Donald Trump’s reelection will likely bring about increased tariffs in the United States next year. That could create more inflationary pressure, and lower international trade. Both those factors slow the economy.

However, tariffs can benefit domestic companies, which may be a big reason for the jump higher in stocks.

For now, investors may want to adopt a cautious tone. The stock market has had a fantastic year, adding to further gains in 2023. There may be some more upside into the end of 2024, but going into 2025, the outlook gets murkier.

Thanks to interest rates staying high, investors still have an opportunity to earn a real yield in cash, which takes market risk off the table.

 

To view the full analysis on the markets right now, click here.

Income investing

Dividend Guy: 5 Rules to Sell a Loser

Posted on by Andrew Packer

Not every investment is a winner. Even amid a massive bull market this year, many companies have failed to break higher. And investors are at an optimal time to sell a losing position. That’s because losses can be used to offset gains for tax purposes.

In the meantime, investors should bear in mind several reasons why it may make sense to sell a losing position. While there are always plenty of reasons to buy a stock, figuring out when to sell can be more difficult.

For instance, if a company’s fundamentals have changed for the worse, it may be time to sell. That could mean a company going from growing earnings to contracting earnings. Or the collapse of profit margins as a hot product is sold to nearly everyone who wants one.

Second, if your original thesis for investing in a company is no longer valid, it may be time to sell. Hoping for a turnaround isn’t an investment strategy. Remember, a company’s financial and operational health can change.

Third, for income investors, a dividend cut is a clear sign to sell. A stock will often fall in anticipation of a dividend cut. The follow-through indicates that a company starved for cash. And that it will take time to get back to a point where they can increase payouts again.

 

To hear the full list of reasons to sell a losing position, click here.

Cryptocurrencies

Bitcoin Magazine: Bitcoin’s Time Has Come With The U.S. Election Results

Posted on by Andrew Packer

Last week’s election a positive for bitcoin. That’s because Donald Trump came out in favor of American leadership in bitcoin. That includes respecting the right to mine bitcoin, and hold it privately in a digital wallet.

Those measures have been opposed by regulators over the past few years. More importantly, over 200 pro-cryptocurrency candidates won elections last week. That increases the chances that bitcoin will have favorable political conditions over the next two years.

These measures have already helped bitcoin break to new highs, with the cryptocurrency breaking $80,000 for the first time last week. From $80,000, bitcoin rallied to over $89,000 before pulling back.

But there could be more gains to come. Proposals are being made to turn bitcoin into a strategic reserve.

Currently, the United States owns a significant amount of bitcoin, largely through its seizure in the use of crime. By holding that bitcoin rather than selling it off, it could create a massive asset in the years ahead.

With investor interest on the rise again and with bitcoin making new all-time highs, bitcoin’s trend is higher. And if other nation-states start to accumulate bitcoin also, the asset could see significant returns in the years ahead. The time for individual investors to acquire a meaningful stake may be passing.

 

To read the full article, click here.

 

Stock market strategies

Lead-Lag Report: Cem Karsan on Options Market Volution and Navigating Economic Complexity

Posted on by Andrew Packer

The past few decades have seen an explosion of interest in options trading. And the past two years has seen the rise of daily options trading in a variety of market indices, including the S&P 500 and the Nasdaq.

The increased popularity of using options daily and for short-term market swings is clear. And we may now be at the point where movements in the options market can, in turn, now swing the much larger markets represented by these options.

The growth of options trading is extensive. Currently, $30 trillion in new investments will hit the market.

And now the options market can give investors a sense of how assets will perform. When the options market is heavily tilted towards the stock market going up, it’s likely that the market will rise. When investors are uncertain, bets will start to accumulate both long and short.

The increase in options trading, in short, gives a sense of what and asset’s value is now and will be into the future. And it can do so in a way that can be replicated by everyday traders.

Currently, markets are gearing up for their year-end tax loss sales and rebalancing. Investors may want to look at trends in the options market to determine an asset’s next move.

 

To watch the full interview, click here.

 

Stock market strategies

Tastylive: 30 Year Technical Trader Explains Why We Could Keep Going Up

Posted on by Andrew Packer

With markets breaking higher, the stage has been set for a year-end rally. However, the question is how far markets go before the current rally pauses. That’s where technical analysis can come into play.

Technical indicators can provide a sense of when markets get heavily overbought. And where potential pivot points in the market lie. Those levels indicate where stocks may find resistance and pause before trending higher.

One way of determining how high markets can go is to use a channel to look at an asset. A channel looks at a market’s trend. A line is drawn at market peaks, and another at market lows. The extension of both those lines can give investors a sense of the range that a stock or market index is likely to trade in.

Sometimes, there’s a big market jump, or a big drop. Those can cause the creation of a new channel.

Looking at the current market channel for the S&P 500 index, it’s likely that the market can see another 200 point move, or another 3% higher, over the coming weeks.

Within a broad market uptrend, over the shorter-term, stocks can fluctuate wildly. So while the market trend is up into 2025, there will be some daily swings lower along the way.

 

To see some of the major channels and technical trends for the next few months, click here.

Stock market strategies

FX Evolution: Warren Buffett Is Doing Something Strange…

Posted on by Andrew Packer

Markets have broken higher following a period of consolidation ahead of the U.S. election. This breakout has proven strong, and helped assets such as bitcoin rocket higher. That adds to significant gains since the start of 2024.

However, not all investors have gone along for the ride. One of the most-watched investors in the market, Warren Buffett, has taken the opposite approach. He’s been selling stocks and increasing his cash position as markets shoot higher.

On the surface, that could be a cause for concern. As a value investor, Buffett, through his holding company Berkshire Hathaway (BRK-B), may simply not see any good deals right now.

It’s typical of Buffett to raise cash when markets are trending higher, and he often sits on a cash position of at least 20%. Today’s cash position however, is much larger at nearly 30%.

It’s possible Buffett could be gearing up for a large acquisition. He has approval to buy 50% of Occidental Petroleum (OXY). Typically, once Buffett buys half of a company, we’ll want to buy the second half in time.

Another possibility was that Buffett was concerned over possible corporate tax rates. They were set to chance at the end of 2025 and shift higher. Given the election results, it’s likely that rates stay low into 2025 and beyond.

 

For the full analysis on Buffett’s cash position now, click here.