Author: Andrew Packer

Commodities

Kitco: Bitcoin Inflows Signal the End of U.S. Dollar Dominance, and this is Just the Beginning

Posted on by Andrew Packer

Gold and bitcoin have been top-performing assets for 2024. Gold prices topped out at $2,800 per ounce before pulling back in November. Bitcoin peaked in the spring, then pulled back over the summer, only to rally to new highs in November.

Bitcoin has now more than doubled in 2024 to the $100,000 range. Plus, with gold trending higher, these assets look primed to continue rallying.

For bitcoin, the move has been driven by several factors. First are the rise of bitcoin-related ETFs.

These funds make it easy for investors to own bitcoin in a retirement account. Plus, bitcoin’s halving in the spring should follow prior four-year cycles. If so, bitcoin prices should continue to rally into mid-to-late 2025.

After that, a crypto winter could set in. Investors may want to take some profits in bitcoin in the middle of next year.

Meanwhile, gold continues to see strong demand from central banks. And retail investors have yet to heavily shift to precious metals.

That trend could change in 2025. Continued inflation running above trend and geopolitical instability should both bode well for gold. That could also help gold mining companies break out of their funk and move higher.

Either way, both gold and bitcoin offer investors the prospect of strong returns in 2025.

 

To read the full article, click here.

 

Stock market strategies

The Intellectual Investor: Managing a Million: What Would I Do Differently?

Posted on by Andrew Packer

Warren Buffett has famously said that managing a large portfolio is a challenge. The billions of dollars he controls can only be invested in the largest asset classes around. That’s because it takes billions to move the needle on the returns of a big pile of money.

But if the money were smaller, say a $1 million portfolio, Buffett says he could do better. He even states that he could earn 50% a year.

For most investors, $1 million would be an improvement on their current portfolio size. And the returns are nowhere near 50%.

As long as investors follow a disciplined approach, they can likely earn excellent returns. However, a 50% annualized goal may be a stretch. Even when Warren Buffett was working with small amounts of capital, he rarely saw a 50% return in a year.

What Buffett did do was follow a value-based investment strategy and stuck to it. And he avoided overly diversifying, at times having as much as 30% of his portfolio in a single investment.

Investors looking for bigger returns should also look to only invest in their top 10 ideas instead of 20. However, the risks of any single stock imploding and hitting a portfolio substantially rise.

Overall, investors looking for high returns have to take on higher risk. For investors with smaller portfolios, that’s easier than larger players.

 

To read the full analysis, click here.

 

Stock market strategies

The Lead-Lag Report: Anthony Crudele on Futures Trading Evolution and Risk Management Tactics

Posted on by Andrew Packer

All trading requires strong discipline. That’s because several trades in a row can be losers. And if that happens, it can lead to needless stress.

As long as traders follow a plan and stick with it, they can build a system that can profit over time. Even if any individual trade doesn’t work out. In essence, good trading is treating the market as a marathon, not a sprint. Although any individual trade can often feel like one.

Options trading can add in an additional layer of complexity. The rise of daily options trading over the past two years makes it easy for any investor to day trade. However, the trades used within the context of an overall portfolio matters.

Investors can use options and futures to hedge against a long portfolio position. That’s similar to investors who sell covered call options against their existing stock position.

Both options and futures can allow investors to use high leverage. Instead of buying 100 shares of a stock outright, a futures or options contract can get that control. And at a fraction of the price.

Traders should consider the total value of their options holdings if they were stock positions. That ensures that they won’t overtrade on options.

But adding in such trades can help boost your overall portfolio returns and reduce your risk. So it may be worth including such options in your trading account.

 

To watch the full interview, click here.

Economy

The Compound: Something’s Going to Break, We Don’t Know What

Posted on by Andrew Packer

While the market has trended higher since the election, some sectors have fared better than others. Investors generally expect inflation to continue to run above the Federal Reserve’s target rate. That’s why assets like gold and bitcoin have been big winners.

And while economic data looks strong, there have been a few yellow flags for investors. And any one of those potential dangers could cause the market to tip over into a bear market in 2025.

For instance, the housing market has been out of whack for two years. Rising mortgage rates have kept homeowners from moving out of homes with a low rate. But home prices have continued to rise due to ongoing demand.

The end result? A high price to income ratio to buy a home. That’s resulted in homeownership slipping out of reach for middle class Americans. Today, only those with significant income and assets, and increasingly older Americans have joined the ranks of homeowners.

Meanwhile, 2025 will see Donald Trump return to the White House. Markets are likely unable to fully price in the impact of any changes on tariffs. That’s because changing tariffs can lead to retaliatory actions by foreign countries.

As new tariffs unfold, the economy could see a slip in both imports and exports. Slowing global trade could easily put some fear into the stock market.

 

To watch the full interview, click here.

Stock market strategies

Elliott Wave Investors: Elliott Wave Zig-Zag Signals Upside Move!

Posted on by Andrew Packer

November is historically a strong month for the stock market. 2024 has been no exception, with stocks looking to close the month near record highs going into Thanksgiving. But it’s also been a volatile month. Stocks pumped higher immediately following the election, only to give back half of those gains the next week.

What should investors look for amid these relatively big swings? A look at the overall move suggests that stocks are looking to continue to trend higher.

Some short-term fears, from Russia to inflation to Nvidia’s earnings, have given investors pause. But so far, the data indicates that markets will likely continue higher.

That’s also apparent from the technical analysis. The Elliott Wave pattern suggests that the market’s big push higher and the healthy pullback along the way are bullish. And given the big swings in November, December could end up being a much smoother and calmer month.

From a technical standpoint, the market’s move is a classic rally and pullback. And it looks similar to the third part of a five-part Elliott Wave. That means there’s still more upside ahead into the end of 2024.

However, investors will likely want to get a bit more cautious going into 2025. Uncertainties over taxes and regulations could also cause markets to take a more meaningful pause come January.

 

To view how the market looks from an Elliott Wave perspective, click here.

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.