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By Jeffrey Cohen, Investment Advisor Representative US Advanced Computing Infrastructure, Inc. Chicago Quantum July 29, 2022 Our first video is about the GDP advanced read by the Bureau of Economic Statistics. It confirms that the US economy looks pretty good, but is shrinking on a real basis (accounting for inflation). Things are moving, like that jogger on a treadmill at the health club in winter, but not fast enough to go anywhere. This is why we feel busy, and jobs look good, but we are not creating any lasting growth. I worry about this all the time, as the wealth of the country's poorest is going to pay for fuel, heat, rent and food. Earnings are up a little, but savings are up 3x more than income growth. People are nervous and saving their money. Rainy day funds...for those who can afford it. In our video we outline the story. We also explored the action of the stock market. Net-Net this is not a market acting like we are in a recession, nor is it acting like a period of rising interest rates. This is an enthusiastic market in an upswing, with strengthening market breadth. We are as surprised as anyone to see this. We discuss the details in our video. Point after point show the market rising in the face of bad news. Amazon has a bad quarter, and the stock is up double digits after hours and pre-market. US Federal Government passes a law to help semiconductor companies, and the established player stocks all drop. OK, that is normal...our government is picking winners and losers with our tax dollars and it upsets the natural order of things. Pre-market moves across economically sensitive industries is pretty mixed. Finally, our model shows price volatility to be flattening out this week. It is elevated, significantly, but the growth has stopped for now. The stocks picked by our CQNS UP run are consumer discretionary, food and beverage, and insurance brokers. The B2B industrial stocks and of course, Berkshire Hathaway B-class shares. A few weeks ago they were picking the NASDAQ large cap darlings like Apple, Microsoft, Google, and others. Those have now run up very quickly, blown out their volatility bubbles, and are back down on the list again. The model is now saying that consumer staples are the group that is consolidating and could either stay flat, or recover. GLTA!
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By: Jeffrey Cohen, Investment Advisor Representative US Advanced Computing Infrastructure Inc. An Illinois Investment Advisor July 28 pre-market analysis
Equities
VIX
Global equities up too. US Fixed Income
Commodities
US Dollar
Europe
Money Managers
Market Breadth
Physical Miners
Crypto
US Banks
COVID
By: Jeffrey Cohen, Investment Advisor Representative US Advanced Computing Infrastructure Inc. Today we covered a great many topics while we wait for the FOMC release at 2pm ET. One important topic was to repeat an answer to a question posed by a potential retail investor client. Myron is his name, and he asked: "Can I get some good tips for free? What should a little guy like me invest in?" By way of background, Myron was on a job interview and had some investments he made this year in stocks. He did not remember all the tickers, did not know what the companies did, and did double his money on one trade, but not sure about the others. He bought them on a whim. For a retail investor with limited capital, what I suggest is to take money that you can afford to put to work for five years. Money you won't need for five years for living expenses. In Myron's case, that was $25,000. For the first $10,000 (he is a US citizen), I suggest going to Treasury.gov, or Treasury Direct, and buying I-Series US Savings Bonds directly from the US Treasury. You can lock in a 9.62% interest rate for the first six months. They promise to pay a little 'real' interest after making up for inflation. This is awesome for investors, and there are even some potential tax benefits. We recommend the first $10,000 go into I-Series US Savings Bonds. The next $15,000 goes into a low cost, passive, index equity mutual fund. We like the ones that track the S&P 500 Index although it is 100% ok if you want to put some into a passive index equity mutual fund that mirrors the Nasdaq Composite 100 (although there is significant overlap), and some into the Russell 2000 (small caps). The S&P 500 is our favorite, and provides the best risk-return tradeoff for a retail investor that cannot do the due diligence or run the quantitative models required to find an edge. The fund manager we use personally is Vanguard and have invested in their S&P 500 Admiral Class index fund since the 1990s. Fidelity also has a low-cost fund that should be fine. Also, we are setting up a relationship with The Charles Schwab to be our custodian for client funds. It is likely they have a comparable product as well. The key is to find a very low cost mutual fund (maybe pay 6 or 9 basis points per year in expenses) and to reinvest dividends. In year two, rinse and repeat. Put another $10k into US Savings Bonds and another $15k into US equities and watch your money grow. As your retirement nest-egg grows, and your income grows, there are other types of investments to consider. Hope that helps. This is Jeffrey Cohen. Please click on our youtube video and hear the discussion for yourself. Also, if you like the video, please subscribe to our YouTube channel. It helps spread the word! Oh, and watch out for today's FOMC announcement. We are very surprised that the stock market was set to rise early this morning (hours before market open), bonds were up, the US Dollar was down, and it was a 'risk-on' day. Watch out for Whiplash at 2pm ET today when the same trading organizations consider whether to reverse their bets. |
Stock Market BLOGJeffrey CohenPresident and Investment Advisor Representative Archives
March 2023
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