Tuesday, April 16, 2024
There’s a substantial amount of fear in the market. At one point on Monday, the Dow Jones was down more than 1,000. This may have been for a number of reasons. One, the Federal Reserve may have to get aggressive with interest rates in order to slow inflation. “Over the past month, the Federal Reserve […]
Dear Investor, Bank of America stock analysts recently released a long-term forecast that bodes very badly for investors for the next decade. If the analysts are correct, many investors will not reach their long-term financial goals. But one investing strategy looks to avoid the problem… In October, several news outlets, including Yahoo Finance and Markets […]
Tech stocks have the started the new year with elevated volatility and quite a bit of selling pressure. The most popular tech index, Invesco QQQ Trust (QQQ), is down 5% for the year and has seen a handful of large percentage moves already. One strategist is looking to take advantage of the volatility by using […]
While the markets were slow for the holiday season, it didn’t stop options in FuelCell Energy (FCEL) from trading quite briskly. The hydrogen fuel cell company released earnings last week and reported a wider than expected loss on lower revenues. The share price fell nearly 14% on the day with over 200,000 options trading. The […]
Dear Investor, Share buybacks have become the rage for companies with large amounts of excess profits or free cash flow. Wall Street analysts love share buybacks as a way to “return capital to shareholders,” and many boards of directors give a lot of weight to what the analysts who follow their companies say. My opinion […]
Dear Reader, The recent stock market volatility reminds me again of the power of reinvesting the income from your dividend investment strategy. Once you understand the compounding power of dividend reinvestment, you realize that it’s very good for your long-term wealth when the stock market goes through a period of decline. It’s something my Dividend […]
Market volatility has been at its highest since February. Small cap stocks have been particularly volatile lately. Keep in mind, small caps tend to get sold early when there is a flight to quality. The popular small cap stock ETF, iShares Russell 2000 ETF (IWM) dropped from a 52-week high near $245 all the way […]
Dear Reader, “It’s different this time” might be the four of the most dangerous words in investing. Market crashes occur when investors believe that traditional valuation metrics no longer apply. Another way to put it is that grossly overvalued investments eventually come back to earth, often violently. Yet, I am going to go out on […]
Networking giant Cisco Systems (CSCO) dropped 5% the day after earnings were released last week. The company’s’ guidance was disappointing to investors and revenues were lower than expected. However, one trader used this opportunity to enter a covered call trade. The trader purchased 1.35 million shares of CSCO (at $51.77) while selling 13,500 calls that […]
“Options are the same as stocks, just cheaper!” Ever heard a pitch start like that? Well, it’s wrong. Crazy wrong. Options trade much differently than stocks, and thus why it’s easier to lose money with options. (and this is coming from a 20+ year options trader). One key difference is options use of “implied volatility.” […]
