суббота, 29 февраля 2020 г.
TFSA Investors: Lay a Nest Egg With 1 Safe High-Yield Dividend Stock
One can feel a subdued fear of a looming recession among investors. The WHO has declared the coronavirus a public health emergency of international concern, and, given this development, the global economy may suffer a setback.
As a TFSA investor looking to lay a nest egg, you might be struggling in picking the stock you should invest in.
If you are not in a hurry to withdraw from your TFSA, I would suggest putting your investment in Fortis (TSX:FTS)(NYSE:FTS) stock. Apart from being a Dividend Aristocrat, Fortis is also one of the safest offerings of the TSX.
If you had laid nest egg with Fortis stock in 2010 by using your TFSA contribution limit of $5,000, your investment would have turned $9919.5 today, which is almost double. Since its IPO, Fortis has been offering such good returns on long-term investments.
We can’t be sure how Fortis stock will perform in the future. However, the following points suggest that your TFSA investment in Fortis will have a good chance of growing.
Fortis’ business stands on solid ground
One factor that makes Fortis stand out from many other S&P/TSX players is that its business doesn’t work on a regular, fluctuating demand-supply equation. Fortis has a vast network of natural gas distribution, electric transmission, and power generation across the North American continent, including the Caribbean.
This asset and business portfolio generally remains impervious to changing global events and market corrections. During recessions, people may not buy cars or homes, but they keep on using the utilities. And Fortis lies at a crucial junction of the supply chain of utilities in the U.S. and Canada.
This business model, which entails nonstop demand and the least chances of supply drop, helps Fortis’s stock to register continuous growth.
Less uncertainty with income and growth
Many stocks hinge on businesses that involve high volatility when it comes to revenue and growth. Fortis fares better in this regard. The utility tariffs are usually fixed and generate stable and stead cash inflow for Fortis.
Similarly, you can also make a good guess about the future growth of a company when you assess it by keeping the acquisitions and expansions in mind.
Sound future planning
At the start of the fourth quarter of 2019, Fortis announced its five-year capital investment plan. The plan has set the average annual dividend growth target of 5% by the end of 2024. Fortis has set this target by factoring in the gradually increasing base tariffs in the next five years.
Fortis has also ventured into a host of third-party projects in Arizona, Ontario, and British Colombia. If things on the front work out as per plans, the growth of five-year capital investment plans could stretch beyond 2024.
Conclusion
Fortis hasn’t disappointed its investors in the last 46 years. The inherently failsafe business model and sound future planning have helped Fortis in maintaining the second-longest dividend streak of the TSX.
The relatively safe nature and over 3% dividend yield make Fortis stock an ideal option for investment. If you are a TFSA investor who is looking to lay a nest egg, you should consider Fortis stock.
Fool contributor Jason Hoang has no position in any of the stocks mentioned.
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3 High-Yield Dividend Stocks to Buy in March
When markets are volatile as they are now, it’s good to know that you can count on dividends. There are many stocks paying dividends on the TSX. While you might think first of financial and telecom stocks when looking for dividends, stocks in other sectors offer interesting dividend yields and will bring some diversification to your portfolio.
Computer Modelling Group (TSX:CMG), NFI Group (TSX:NFI) and Extendicare (TS:EXE) are three high-yield stocks that are less-known but deserve more attention.
Computer Modelling Group
The number of tech stocks listed on the TSX is pretty small. And when we think about Canadian tech stocks, we think about big names like Shopify and Constellation Software.
But there are smaller tech companies worth looking at, such as Computer Modelling, a computer technology company with a market capitalization of $550 million.
Computer Modelling was founded in 1978 and is headquartered in Calgary. The company provides reservoir simulation software, including thermal, compositional, black oil and enhanced oil recovery processes to oil and gas companies in Canada.
In addition, the company provides professional services including assistance, advice, training and contract research. It also sells its products and services in around 60 countries.
The computer company pays a quarterly dividend of $0.10 per share, which has a forward dividend yield of 5.7%. The stock has a 15-year CAGR of over 20%, which is very high. Computer Modelling is thus a good stock to buy if you’re interested in both growth and income.
NFI Group
NFI Group manufactures heavy transit buses, medium buses, low-floor buses and motor coaches in the United States and Canada. The company has two segments: manufacturing operations and aftermarket operations. It also provides parts of buses and coaches and assistance services.
NFI was founded in 1930 and is headquartered in Winnipeg. The company was previously known as New Flyer Industries until it changed its name to NFI Group in May 2018.
NFI is about to finalize its largest order for battery-powered electric buses from the Seattle area transit agency, indicating greater market demand for zero-emission buses.
King Country Metro, the transit authority of Seattle and the surrounding area, has agreed to buy 40 Xcelsior 60-foot, zero-emission, battery-powered electric heavy-duty transit buses from NFI. It plans to order 80 additional battery-powered electric buses in the coming year.
With a price of around $1.3 million each, the sale is a big win for NFI.
NFI pays a quarterly dividend of $0.425 per share for a forward dividend yield of 5.4%. The stock is very cheap, with a five-year PEG of only 0.5.
Extendicare
Extendicare provides care and services to seniors in Canada. The company was founded in 1968 and is based in Markham. Extendicare offers long-term care services, housing services for retirees, and home health care services.
After 52 years of operation, it now operates 120 care centres for the elderly and retirement centres. The company continues its expansion across the country. Extendicare also offers third-party liability insurance products in the United States.
As the population is aging, we can expect the demand for Extendicare services to increase, so revenue should keep growing.
Extendicare is installing new management and a new internet-based system to maximize its workforce and automate work processes.
If you’re looking for a regular stream of income, Extendicare will interest you. This healthcare stock pays a monthly dividend of $0.04, which gives a dividend of $0.48 annually. The forward dividend yield is 5.8%.
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Fool contributor Stephanie Bedard-Chateauneuf has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Constellation Software and Shopify. The Motley Fool recommends NFI Group.
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‘Digileaker’ Claims to Have Stolen KYC Documents for 8,000 Digitex Users
An ex-employee of cryptocurrency derivatives exchange Digitex began leaking stolen Know-Your-Customer (KYC) on Telegram. The stolen data reportedly includes passport and driving license scans and other sensitive documentation pertaining to more than 8,000 Digitex customers.
The Seychelles-based exchange issued Cointelegraph a statement indicating that it is not currently able to comment on the incident and is seeking legal counsel:
“Digitex Futures is aware of a leak of confidential data. We are not able to comment fully on the incident at this time and are currently seeking legal counsel. However, we can confirm that this was not an external hack but an internal security breach orchestrated by an ex-employee with a conflict of interest against the company. We will be releasing more information on the incident as soon as possible.”
The extent of the Digitex breach is unknown
However, one source who is familiar with the matter told Cointelegraph that the data of 8,000 customers “has not been breached,” adding:
“Only three ids have been leaked although the perpetrator confirms that he has them all and is starting to post demands so as not to leak the rest.”
On Telegram, the “Digileaker” has claimed to be in possession of “the entire KYC documentation of every single user who has used the Digitex Treasury from its inception date until today.”
In an interview with cryptocurrency scam hunter CryptoVigilante, the Digileaker claimed to have used login information obtained when Digitex registered with its KYC provider Sum and Substance.
According to the hacker, the login “gives unrestricted access to all the KYC information of 8000+ customers including documents, address, phone numbers and other information like IP address.”
Digitex data breach gains momentum
The Digitex debacle has escalated over recent weeks, starting with the ex-employee hijacking its Facebook account to publicly disclose users’ email addresses. In a Feb. 10 blog post, Digitex stated that the breach was an “internal issue” that had been perpetrated by a “scheming and highly manipulative ex-employee.”
The company also assured customers that “beyond their email addresses, no other sensitive information was gathered or released.”
Crypto exchanges see several attacks during February
Digitex’s data breach comes amid an increasing number of malicious attacks targeting cryptocurrency exchanges.
On Feb. 27, Okex and Bitfinex suffered simultaneous distributed denial of service (DDoS) attacks. While Okex’s platform was “largely unaffected,” Bitfinex entered into maintenance mode to quickly execute countermeasures and patch for all similar attacks.
On Feb. 28, the Tim Draper-backed Singaporean crypto exchange Coinhako announced that it has fully reimbursed all customers were affected by a “sophisticated attack” that began targeting the exchange seven days prior.
The exchange responded by suspending send functionality. Coinhako has since restored send capabilities for Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Tether (USDT), TrueUSD (TUSD) and USD Coin (USDC).
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пятница, 28 февраля 2020 г.
Market Crash: Canada’s Best Dividend Stocks Are Becoming Cheap
It’s becoming increasingly possible that the ongoing correction in stock markets will turn into something more drastic, ending the decade-old expansion that started soon after the 2008 Financial Crisis. If that is the case, then you should start putting together a plan to buy some of the best dividend stocks that will become extremely cheap.
When fear grips investors’ minds, it always pushes stock values down more than they deserve. But this short-lived weakness also creates opportunities for long-term investors who want to stay invested and who aren’t in the market to make a quick buck.
If you’re an income investor with an aim to earn dividends from solid companies, then you should be ready to make your move and slowly start buying stocks, which ultimately recover and emerge as winners.
Here are two dividend stocks to buy, as their stock prices fall and their yields become more attractive.
Toronto-Dominion Bank
If you’re on a hunt for such stocks, then I strongly recommend adding some of Canada’s largest lenders in your portfolio. Canadian banks have been very consistent in rewarding investors through steadily growing dividends.
Their main strength comes from their strong local presence, ability to grow south of the border, and that they operate in a regulatory environment, which is among the best in the developed world. These lenders emerged strong after the 2008 Financial Crisis when their global peers struggled to survive.
And among the Canadian lenders, Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is on top of my list. TD stock has shed more than 9% of its value in the past five trading days amid the coronavirus-induced selloff globally.
After this plunge, its stock is now trades close to the 52-week low, yielding just over 4%. I would buy this stock once its yield touches 5% and continue to add to my position.
The lender has an excellent payout policy, distributing between 40% and 50% of income in dividends each year. In addition, TD has a great diversification business with its wide presence in the United States. It generates about 30% of its net income from the U.S. retail operations. The bank also has a 42% ownership stake in TD Ameritrade with a fast-expanding credit card portfolio.
Fortis
Utility stocks are among the best defensive stocks in a market where a steep correction is taking place. The main reason investors flock to these companies is because it’s highly unlikely that demand for water, gas, or electricity will plunge, even when the economy is facing a tough time.
In this group, St. John’s-based Fortis (TSX:FTS)(NYSE:FTS) is my favourite due to the company’s strong balance sheet and its diversified revenue base. The company serves customers in five Canadian provinces, nine U.S. states, and three Caribbean countries. The U.S. accounts for more than 60% of its assets, while Canada has more than 25%, and the rest are in the Caribbean.
During the ongoing sell-off, its stock has fallen 7%, taking its yield to 3.3%. As this slump deepens, we are likely to see its yield back up to 4% — a level hard to resist from this dividend-paying company.
With about 6% expected growth in its annual dividend payouts through 2024, Fortis stock is a solid addition in your income portfolio. With growing dividends, you also need stability in your return. Fortis has done a good job returning cash to its investors. The company has increased its dividend payout for 46 consecutive years.
Bottom line
There are many stocks you can target to buy when they become cheap. But you can use this example to build a strong dividend income portfolio.
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Buy the Dip: Load Up on These 3 Dividend Stocks Today… Before It’s Too Late!
Successful investing is easier than most people think. All you really need to do is sit back, relax, and then buy stocks when the opportunity presents itself.
Buying opportunities are there every day. We have only a certain amount of capital available to us, and there are thousands of different stocks available to buy in North America alone. If you can’t find a few enticing companies — even when the market is overvalued — you’re not looking very hard.
Today, of course, the stock market is not at all-time highs. We’re in the midst of one of the biggest (and quickest) sell-offs in recent memory, and the carnage may not even be done yet. Investors are seeing months of gains evaporate quickly, right before their very eyes.
I know it’s tough, but we need to forget about our losses for a second. Because today is a fantastic buying opportunity. You’ll regret not loading up on these three cheap stocks a few years from now.
H&R REIT
Despite usually being a pillar of strength in turbulent markets, Canada’s REITs are being hit hard in this downturn. Bargain hunters, rejoice! This means H&R REIT (TSX:HR.UN) shares are really cheap.
Just how cheap is the diversified owner of some 40 million square feet of retail, office, industrial, and residential property? The company earned $1.76 per share in funds from operations last year.
The stock trades at approximately $20 per share as I write this, putting the stock at just 11.5 times trailing earnings. Shares also trade significantly under book value, which is closer to $25 per share.
H&R is taking advantage of low interest rates to expand its empire, specifically focusing on residential property in the United States. It owns some 10,000 apartments already, and is developing more in places like Austin, Seattle, San Francisco, and Miami. The next phase in its development pipeline will likely be mixed-use buildings in Toronto using some of the land it already owns.
In the meantime, investors collect a 6.7% dividend — a distribution with a payout ratio in the 80% range.
TD Bank
Despite posting pretty solid earnings earlier this week, bearish investors are still sending Toronto-Dominion Bank (TSX:TD)(NYSE:TD) shares lower as they worry that a poor economy will impact Canada’s banking sector.
I view things a little differently, however. This is a chance to load up on one of Canada’s best banks at a bargain price. At just $70 per share — which is a fresh 52-week low — TD trades at just 10 times forward earnings expectations. The stock is hardly ever that cheap.
Even if you’re worried about the Canadian economy, TD still has strong exposure to the United States. Recent numbers from that part of the business have been a little lackluster, but there’s still ample opportunity to grow as the fragmented U.S. banking system continues to consolidate.
TD also just hiked its dividend to $0.79 per share each quarter, which good enough for a 4.5% yield — something you don’t see very often from TD.
Restaurant Brands
Similar to the other two stocks on this list, Restaurant Brands International (TSX:QSR)(NYSE:QSR) shares have also hit a new 52-week low recently.
The owner of Tim Hortons, Burger King, and Popeyes has some 26,000 total restaurants in more than 100 countries worldwide that collectively do $32 billion in annual sales. Both Popeyes and Burger King have been posting solid sales increases lately, while Tim Hortons has been struggling a bit.
Management has vowed to right the ship by focusing on the basics and staying more true to the brand. In other words, you won’t see another plant-based burger at Timmy’s anytime soon.
Shares sit at around 20 times forward earnings expectations, which is a fair value for such a high-quality company. Earnings should grow by about 10% per year as the company adds new restaurants and grows same-store sales.
And remember, shares are down more than 20% in the last six months. A little reversion to the mean should translate into some nice short-term returns.
Finally, the company’s dividend has suddenly become pretty generous. The current yield is 3.4%.
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The Alternative Assets You Need (And Don’t Need) In Your Ira
Diversification via alternative assets is among the best ways to help protect your portfolio. Nothing ever grows and grows forever. There are always peaks and valleys, and the timing varies depending on the commodity.
If you’re starting to think about retirement and your IRA (and you should be, no matter what age you are,) then this fact has probably crossed your mind. For those that have primarily invested in stocks and bonds, it leads them to ponder the dreaded worst-case scenario: “What if the markets tank when I’m about to retire?”
We saw the effects in the crash of 2008 and the subsequent recession. Millions of Americans witnessed their retirement accounts get absolutely pummelled, even though they had properly planned for years, saved all they could, and did everything right. It didn’t matter in the end. The lucky ones were still young enough where they could afford to wait years for the market to recover. The rest saw their hope of a relaxing and prosperous retirement utterly destroyed.
The financial crisis became the perfect case study for the advantages of alternative assets. Take gold, for example. Wise investors, including billionaire Eric Sprott, saw the writing on the wall, recognized the stability that gold has always maintained, and experienced minimal damage from the recession as a result (more on that, later).
We’ve all heard the quote about “those that don’t learn from history are doomed to repeat it.” The same applies here. In the last year especially we’ve seen more and more recession warning signals emerge, with many predicting it will finally hit in 2020. So what should you do, then?
Adding alternative assets to your IRA is the best way to start. It’s essentially a win-win scenario. Not only are you still getting all of the tax perks of an IRA, but you’re also enjoying the specific benefits of the alternative asset itself.
So which assets do you need in yo,ur IRA and which should you avoid? First, let’s look at your best options.
The Best Alternative Assets for Your IRA
Gold
It’s the gold standard for alternative assets (no pun intended), and has been for thousands of years. Throughout the course of human civilization, gold has demonstrated unmatched stability. It has intrinsic value, rarity, a gradually decreasing supply, and constant demand. Nothing else rivals gold’s comprehensive list of benefits.
Everett Millman, a Precious Metals Specialist at Gainesville Coins, explains how “it’s a boon for investors that physical precious metals can be included in a self-directed individual retirement account (IRA). Precious metals tend to preserve their purchasing power over time, providing a useful hedge against the effects of inflation on your savings. Gold and silver are also great portfolio insurance: They can help offset losses in riskier assets (like equities) in the event of a prolonged market downturn.”
Millman hits the nail on the head here, as one of the big advantages in gold is the protection that it offers. As we saw in 2008 and every prior recession, those that held gold avoided the worst of it. If you were smart enough to hold onto your gold over the years then you’ve been enjoying its other primary benefit, steady growth.
Real Estate
Real estate, like gold, has quite the lengthy track record as a high-performing asset. With populations exploding around the globe, the scarcity of land is only going to increase. It’s a bit more volatile than some of the assets on our list though, and the real estate market is prone to bubbles. Just look back to when the last one started to pop in 2006 to see the devastating effects.
Nonetheless, if you can avoid these relatively rare yet severe dips or have the time and resources to ride them out, real estate makes a great addition to an IRA. Just note that there are some restrictions. The property you purchase can’t be a personal residence. It also cannot be a second home, vacation home, or something you rent occasionally. Also, remember that you can’t put property you already own into an IRA, it must be a new purchase.
Rental properties can be particularly lucrative, so if you’re thinking about adding real estate to your portfolio, consider apartments or commercial buildings that you can lease to tenants. Your baseline investment will be in something safe and tangible, and you have the opportunity to profit every month via rent collection.
Cryptocurrency
By far the newest entry that we’ll cover, cryptocurrencies have exploded in popularity over the past ten years. Bitcoin is the undisputed king of the crypto markets, maintaining a roughly 70% market share. It has made millionaires and even billionaires out of those that were wise enough to invest early. Even if you only got in a few years ago, then you’ve been holding onto an asset that has outperformed every single one of its competitors.
When you step back and examine the technology and advantages that crypto brings to its users, then it’s really no surprise. The security is unmatched, with no computer on earth able to break the encryption within. In fact, it would take a supercomputer a mind-boggling 0.65 billion years to crack the hash of a single bitcoin address.
That’s only the tip of the iceberg as far as benefits go. You’re provided 100% transparency but yet enjoy full discretion. Middlemen and their fees are eliminated, Bitcoin is accessible from anywhere at any time, and offers protection from third-party intervention or government seizures.
If you feel like you’ve missed out on Bitcoin already then don’t worry, it’s only just getting started.
As we’ve just seen, gold, real estate, and cryptocurrencies are your best bets in terms of stability, protection, and growth. But what about the rest of the alternative assets out there? Perhaps you’re considering a purchase and are wondering if it’s IRA-eligible? Let’s take a look at the most common assets you CAN’T include in your IRA.
Want these in your IRA? Think again.
Derivative Positions
While stocks and mutual funds are just fine, certain types of derivative positions are not. Particularly those with unlimited or undefined risk, as the IRS forbids them. In general however, you’ll find that most IRA custodians prohibit any type of derivative trading, with the possible exception of covered call writing.
Considering their highly speculative and risky nature, it makes sense why derivative positions aren’t allowed in something that’s meant to provide stability.
Collectibles and Antiques
Perhaps you found a hidden gem at the flea market and soon discover it’s worth thousands. Unfortunately, items like these can’t be used with an IRA to guard against taxes if you choose to sell and profit off them. This includes items like stamps, baseball cards, silverware, comics, artwork, jewelry, porcelain, wine, and toys.
Artwork was actually permitted in IRAs originally but was disallowed in the 1970s. At that time, more and more art was being recovered after being stolen by the Nazis during the Second World War. Because of this, the IRS wanted to be sure that IRAs couldn’t be used to hide stolen artwork and thus prohibited it in general.
Life Insurance
Life insurance contracts are excluded from IRAs. If you wanted to add a whole life, universal, term, or variable policy then you’re out of luck.
There’s one exception for this, but it’s only for qualified retirement plans. In that case, you are allowed to purchase life insurance, but the amount must be “incidental” compared to the overall value of the account. The IRS uses different percentages depending on the type of life insurance, so you’ll have to check with them if it’s something you want to pursue.
Choose Wisely
The benefits of portfolio diversification via alternatives assets are plentiful. Your retirement accounts inherently exist to provide you with security later in life, so it makes sense to invest in safe assets that will see appreciation. The tax benefits of IRAs can help you save significantly in the end, so they are always a smart choice. It’s what you select for inclusion in your IRA that will make all the difference later on. Choose wisely and you’ll be setting yourself up for the retirement you’ve always dreamed about.
At Regal Assets we believe in providing you with trusted and proven investment options. We take pride in the way we do business and have enjoyed helping our clients grow their portfolios for over a decade now. Our expert team members work side-by-side with you every step of the way, so you can be sure that your assets are protected.
See for yourself what we can offer with our FREE Investor’s Kit. It explains Regal’s IRS-approved investment options and how they work. We’ll help you choose the right strategy to achieve your goals.
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CoinMarketCap CEO Hosts ‘Live’ AMA on Twitter — With No Video
Crypto data site CoinMarketCap hosted a “live” ask me anything, or AMA, session on Twitter with company CEO and founder Brandon Chez — but the session only included Chez on Twitter standby posting comments, not on video.
“I do value my privacy, but [am] not completely opposed to trying more of a live format in the future,” Chez said in a tweet when asked if the AMA format was for anonymity or privacy purposes. “We’ll see how this AMA goes,” he added.
Chez appears quite private
The AMA’s format lines up with Chez’s reputation as someone who prefers to lay low, labeled as CoinMarketCap’s “mysterious” founder in a recent blog post from the company.
Many references and profiles for Chez on various sites also include no pictures of the CoinMarketCap, or CMC, founder. Chez ranks 25th in Cointelegraph’s top 100 most influential people in crypto and blockchain.
The founder answers the public’s questions
As one of the largest crypto data sites in the industry, it makes sense that CMC would be a target for hackers. The company has not faced much in this department though, according to Chez.
“CMC been DDoS’d several times in the early days but I’m happy to say that we’ve never been hacked,” Chez said, referring to distributed denial-of-service attacks — a type of attack which leaves users without website or network access.
A Twitter user also brought up the topic of fake volume numbers on CMC, as research data revealed in 2019. “We’ve released a new metric to give a more accurate picture of activity on exchanges,” Chez said, pointing to a blog post with further information.
As for how Chez got into crypto, the CMC founder noted he stumbled on an article about Bitcoin in 2011 when the asset hit $1, and has been involved since then.
Several months ago, Cointelegraph also reported on CMC adding a liquidity metric to its data sets.
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Americans Aren’t Saving Enough for Retirement
It’s no secret that the retirement outlook for most Americans is dire. While figures for the average amount of retirement savings get bandied about here and there in the media, the median amount of retirement savings in the US is zero. That’s right, more than half of Americans have no retirement savings whatsoever. Whether they’re planning on Social Security and government assistance bailing them out, relying on friends and family, or expecting never to be able to retire, it seems that the American dream of a long and comfortable retirement will be a pipe dream for many.
Special: Secret IRA/401k/TSP Investment Outperforms Stocks
Social Security in Dire Shape
Many older Americans already rely on Social Security for the majority of their income. But the Social Security System is facing its own problems. Within fifteen years, the system’s trust fund is expected to be fully depleted, with payroll taxes only bringing in enough money to fund 80% of expected Social Security outlays. And if we enter a financial crisis anytime soon, the financial position of the trust fund could deteriorate even quicker than that.
Social Security was intended to be a backstop, not a primary source of retirement income. Too many Americans have come to rely on it for retirement income, but Congress seems to be oblivious to the problems with the system. Without some fixes and changes in the near future, millions of retirees could see their plans for retirement completely upended.
More Older Americans Working
In the golden days of retirement, many workers sought to exit the workforce at 55, assuming they had built up enough of a nest egg. And full retirement benefits generally kicked in at 65, by which most workers had left the workforce. But an increasing number of older Americans are working past 65, and even into their 70s.
In fact, over a quarter of Americans between the ages of 65 and 74 are still working. And over the next decade or so, that will increase to over a third of that age cohort. While many older workers continue working because they enjoy their work, or reenter the workforce after retirement because they’re bored, many more keep working because they can’t afford not to.
That of course means fewer jobs and slower advancement for younger Americans, denying them the ability to build their careers and save money to buy a house, start a family, and eventually retire. The more older Americans work, and the longer they remain in the workforce, the stronger that effect will get.
Americans Not Saving Enough
The reason many Americans can’t afford to retire is because they haven’t saved enough. The median retirement account balance is zero, and the median balance among those with retirement accounts is $60,000. That’s a drop in the bucket when medical costs for a couple are expected to top $200,000 in retirement.
All in all there is a $4.3 trillion gap between what American households have saved for retirement and what they should have saved for retirement. That’s a tremendous hole, and there’s almost no likelihood of it being filled anytime soon.
How You Can Save Your Retirement
If you’re one of those people who hasn’t saved enough for retirement, it isn’t too late. You can take steps to improve your financial position and help ensure that you’ll be in sound financial position come retirement.
1. Cut Expenses
The first thing you’ll have to do is cut out any extraneous expenses. Differentiate between needs and wants, so that your needs are paid for and your wants are only met when money allows. In order to figure out which expenses are necessary and which aren’t, you’ll need to establish a budget and track your spending.
Try tracking every purchase you make for a month or two, and you’ll probably be surprised at just how much money you spend. And it’s almost guaranteed that you’ll be able to find areas to cut back your spending. A little here and a little there, and pretty soon you’ll see that saving money is well within your reach.
2. Increase Savings
Once you’re able to cut back on spending, then you can start increasing your savings. Build up a rainy day fund or emergency fund, pay down debts, and get yourself on sound financial footing. Once you’re able to get out of debt and establish your finances, then you can start thinking about how to put your increased savings to work for you.
3. Invest Wisely
The final step is the most important step: making the right investments. That’s where many households give up. They think it’s too complicated to invest, that it takes too much time to do research or requires too much knowledge of financial markets. Or they’re so afraid of losing money that they just stick their money in the bank, where it is guaranteed to lose money to inflation.
But with the right mix of investments, and paying attention to what is happening in financial markets, anyone can build up a nest egg and minimize losses. Creating a properly diversified portfolio, with investments in stocks, bonds, gold and precious metals, real estate, etc. is well within the reach of anyone.
Special: Why 2019 Could Be The End Of Your IRA, 401(k) or TSP
If you’re just starting to think about shoring up your retirement savings, it’s not too late. You’ll want to be attuned to the way markets are working right now, particularly as a stock market crash seems imminent. Keeping your powder dry for a bit, or investing in hedges like gold and silver, aren’t bad ideas if you’re worried about falling stock markets. But the sooner you get your money working for you and building up your nest egg, the better off you’ll be in retirement.
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While Wall Street Falls, Great Stuff Goes Alpha
Friday Four Play: The “Get a Leg up” Edition
It’s no secret … I like being right. But to reference a line from The Matrix: “Not like this. Not like this.”
So far this week, the Dow is off 3,200 points … and counting. Wall Street’s favorite barometer is down roughly 13% from its February 12 high, putting the Dow firmly in correction territory. And with COVID-19 continuing to spread around the globe — U.S. readers, please be careful … it’s here in the wild now — the end of this correction appears to still be a way off.
Yes, this correction is painful — but you are Great Stuff readers. You were prepared. You moved a sizable portion of your portfolio into gold, currencies and other safe-haven investments back in January … right?
You also had a leg up on the rest of the market with Great Stuff’s “4 Stocks to Beat the Wuhan Virus.” And my, what a fine leg that is. “It’s a major award!” (Yes, I’m making a Christmas Story reference in February … so what?)
Let’s take a look at the returns on those four recommendations, shall we?
How do you like them apples?
All returns are calculated as of yesterday’s close, bringing your total average return to 89.5%. It looks even better when you compare it to the S&P 500 Index’s loss of 8.3% for the same period. (Are you guys feeling a little better now?)
As of today, ABBV is in negative territory versus your potential entry point. The company’s $63 billion acquisition of Allergan PLC (NYSE: AGN) overshadows any coronavirus benefits right now, but it’ll straighten itself out eventually.
However, the rest are going gangbusters. Alpha Pro Tech, in particular, is on fire! Remember: The company makes face masks, gowns and various other infection-control items for both the medical industry and the general public. So, you know it’s doing well in corona world.
For caution’s sake, if you bought into APT following Great Stuff’s recommendation, we officially recommend that you sell today.
There’s no need to be greedy after a win like this. Be like Billy Joe and Bobbie Sue — take the money and run!
But if you’re worried about “opportunity cost” or want to keep exposure through the rest of this COVID-19 outbreak, take at least half of your position off the table. That guarantees you a win on this trade.
Either way, congratulations are in order! Good job, you!
And now for something completely different … here’s your Friday Four Play:
No. 1: Beyond Crazy
Beyond Meat Inc. (Nasdaq: BYND) investors got something to cheer about today —whether they know it or not.
The veggie burger maker reported that retail sales surged 198% and food service/restaurant revenue spiked 223%! How’s that for beyond?
But … BYND shares are plummeting today.
Why? Well, Beyond posted a surprise loss of a penny per share, versus expectations for a gain of a penny. Furthermore, guidance was well short of Wall Street’s target. Beyond expects earnings of $25.3 million, while the consensus looked for $50.2 million.
Two things to note here:
One, Beyond is conservative with guidance due to the COVID-19 outbreak. Two, the company is spending money on growth … and it needs to.
“We would be crazy not to invest in growth right now,” said CEO Ethan Brown. “There is just so much opportunity right now. We want to make sure we move as fast as we can to open up these markets.”
Sure, BYND trades at elevated valuations that, honestly, seem a bit beyond belief. However, the company is part of mega trends in sustainability and alternative foods. It needs to be proactive now. As a result of that proactive attitude, Beyond is getting punished.
If you were looking to invest in BYND but missed the initial rally, this sell-off is the opportunity you’ve been waiting for.
No. 2: I Want to Ride My Bicycle
I want to ride it where I like … not in my living room. That’s the message that Wall Street is sending Peloton Interactive Inc. (Nasdaq: PTON) this week.
Analysts have repeatedly pushed the idea that Peloton will benefit from the COVID-19 outbreak as people stay home to avoid becoming a statistic. “We believe certain U.S. consumers will be less comfortable over time going to their gym and more likely to order a Peloton bike to stay home,” said Needham analyst Laura Martin in a note to clients this week.
Additionally, Peloton announced yesterday that it reached a settlement with the National Music Publishers Association (NMPA). The company was using music with its streamed workout sessions without the proper licensing. That’s copyright infringement, and the NMPA initially sued Peloton for $300 million because of it.
But the two have since made up. Peloton even agreed to collaborate with NMPA to “further optimize” the music-licensing process.
Despite today’s sharp decline, PTON is still up more than 5% on the week. So, at least the stock isn’t spinning its wheels.
No. 3: The Mouse’s House Is Cheap
The Walt Disney Co. (NYSE: DIS) has had a rough week. (Haven’t we all?)
The stock initially dove on news that CEO Bob Iger would step down immediately. Then, as coronavirus fears accelerated, Tokyo Disneyland announced it was closing through mid-March. Analysts started questioning theme park revenue for Disney, and the shares fell further.
But BMO Capital Markets sees this dip in DIS as an opportunity. This morning, the ratings firm named Disney its top pick, ousting Netflix Inc. (Nasdaq: NFLX) from that lofty position.
BMO said that DIS is “increasingly baking in more challenges already. We would use any near-term weakness related to COVID-19 virus as an opportunity to build long-term positions.”
Remember, kids: Disney isn’t going anywhere. The company dominated the silver screen last year, and it’s poised to dominate video streaming in the years to come. I have to agree with BMO. This dip is an opportunity.
No. 4: No Fair
If you ever wondered what an online version of Bed Bath & Beyond Inc. (Nasdaq: BBBY) would look like … look no further than Wayfair Inc. (NYSE: W).
The company sells about 14 million products online, including furniture, décor, decorative accents … etcetera. It’s basically Bed Bath & Online with a fancier name. If you remember how BBBY’s earnings turned out, you can guess how Wayfair’s doing today.
The company reported a wider-than-expected quarterly loss of $2.80 per share, missed on revenue and reported that revenue growth trended below 20% — the company’s historical norm.
Guidance was also well below expectations, with first-quarter margins in the negative 7.3% to 7.8% range. Yes … negative margins.
Remember that lesson from the dot-com bust? Just because a company operates online doesn’t mean it’s automatically better.
Great Stuff: Congratulates YOU!
Did you crack open the champagne yet? No? Well, what’s stopping you?! Congratulations are in order, I tell you.
It’s not every week that you can boast about a 300%-plus gain … especially in the same week both the Dow and S&P 500 shed over 10%.
You won’t find any “I told you so!” here … this win is all about you, dear readers. If you took Great Stuff’s advice on buying when others were fearful — and oh, how fearful they were — you should be sitting on fresh gains while the rest of the market sees red.
Be the envy of your friends and fellow investors. Hey, if you don’t brag to them, why not brag to us? We’d love to hear how you’ve fared with Great Stuff picks. Shoot us a message at GreatStuffToday@banyanhill.com and let us know what’s up!
If there’s one single thing to take away from this crazy week, it’s this…
Your gain on APT just shows that there’s no shortage of good buys in today’s market … and there are discounts just waiting for you to find them. Whether you made bank on APT or not, don’t give up on finding your next bargain.
Jeff Yastine’s research can show you how. Jeff sifts through the market with a fine-toothed comb — hey, just like Great Stuff! — to find well-run, growing businesses that trade for pennies on the dollar. These are the solid businesses that will survive this outbreak, no matter how bad the sell-off makes it seem.
Click here to learn more about Jeff Yastine’s research.
That’s all for this week. But don’t fret, you can get more meme-y market goodness by following us on Facebook and Twitter!
Until next time, good trading!
Regards,
Joseph Hargett
Editor, Great Stuff
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Cash in on Precision Medicine’s 500% Boom
The year is 2025.
The bedroom lights slowly illuminate as you wake up, just as you reach your optimal seven hours and 36 minutes of sleep.
You roll over and glance at your iPhone to see that your artificial intelligence health coach has an urgent message.
While you were sleeping last night, deep into REM, the smartwatch on your wrist detected a rapid heart rate.
Your health app looked through your heart history, diet and exercise to see if anything had changed recently.
It also took the additional step of searching your genetic screens to see what this irregular heartbeat could mean for someone with your genetic history.
Finally, it sent this data to your cardiologist and scheduled a 9 a.m. video call to go over your symptoms…
All while you were sleeping!
This technological breakthrough is happening right now.
Some call it genetic testing. For others, it’s DNA sequencing. But no matter how you want to phrase it, the era of precision medicine has arrived.
A patient’s diagnosis and treatment is now based on their individual genetic characteristics.
That’s because the convergence of high-powered computers and breakthroughs in the field of genetics is making this new paradigm of health care a reality for everyone.
Cracking the Genetic Code
In 1977, a Cambridge scientist named Frederick Sanger sequenced DNA for the first time.
By running an electric current through a gel into cell tissue, he found that DNA contained a sequence of molecules in specific patterns.
Even though it was only possible to sequence a small amount of DNA at a time, Sanger’s discovery was the genetic science equivalent of the moon landing. It started the race to crack the genetic code.
It was a small step for a man, a huge step for mankind.
In the next decade, the National Institutes of Health launched the Human Genome Project.
Its lofty goal was sequencing and mapping the first human genome. The project cost $2.7 billion and took 13 years to complete.
At the same time, a science entrepreneur named Craig Venter discovered an even faster approach.
The race to find a cheaper alternative to genome sequencing was on.
And along the way, something incredible happened…
Genetic Testing for Everyone
The quest to cheaply map the human genome converged with computing speeds that were improving exponentially.
This faster, cheaper computational power dramatically dropped the cost of sequencing the genome at a pace no one could have anticipated.
Think about this for a moment…
In the early 2000s, it cost about $100 million to decode one individual’s genome.
Ten years later, when Apple co-founder Steve Jobs found out he had pancreatic cancer, he spent $100,000 to unlock his genome.
Jobs was trying different treatments and hoped DNA would provide clues about where to turn next.
Even if you don’t have Jobs’ fortune, breakthrough technologies such as artificial intelligence and machine learning are making a full genetic screen possible for less than $1,000.
Companies such as 23andMe and Ancestry.com even offer take-home tests that link your DNA to distant relatives. They can also check your genetic risk for certain diseases.
You can buy a take-home test today for as little as $99.
But the precision medicine market expands beyond these two examples. In fact, it has the potential to grow to $22.7 billion by 2025.
3 Huge Breakthroughs
Precision medicine makes it possible to better diagnose and recommend life-saving treatments.
Here are three areas already impacted by precision medicine:
- Breast cancer: About 30% of breast cancer patients don’t respond to standard therapy. Precision medicine can identify this problem before therapy starts.
- Melanoma: Nearly 60% of patients with melanoma have a certain kind of genetic mutation. Doctors can now use precision medicine to find this mutation and prescribe treatment.
- Cardiovascular disease: Precision medicine can determine a heart transplant recipient’s probability of rejecting a transplanted organ.
Invest in the Rise of Precision Medicine
Because of technological improvements and declining costs, the genetic testing market is expected to grow nearly sixfold in the next decade.
That’s an increase from $8.5 billion in 2019 to $52.5 billion in 2030.
In other words, it’s a staggering compound annual growth rate of 18%!
For Automatic Fortunes readers, we’ve identified one specific company that’s capitalizing on the explosive growth of the genetic testing market.
This company offers hundreds of genetic tests and maintains the database for doctors and clinical researchers. That makes it an integral part of precision medicine.
You should invest in precision medicine now … before your doctor orders your first genetic test.
To get the name and ticker symbol of the company I recommended to my subscribers, check out my Automatic Fortunes service.
Regards,
Editor, Automatic Fortunes
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Millennials: Start Investing as Early as Possible
Investing is extremely important, since it will play a major role in almost everyone’s life, getting them into and through retirement.
Because of this, it’s imperative that saving and growing your money becomes a priority, as the attention and resources you spend today will only snowball in the future.
When most people consider investing, they think that the number one factor in determining your success is the return rate you earn on your capital and how much percentage growth you can ultimately make when it’s all said and done.
While earning a solid return rate is important, what’s also equally as important is investing for as long a time period as possible to take advantage of the compounding affect.
An investor who starts with nothing, saves $5,000 a year and earns a compounded annual growth rate of 6% will have a portfolio value of more than $395,000 after 30 years.
If they continued another five years, they would have had more than $555,000 a difference of $160,000 and if they waited another 10 years — 40 years total — they would have had roughly $775,000, nearly twice as much as their value at the 30-year marker.
This is the power of compound interest, and why it’s so important to start investing as early as possible.
Investing can seem daunting and intimidating, and even if you don’t have much money, it doesn’t take much to start, but just starting is the biggest factor, and then letting your savings and earnings grow and compound will take care of the rest.
If you don’t have much and just want to get started by gaining a little exposure to stocks, similar to what you would do if you were to go to a bank and buy a mutual fund (but with much less in transaction fees), a top exchange-traded fund (ETF) to consider would be iShares TSX/S&P 60 Index ETF (TSX:XIU).
XIU offers investors exposure to 60 of the biggest and best stocks on the TSX, diversified across 10 industries.
The exposure it offers investors for the small management fee it charges makes it a high-quality choice, especially considering its yield pays out much more than that.
The fund’s top holdings include investor favourites such as Canadian National Rail, energy giant Enbridge, and massive Canadian banks like Royal Bank of Canada.
Its biggest industries consist of financials, energy, and industrials, which have roughly 35%, 18%, and 10% of the fund’s assets, respectively.
Up until this week, when markets began to selloff, it was up roughly 12% over the last 12 months, which goes to show its growth potential in the good times.
Since Monday, however, when global markets began selling off, the stock has sold off by almost 10%, creating a great entry point for long-term investors to gain some exposure.
It now has a dividend yield of roughly 3%, a price-to-earnings ratio of just 15.6 times, and all for a management expense ratio of just 0.18%.
It’s worth noting that the fund is only exposed to Canadian stocks, so although there may be some slight exposure to other countries’ economies through a Canadian stock with operations there, almost all the exposure of the fund will be to the Canadian economy.
Because of this, you may want to diversify your funds a bit and add a U.S index fund or an emerging markets index fund to diversify your portfolio geographically.
Whichever way you choose to invest, always remember that in addition to trying to pick the best possible investments, it’s also just as important to start investing as soon as possible and save as much money as possible, because that money and time will end up going a long way, and your future will be much better off.
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Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of and recommends Canadian National Railway and Enbridge. The Motley Fool recommends Canadian National Railway.
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How Dividend Stocks Can Start Your 4-Hour Workweek
“The 4-Hour Work Week” came out in 2009. It is a powerful book penned by Tim Ferriss on how to create a lifestyle and how you can get there.
Almost 11 years on, the book still has a remarkable influence on the lives of so many people. The eye-opening insights and compelling stories in this book give you a detailed guide so you can create your own 4-Hour Work Week.
Today I’m going to discuss this highly influential book to help you understand the 4-hour workweek. I will also talk about the Chemtrade Logistics Income Fund (TSX:CHE.UN) stock, an income-producing asset that can help you get on your path to an ideal lifestyle.
The fundamentals defined by Tim Ferriss
The book primarily consists of four sections:
- D is for Definition
- E is for Elimination
- A is for Automation
- L is for Liberation
The first section refers to the idea of removing yourself from adhering to the concept of working yourself till you drop for just nominal rewards. Tim Ferriss talks about spending a significant period to define your goals, dreams, and aspirations.
Think about what you would be doing were it not for the things you absolutely must do. After that, you should wonder what’s the worst that can happen if you pursue those goals.
The second section talks about techniques you can use to improve your daily routine. It focuses on removing the most mundane aspects of your lives to make yourself more efficient. The goal is that you should learn how to compress your time for productivity.
Next comes the lengthiest section on how to become an entrepreneur and creating a stream of passive income. Ferriss talks about salesmanship as a means of becoming a passive income-producing middleman. I’ll talk about passive income-producing assets that will make you more self-reliant.
The last section puts all the pieces of the puzzle together and paints an overall picture for you to see clearly and effectively create the 4-hour workweek.
A dividend stock to help you achieve the 4-hour workweek
As a Canadian, you have the remarkable advantage of scooping up substantial tax-free income. The best way to do it is to focus your approach towards investing in high income-producing assets and holding them in your Tax-Free Savings Account (TFSA).
A stock like Chemtrade Logistics can offer you an ideal opportunity to achieve that goal. The company provides industrial chemicals and services in Canada, the U.S., and South America.
At writing, the stock is trading for $8.93 per share. Chemtrade’s affordable shares are made more attractive through its massive $0.10 dividends that translate to a dividend yield of 13.44%.
While the stock has been quite volatile recently, it’s oversold right now and is unlikely to see any dividend cuts. The oversold status puts the stock in a buy signal territory.
Foolish takeaway
Storing high-yield dividend-paying assets in your TFSA can grow your wealth through capital gains and payouts without paying income tax to the Canada Revenue Agency (CRA). Allocating some of the contribution room in your TFSA to the Chemtrade stock can help create an automated source of passive income.
If you can build a successful portfolio of dividend-paying stocks in your TFSA, you might be able to earn an amount that can allow you to lead an ideal lifestyle and leave you free to pursue your goals in life without worrying about income.
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House Committee to Hold Hearing on Benefits of Blockchain
Blockchain and cryptocurrencies are affecting the way both large corporations and small businesses operate, and governments are taking notice. Next week, a committee in the U.S. House of Representatives will hold a hearing focusing on blockchain’s impact on small businesses.
The Committee on Small Business will hold a hearing titled “Building Blocks of Change: The Benefits of Blockchain Technology for Small Businesses,” scheduled for Mar. 4 in Washington DC.
According to their website, the committee, under the leadership of Chairwoman Nydia Velázquez (D-NY), will be focusing on “using blockchain technology to help small businesses boost productivity, increase security, open new markets, and change the way business is done.”
Attendees on the list include Shane Bigelow, CEO of Ownum; Dawn Dickson, CEO of PopCom; Marvin Ammori, general counsel for Protocol Labs; and Jim Harper, visiting fellow at the American Enterprise Institute.
Cryptocurrency and blockchain under scrutiny in the United States
Hardly the first time to be addressed by members of the House of Representatives, crypto and blockchain are often in a gray area when it comes to legislation and enforcement.
Chairwoman Velázquez was also in attendance at a hearing at the House Committee on Financial Services on Jul. 17 to discuss the impact of Facebook’s digital currency, Libra, on “consumers, investors, and the American financial system.” In response to potential regulatory approvals for the cryptocurrency, Velázquez said:
“We do not want to stifle innovation, but we do have a healthy dose of skepticism.”
While the U.S. government is moving closer to accepting blockchain and crypto with hearings like these, governments at the state level are doing the same.
New York and New Jersey already require cryptocurrency firms obtain a proper license to operate. Last December, representatives in California likewise proposed legislation providing legal assurance around the use of blockchain technology.
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No. 1 Strategy for the Coronavirus Stock Market Rebound
Story Highlights:
- Why you shouldn’t panic over the market dips this week.
- A new coronavirus breakthrough shines a spotlight on a precision medicine ETF that’s on a tear.
- Paul Mampilly’s secret investing weapon to use during the “coronavirus effect” on the stock market.
The coronavirus vaccine is here!
We predicted it a few weeks back, but it got here even faster than we thought.
Here’s what’s really incredible about this breakthrough: Mainstream medicine said it couldn’t be done. But then precision medicine turned it around in no time.
This is exactly why the old “one size fits all” approach to medicine is America 1.0. Precision gene-based medicine is America 2.0 and will lead you to the biggest stock market winners.
So even though you’ve seen a dip in the markets this week, don’t panic. This “coronavirus effect” on stocks is temporary.
There’s a saying in medical circles: Sometimes it takes a crisis to prompt a breakthrough.
It’s what we saw with past outbreaks of Ebola, West Nile virus and Zika — all of which led to new and better ways to diagnose, treat and prevent these viral villains.
Now, we’re seeing the same thing with the coronavirus.
And it also means there’s a big opportunity to invest in these precision medicine miracles early on, before they ultimately reinvent our entire health care system.
Now’s the time to stake your claim on the precision medicine market before it soars by 985% to a projected $217 billion by 2028.
Seize This Huge Opportunity, Don’t Panic Over the Risk
Not just one, but three biotechs made a move on the coronavirus vaccine:
- Biotech startup Moderna Inc. developed and shipped the first batches of its experimental coronavirus vaccine to the National Institutes of Allergy and Infectious Diseases for testing this week. Even though the Dow Jones Industrial Average plunged 2,000 points on news about the spread of the coronavirus, Moderna’s stock shot up an incredible 30%.
- In addition, federal officials announced this week that they are planning a clinical trial of an experimental drug treatment for the coronavirus — called remdesivir — developed by another biotech, Gilead Sciences Inc. The company’s stock also shot up 13% this week — nearly 8% about an hour after the news.
- A third company, Texas genetic engineering startup Greffex Inc., said it is also working with the Food and Drug Administration to fast-track the coronavirus vaccine for use in China and around the world.
These breakthroughs spotlight the incredible speed and efficiency that gene-based precision medicine is bringing to health care.
As remarkable as they are, this is just the beginning. The genetic techniques Moderna, Gilead and Greffex are using also hold promise in targeting influenza and other genetically linked conditions, including cancer, heart disease, diabetes and even Alzheimer’s.
Scientists and biotech companies have been moving at record speed to create new tests to diagnose the virus, as well as vaccines and treatments — some using new DNA and RNA therapies.
By using cutting-edge genetic techniques, biotech engineers sidestep the hurdles that take conventional vaccines years, or even decades, and billions of dollars to develop.
That’s why the emerging gene-based precision medicine sector is one of our Bold Profits mega trends.
Smart investors who buy into the biotech companies leading these advances can make a bundle — if they put their money into the right stocks.
According to Global Market Insights, precision medicine is projected to become a $217 billion industry by 2028 — up from just $39 billion in 2013. That’s a staggering growth rate of 985% since 2013.
Greffex is a privately held company, so you can’t buy stock. But we’ve found another way in.
You can gain exposure to a variety of innovative stocks through an exchange-traded fund (ETF) that pulls in biotech and genetic engineering companies.
I recommend the ARK Innovation ETF (NYSE: ARKK), which has been on a tear for the past year. Even though the fund took a minor hit this week, along with the rest of the market, it’s still up nearly 37% since October.
Master the Rebound Profit Strategy for Coronavirus Profits
This week’s sell-off was not spurred by hard facts. It came from investors’ panic over news headlines.
If those investors would have looked deeper into why their stocks were plummeting, they would have seen what we did — a domino effect caused by sheer panic selling.
This is exactly how Paul Mampilly created a secret investing weapon.
If you look past the “coronavirus effect” on the stock market, you’ll see it was news of the outbreak that sparked panic selling in stocks. Weak hands were washed out of the markets.
The same thing happened in 2016. Netflix plunged 40% on investor pessimism. Does that mean Netflix was a bad investment? No. It showed clear signs of a rebound. Now Netflix is up a whopping 243% from its low.
Paul sees the same pessimism happening now with the coronavirus.
In fact, because of the speed prices have dropped, he thinks we’re near the bottom. And with an eye on America 2.0, he’s seeing very clear signs of a rebound in certain stocks. If you want to get ahead of the coronavirus panic, click here to learn about Paul’s Rebound Profit strategy.
The takeaway: Crises that rile the markets day to day will come and go. But, in the long run, stocks at the heart of the America 2.0 mega trends will outlast those temporary blips and weather the storm.
To your health and wealth,
Nick Tate
Senior Editorial Manager, Banyan Hill Publishing
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Survive the Meltdown — Don’t Panic Now
Panic is setting in.
I hear whispers about the outbreak walking down the street. Small talk around the office isn’t complete without some mention of the virus.
It’s too early to know whether the world can shake off the virus … or if we are going to see panic set in as nations try to close their borders.
But times like this remind me of an old mantra: “Plan your dive, and dive your plan.”
I would hammer this into my students’ heads when I taught diving classes.
The idea is nothing new. Plan out your best- and worst-case scenarios.
Then, no matter what happens, you know what to do. You have a plan.
And having a plan is key for not panicking.
In today’s market, you need to know your plan and stick to it…
Because fear is spreading, and you’re going to get hurt if you don’t have one.
Investment Advice Everywhere
The market is falling, and every TV personality, analyst and checkout clerk is going to start telling you what to do with your money:
“Time to get into gold.”
“Sell all your stocks!”
“Hedge your portfolio with puts.”
“Buy the dip!”
Each of them could have a valid point … if it’s part of a bigger plan.
But the worst thing an investor can do is stray from their plan.
If you don’t have a plan, you need to make one. Now.
A Dose of Reality
We need to put the coronavirus in perspective. It has a death rate of about 2%. For comparison, the seasonal flu is usually below 0.5%.
The SARS epidemic had a much higher death rate of about 14%. And Ebola is one of the deadliest viruses at roughly 50%.
That means the coronavirus isn’t to be taken lightly. But it’s also nowhere near as deadly as other epidemics that grabbed this much media attention.
The real threat to the economy comes from mass panic.
Government officials could enforce quarantines. Transportation will slow and consumption will fall if people are too afraid to go out.
But these are all temporary issues. The outbreak will either be contained or burn itself out.
And the economy will bounce back.
Consider subscribing to the Alpha Investor Report. Every month, Charles Mizrahi brings his readers a growing business that’s trading at a bargain price.
He focuses on the fundamentals and ignores the headlines. That’s a sound strategy for surviving the market’s mania and anxiety.
Good investing,
Managing Editorial Analyst, Winning Investor Daily
P.S. Check out my latest video below for this week’s marijuana market update. Also, don’t forget to subscribe to my YouTube channel — and click the bell if you want to get a reminder every time I upload a new video!
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четверг, 27 февраля 2020 г.
TD’s (TSX:TD) Stock Price: Should You Buy the Dip?
Toronto-Dominion Bank (TSX:TD)(NYSE:TD) just reported fiscal Q1 earning results that missed analyst expectations, and investors responded by driving the stock to a 12-month low.
Let’s take a look at Canada’s second-largest financial institution to see if it deserves to be on your buy list today.
Results
TD reported adjusted net income of $3.07 billion for the first three months of the fiscal year compared to $2.95 billion in the same period last year. On a per-share basis, diluted earnings came in at $1.66, representing a 6% year-over-year increase.
In the Canadian retail banking operations, loan volumes increased 4%, deposit volumes rose 7%, and wealth assets increased 10%. Despite the solid growth, adjusted net income slipped 2% compared to Q1 2019.
South of the border, TD has a large retail banking presence that stretches from Maine all the way down the east coast to Florida. Interest rate cuts made by the U.S. Federal Reserve last year put pressure on TD’s net interest margins. Net income in U.S. dollars fell 7% year over year for the quarter, and 8% when converted to Canadian currency.
The wholesale banking group was the star in the first quarter with revenue rising 23% compared to the previous quarter and up 80% over Q1 2019. Net income in the group came in at $281 million compared to $160 million in Q4 2019 and a loss in fiscal Q1 last year.
Results in this division tend to be more volatile than in the other business segments.
Risks?
Provisions for credit losses jumped from $855 million in Q1 2019 to $923 million. The largest increase occurred in the Canadian retail banking segment rising from $310 million to $391 million. Provisions for credit losses in the U.S. retail banking group rose from $311 million to $323 million.
Canadians are carrying record levels of debt, and there is a risk business loan defaults could rise if the economic impact from the coronavirus outbreak becomes more widespread.
On the housing side, TD finished Q1 2020 with $293 billion in Canadian residential housing loans. Insured loans cover 30% of the portfolio and the loan-to-value ratio on the uninsured portion is 54%. This means house prices would have to fall considerably before TD takes a meaningful hit.
Interest rates are expected to remain stable or even fall in the medium term, and plunging bond yields will make fixed-rate mortgages cheaper. As a result, existing homeowners will be able to renew at decent rates.
A steep increase in unemployment would be the biggest risk to the bank. For the moment, the Canadian jobless rate remains low.
Dividends
TD just raised its quarterly dividend by $0.05 to $0.79 per share. That’s good for a yield of 4.5%.
The dividend increase indicates the board is comfortable with the bank’s revenue and profit outlook. TD has raised the payout by a compound annual rate of about 105 over the past 20 years.
Should you buy?
TD is down from $76 per share last week to $70 at the time of writing. More weakness could be on the way in the near term if the broader market correction picks up steam. However, the stock is starting to look cheap and history suggests that buying TD on any meaningful dip tends to be a smart move for buy-and-hold investors.
At the current price, you get paid well to wait out any additional volatility and further downside should be viewed as an opportunity to add shares to the position.
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Fool contributor Andrew Walker has no position in any stock mentioned.
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