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Don’t look now, but after a tough first half of this year, cryptos are quietly staging a rapid and furious comeback from their lows over the previous month and a half—just as many analysts appeared to be writing them off. If you are a new crypto investor eager to get your feet wet in the digital pond after this resurgence in optimism, I’d suggest buying Ethereum (ETH -4.73%).

Momentum returns 

Ethereum has risen nearly 97 percent since bottoming at $897 on June 18, owing to the significant market swings that have taken place as a result of investor sentiment.If you’re thinking about whether it’s too late to invest in Ethereum, keep in mind that it’s still down 63% from its all-time high of $4,847, which it achieved last November. Furthermore, if widespread adoption occurs for Ethereum, everyone will probably be “early,” according to experts. Given how volatile cryptocurrencies are on a daily basis, an investor interested in putting money into Ethereum but concerned about jumping in during a run-up may profit from dollar-cost averaging, which has long been used by equity investors to start a smaller position now and then add to it over time rather than investing everything at once.

Coming up on The Merge 

The major reason for Ethereum’s recent jump is the pending shift to proof of stake. This transformation, often known as The Merge, is the biggest change to the Ethereum network and its users in years, if not ever. Switching to a proof-of-stake consensus should help solve two of Ethereum’s long-standing problems – high transaction costs and slow transaction speeds. Furthermore, because of this change, more individuals will be able to participate in the ETH network and earn rewards by staking their ether. This essentially means that users will be able to contribute to the security of the network by committing a portion of their Ethereum to validate the transactions in exchange for a share of staking profits. Finally, the transition can assist Ethereum in becoming more environmentally friendly by decreasing its carbon footprint, which has been a common complaint leveled at proof-of-work cryptos over the years.

The foundation of DeFi

Ethereum has a market cap of $208 billion, which vastly eclipses all other cryptocurrencies except for Bitcoin. It was originally released in 2015, long before most of today’s other prominent cryptocurrencies were even conceived. Ethereum is, therefore, the system that underpins much of the current decentralized finance (DeFi) ecosystem. Many other well-known cryptos are ERC-20 tokens based on Ethereum, including Uniswap, USD Coin, and Shiba Inu. Polygon was made as a scaling solution for the Ethereum environment. After a tremendous run this summer, Polygon is now ranked 13th in terms of market capitalization.

Additionally, the significance of Ethereum to DeFi and bitcoin as a whole is underlined by the fact that many other top cryptocurrencies rely on the Ethereum Virtual Machine, which is essentially a middleware layer that enables smart contracts from Ethereum to execute on other blockchains.

Author: Scott Dowdy

The S&P 500 has been flirting with bear market territory for the last several weeks, causing investors to suffer. Although the market has resumed its upward climb from its June lows, numerous stocks are still trading at considerable losses below their 12-month highs.

Despite the fact that many businesses have reached bargain levels, due to its drop, a lot of firms are currently trading at reduced prices. Two consumer-related equities may be especially appealing right now: Booking Holdings (BKNG -0.44%) and Qualcomm (QCOM -3.55%). Let’s take a deeper look.

Booking Holdings

Priceline.com is a multinational corporation that owns numerous travel-related web properties, including Priceline, KAYAK, Agoda, and current namesake Booking.com. The bear market has reduced the company’s stock price to less than $2,000 per share, down nearly 30% from its peak.

Despite this declining stock price, the firm’s financials are becoming increasingly healthy. The company’s revenue for the first two quarters of 2022 was roughly $7 billion, which is greater than the $6.7 billion it reported in the first half of 2019 before the pandemic.

Its $157 million net profit for the first six months of this year is a tiny fraction of the $1.7 billion made in 2019. Over the three-year stretch, operating costs increased by 19%, and losses on its assets in a number of equity securities cut earnings by more than $700 million.

Booking didn’t give specific revenue expectations, but it did say on its Q2 2022 earnings call that it expects to report “record” revenue in the third quarter. Even so, if travel sales continue at the same pace as they have been, Booking will have a forward P/E of 20 – which might make it a bargain if growth exceeds 2019 levels.

Qualcomm

Qualcomm is typically seen as a technology stock, owing to its technological preeminence in smartphone microprocessors. Nonetheless, it still relies largely on the consumer for revenue, which adds further pressure on the company’s earnings.

Qualcomm’s own expectations appear to have been influenced by consumer trends. For the next fiscal fourth quarter of 2022, Qualcomm predicted revenue of $11 billion to $11.8 billion, representing year-over-year growth of 23%. That would compare to fiscal Q3, when handset sales grew 59% year over year.

However, a 23 percent increase in sales indicates that this market is resilient. Grand View Research expects the 5G chipset market to grow at a compound annual rate (CAGR) of 69% throughout 2025. Given this prediction, it appears likely that the anticipated slowing will not continue as the 5G upgrade cycle continues.

The company’s expected development may explain the stock’s relative stability over the past year, despite a 6% decline in the S&P 500’s total return. A P/E of 13 indicates that the market does not appear to fully recognize this potential. Investors should consider purchasing Qualcomm at these prices.

Author: Steven Sinclaire

It’s clear why dividend-paying companies might be appealing to investors. After all, who doesn’t want the opportunity to sit back and receive a constant supply of money?

While dividends can be a wonderful source of passive income, they aren’t always an excellent investment. Here’s why it’s essential to exercise caution with dividend stocks – or perhaps avoid them entirely.

1. They may not align with your investing strategy

Companies that pay dividends to shareholders decide to distribute their earnings rather than invest more money in the company. And this isn’t always a positive thing. Dividend-paying firms may stifle their own development by distributing funds instead of reinvesting them. Furthermore, share price appreciation might be slower as a result of this practice.

Dividend stocks may not be the best fit for your investing plan if it focuses on building up a portfolio of growing firms. And there’s no sense in deviating from your approach just because things are going well thus far.

2. They can increase your tax bill

If you invest in dividend-paying equities through a tax-advantaged retirement program like a 401(k) or IRA, the dividends you receive on an ongoing basis will not be taxed. However, if you own dividend stocks in a brokerage account, those payments may result in a higher tax burden for you.

Although it’s true that dividends are taxed at a lower rate than ordinary income, the effect may not be as severe. However, taxes are taxes in the end, and if you don’t want to pay the IRS more each year, you may wish to avoid dividend-paying stocks.

3. They can lead you to make poor investment choices

It’s simple to get caught up in the allure of a high dividend. But you could be lured into putting your money into firms that aren’t really viable.

It’s a common misconception that corporations offering large dividends can afford to do so, and as a result, they’re clearly doing well. That’s comparable to claiming that the guy in your neighborhood who drives a $90,000 sports vehicle must be rich because he can afford those automobile payments. In reality, that guy might be drowning in debt or have no money saved, and his expensive vehicle is simply hiding it.

In the case of dividend stocks, this is also true. Companies that pay significant dividends may not be doing well financially. If you don’t make the distinction, you could become dissatisfied with the stocks you invest in.

Author: Scott Dowdy

The belief that Social Security is rapidly running out of money is one of the most popular misconceptions about the program. While Social Security’s trust funds may be depleted within a decade and a half, it will also have a large amount of money coming in.

The reason? Social Security’s primary source of revenue is payroll taxes, which none of us really enjoy paying. Now that the revenue stream will be lost once baby boomers start retiring in droves, while younger employees will start to replace them, it may not happen fast enough.

Social Security will continue to pay benefits as long as it continues to collect payroll taxes. However, that does not imply there will not be significant changes in the manner in which payments are made.

It isn’t the worst-case scenario

When it comes to Social Security, most of us are naturally gloomy because the media frequently emphasizes the fact that the Social Security program is facing a significant financial deficit in the years ahead. That’s correct.

However, the organization isn’t in danger of going bankrupt. As a result, today’s employees don’t have to write off the prospect of obtaining retirement funds.

However, without an agreement on raising taxes, they may vary widely. For example, if lawmakers are unable to come up with a solution to boost Social Security income, they may reduce them uniformly across the board.

Social Security benefits are now merely being talked about in terms of a 20% reduction, not the 50% or 60% cuts that were previously proposed. If anything, seniors are anticipating a decrease in their Social Security payments of around 20%. However, because this represents a big loss of income for people who get the majority of their retirement funds from Social Security, it’s something that retirees will need to anticipate and employees will need to plan for.

Meanwhile, lawmakers might have to take some desperate actions to preserve Social Security’s long-term viability. That could imply changing the rules regarding eligibility.

Currently, anybody who was born in 1960 or after is entitled to the full amount of their monthly Social Security payments at age 67. However, lawmakers might need to raise the retirement age back to 68 or 69 in order to relieve some of the strain on Social Security.

There are also payroll taxes, which are necessary to run the program. Higher-income individuals are currently only taxed on a portion of their earnings. If there is a need for money, lawmakers may choose to raise the wage cap so that employees must pay Social Security contributions on all of their income.

Everyone should brace for change

The good news is that the Social Security system is not in danger of vanishing. The unpleasant news, on the other hand, is that substantial modifications to the program may be unavoidable in order to maintain it for years to come. This will be something both current beneficiaries and workers must prepare for. Furthermore, as more changes to Social Security are announced down the road, those who are already in retirement might need to change their expectations accordingly.

Author: Scott Dowdy

Starbucks (SBUX) has taken a beating lately. The firm’s performance over the past year is 27%, far worse than the Dow Jones Industrial Average’s 6% drop.

Starbucks’ share price guzzling has been kept in check, however, by supply chain shortages, a growing recession, and inflation. On the other hand, they weren’t the highlights of the company’s financial third-quarter results, which were announced on August 2.

Let’s look at the highlights and the primary issue that weighed on Starbucks’ excellent performance

1 green flag: Starbucks is becoming a worldwide brand

Starbucks is a firm that continues to grow in popularity throughout the world. The company’s main strength is its size in China and the United States, which has remained consistent since Q3. Revenue from these two countries accounted for 75% of total revenue during the quarter. Starbucks, on the other hand, saw considerable success with its  business operations outside these two countries.

Starbucks reported record revenue and earnings for the third quarter of 2017, fueled by new store openings in Canada, China, Mexico and the United States. International comparable-store sales increased in the double digits, with international markets (excluding China) recording sales growth. In Japan – Starbucks’ third-largest market – comparable sales accelerated to their fastest rate since the year began.

Global expansion, as demonstrated by this quarter’s earnings, is paying off. Starbucks’ global brand continues to strengthen; not only does the firm have operations in China and the United States, but it may also be regarded as the world’s first coffee business to have a globally recognized brand because of its presence across the world.

1 red flag: The China knife cuts both ways

Despite a very good quarter for Starbucks, one area tanked: China. In contrast to many American companies, Starbucks has succeeded in China. Starbucks currently has over 5,700 outlets in China and last year generated almost $3.7 billion in revenue from the region.

However, the COVID-19 security restrictions have taken their toll on Starbucks. In Q3, comparable store sales in China fell 44%, dragging total worldwide comparable store sales down 18% versus the prior year despite good execution in virtually all areas.

The bottom line is that doing business in China is a risk. In recent years, Starbucks has benefited from the prosperous Chinese economy and rising consumer demand. That said, the economic climate is difficult to predict, which means businesses working in China might experience significant swings in fortune. Q3 was a reminder of this fact.

Author: Blake Ambrose

Given the “good news is bad news” reality that we’re witnessing play out these days, today’s rally in cryptocurrency markets has caught many investors off guard. Last week’s strong employment figures indicated to investors that the Federal Reserve would be less likely to remove its foot from the gas pedal when it comes to rate hikes. Nonetheless, equity and cryptocurrency markets have surged higher, with the crypto sector up 3.8 percent over the past 24 hours.

Flow (FLOW) is a cryptocurrency that has quietly climbed into the top 30 in terms of market capitalization, despite the fact that its name isn’t widely known. This crypto project linked to non-fungible tokens (NFTs) has increased by 13.3% over the past 24 hours.

In terms of performance over the previous seven days, this cryptocurrency’s gains were quite significant; they increased by 50% during this period.

The main driving force behind Flow’s rise is the news that Meta’s blockchain technology and Dapper Wallet product will be extensively used in the company’s move into the NFT market. Instagram’s photo-sharing program will now accept NFTs, giving this project, which was designed from the ground up to revolutionize the NFT industry, a significant boost.

So what

It’s clear that Meta’s senior management is impressed by the blockchain technology behind Flow, as the company has chosen to use it on its wide-reaching NFT rollout. According to reports, this global non-fungible token distribution will allow individuals from all over the world to create and issue their non-fungible tokens on the Flow network.

Dapper Labs, the firm behind the Flow blockchain, is well-known for its collection of top NFT initiatives. Whether it’s CryptoKitties, NBA Top Shot, or UFC Strike, NFT investors have long been on the lookout for Dapper’s collectibles, given this project’s first-mover status in many sports-related collectible NFTs. Given its position in what could be a huge market over the long term, Instagram appears to be collaborating with Flow.

Now what

The success of Instagram’s foray into the world of NFTs will be determined over time. But the confidence that Flow investors have expressed by this connection is encouraging. From a technological standpoint, there’s a lot to be pleased about with this partnership.

From here, investors should keep an eye on NFT transaction levels on Flow’s blockchain as well as user growth and adoption over time. Flow is presently one token with a lot of momentum. If this broad-based rally persists, this is one project with outsized potential, at least in the near term.

Author: Scott Dowdy

Dividend stocks will not help investors grow rich fast. However, because only the finest businesses are able to increase their payouts to shareholders over time, dividend equities are an investment vehicle with a good chance of assisting investors in building generational wealth.

Here are two real estate investment trusts that seem to be good buys for investors looking to create long-term prosperity.

1. Iron Mountain

Iron Mountain, with 1,460 facilities in 89 countries possessing 740 million cubic feet of worldwide physical storage capacity, is a major records management and storage firm. The firm is so entrenched in its field that it is trusted by 95% of Fortune 1000 companies.

In 2020, the company will continue to consolidate its records management and storage operations in order to protect against adverse changes in real estate or economic cycles. Iron Mountain’s revenue was $4.5 billion in 2021, with over 60% coming from its core business of records management and storage.

Iron Mountain’s main business is highly dependable, with records typically remaining within its facilities for 15 years. Because companies are required to save certain papers permanently, such as business licenses and permissions, as well as types of intellectual property granted by the federal government, such as patents, trademarks, and copyrights, this is why Iron Mountain’s client retention rate is exceptionally high at 98%.

Iron Mountain currently has 1,300 of its total 225,000 customers using data centers for digitalized records storage. This is a huge growth opportunity for Iron Mountain’s data centers division. And the company’s main business, as well as the data center sector’s potential, are why it predicts AFFO per share growth of 8% to $3.76 in 2022.

Best of all, this stock can be purchased for a forward price-to-AFFO-per-share ratio of 12.9, which is reasonable given its excellence.

2. Crown Castle International

Many individuals are reading this article on their cellphones, and it’s a safe bet that most of them are. In fact, mobile devices accounted for half of all web traffic in the United States — 51.4 percent to be precise – in the second quarter of 2022.

Crown Castle International (CCI 0.03%) has ownership of around 115,000 small cell nodes,  40,000 cell towers, and over 80,000 route miles of fiber in the United States. The communications infrastructure is leased by major telecom companies to transmit signals to consumers, which is how smartphone data is generated and consumed.

It’s difficult to see how the United States could become less reliant on cellphones in the future. According to popular opinion, this will be the case. This is why it’s expected that by 2027, monthly mobile data usage in the United States will grow at a compound annual growth rate of 19.8 percent to 54.2 gigabytes per month

Based on this optimistic industry forecast, Crown Castle is confident that it will be able to meet its 7% to 8% annual dividend growth objective for the long term. When combined with a 3.3% dividend yield, the stock looks like a great income and development choice.

Author: Blake Ambrose

Buffett has a remarkable ability to spot high-yielding equities. Between 1965 and 2020, Berkshire Hathaway, the holding company Buffett runs, produced a compound annual return of 20%. That’s almost double the S&P 500’s 10.2% annual growth rate over the same period.

Fortunately for investors, Buffett is a fan of sharing his methods with the public. In early 2008, he described four characteristics that he and Charlie Munger, Berkshire’s other leader, use to assess investable firms.

The following sections offer a deeper look at those four traits and how you might use them in your own investing.

1. A business we understand

Buffett has emphasized the importance of investing within your area of expertise for a long time. The following are some reasons why you should invest in a firm where you have basic knowledge:

  1. You have a deeper appreciation of the firm’s assets and liabilities.
  2. You’ll be able to make better, faster judgments and decisions if you have new information.
  3. You are more invested in the situation. Your position isn’t simply a possibility that you hope will be successful; it’s a company you like to watch.

2. Favorable long-term economics

The favorable future economics boil down to excellent return on investment today, as well as a substantial competitive edge to safeguard those gains over time. The advantage may be the industry’s most cost-effective structure or a brand that is adored by people around the world.

Whatever the benefit, it must be sustainable. A lasting competitive advantage that is easy to copy or reverse fails the test.

This is one of the reasons why Buffett prefers industries that are more stable. Change, whether it’s in legislation, demand, or technology, may erode competitive advantages in ways that are difficult to anticipate.

3. Able and trustworthy management

Individual investors are hard-pressed to assess the trustworthiness of corporate leaders in the absence of a scandal. However, you may assess a leadership team’s capacity, and often its success and culture, by looking at the company’s performance and culture. You should consider:

  • Has there been a clear and consistent strategy for expanding the company?
  • Have they met the organization’s stated strategic objectives?
  • What has the company’s track record in recessions been?
  • How does the leadership team maintain and improve the company’s competitive edge?
  • How has leadership coped with the company’s flaws?
  • What do the workers think of their bosses?

4. Sensible price tag

Buffett is a value investor, as he invests in high-quality firms when the price is less than the firm’s underlying worth.

Buffett increased his stake in Apple by buying 3.7 million shares of the company shortly before it fell during the first quarter of 2022, as tech stock prices were declining. Berkshire Hathaway’s portfolio was already dominated by the iPhone manufacturer.

Berkshire Hathaway’s cash on hand was already $144 billion before the tech sell-off. So Warren Buffett could have purchased more Apple stock last year if he wanted to, but he did not.

Buffett’s profit margins are an intriguing example of his refusal to be deterred by market volatility.

Author: Blake Ambrose

The decisions you make as an investor might influence whether or not you reach your financial objectives, such as sending your children to college or retiring comfortably in your at an early age. One of the most important choices you’ll have to make is whether or not to add dividend stocks to your portfolio.

Many investors choose dividend-paying stocks for the same reason they like the idea of getting regular money. However, dividend equities aren’t necessarily the ideal investment for you. Here are a few advantages and disadvantages of concentrating on dividends.

Benefit No. 1: You have a double opportunity to make money.

The goal of an investor is to generate money, and dividend stocks have the potential to assist you in doing so in two ways. Like all equities, dividend stocks may appreciate in value over time, so if you acquire shares at $200 each, they might be worth $800 in the future.

Meanwhile, dividends-paying firms frequently decide to boost payouts over time. As a result, you could receive dividends that increase dramatically throughout the years.

Benefit No. 2: You get cash to reinvest

Investing money isn’t always simple, especially when living expenses continue to consume your earnings. The benefit of owning dividend stocks is that you will get regular payments that you can reinvest to grow your portfolio even more.

Drawback No. 1: You might end up with a higher tax burden

The majority of your dividends as an investor will most likely be qualified dividends, which means they’ll be taxed at a lower rate than your ordinary income. However, if you have dividend-paying equities in a regular brokerage account rather than an IRA or 401(k) plan, those dividend payouts will increase your tax burden.

It’s worth mentioning that reinvesting your dividends will not get you out of paying taxes. Even if you don’t take the money and run, those payments will be considered income.

Drawback No. 2: Your stocks may not grow as much as you’d like

Companies that pay dividends choose to share part of their profits with their stockholders. At first glance, paying a dividend may appear to be a good idea, but any money paid out as a dividend isn’t being reinvested in the company. As a result, you may discover that the dividend stocks you own in your portfolio don’t appreciate at the same rate as non-dividend-paying stocks.

Are dividend stocks right for you?

Clearly, there are advantages and drawbacks to investing in dividend stocks. Consider your personal circumstances and objectives when making this decision.

Finally, keep in mind that it’s not a good idea to purchase shares of a firm just because it pays an attractive dividend. Instead, place your money in firms you believe in. It makes no sense to buy stock in a company you consider to be awful simply because there is a generous payout available.

Author: Steven Sinclaire

Many Americans are preparing for a recession, as worries about one persist. The United States economy shrank for a second time in the third quarter, which is known as a “technical recession.” However, we don’t yet qualify for that status.

Until the National Bureau of Economic Research (NBER) economists reach a conclusion, this isn’t an official recession. That doesn’t imply that investors aren’t concerned. If we’re moving into a recession, there are a few things you can do to protect your money.

1. Try not to panic

This is often more difficult said than done, but if the nation experiences a recession, don’t be too concerned. Economic downturns can be disheartening and frightening; however, worry can sometimes cause you to make less-than-optimal financial decisions.

Instead, concentrate on the things you can influence, and maintain a long-term perspective. In the past, we’ve been through numerous market crashes and recessions, yet we’ve always recovered. It’s inevitable that the economy will rebound eventually, no matter what happens.

The best thing you can do, then, is to concentrate on the future and avoid making panic-driven decisions. In the words of investing guru John Bogle, “Time is your friend. Impulse is your enemy.”


2. Double-check your emergency fund

A substantial financial cushion is necessary when the economy is unstable. Recessions and stock market panics frequently occur together, and job losses are particularly prevalent during difficult economic conditions.

If you lose your job or have an unanticipated expense, withdrawing funds from the stock market might be a hazardous move. You may end up selling your assets at a significant discount if stock prices are lower, guaranteeing further losses. When you have three to six months’ worth of money in an emergency fund tucked away, you can leave your investments alone and sleep better knowing that your finances are secure.

3. Keep investing, if you can

Investing in the stock market may sometimes seem like throwing your money away during a downturn. After all, if your portfolio is rapidly depreciating, it may not be worth investing even more.

That said, downturns may be one of the greatest opportunities to invest heavily because stock prices are discounting. The lower stock prices go, the more affordable those investments become. If you keep investing when the market is down, you can get high-quality equities for a fraction of their original cost.

Finally, when the market eventually rebounds, you may see significant profits. If you want to amass as much money as possible in the shortest amount of time, putting your funds to work during market dips is one of the greatest methods. As billionaire investor Warren Buffett noted, “Opportunities are few and far between. When it rains gold, don’t put out the thimble; instead, fill up the bucket.”

It’s uncertain whether or not the United States is on track for a recession, but you can prepare regardless. You may sleep better and protect your money even if the future appears bleak by following these three measures.

Author: Blake Ambrose

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