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Is The 60/40 Portfolio Mix Still In Vogue?

The 60/40 portfolio came about to generate growth and income through equity, to use bonds for income and to dampen the volatility of stocks. As the stock and bond markets see declines, has the 60/40 allocation outlived its usefulness? Portfolio diversification should still mitigate risk and capture returns. The classic 60/40 portfolio, consisting of 60% […] The 60/40 portfolio came about to generate growth and income through equity, to use bonds for income and to dampen the volatility of stocks. As the stock and bond markets see declines, has the 60/40 allocation outlived its usefulness? Portfolio diversification should still mitigate risk and capture returns. The classic 60/40 portfolio, consisting of 60% stocks and 40% bonds, has served investors well over the years. A very basic 60/40 allocation, which includes international securities, might consist of the SPDR Portfolio MSCI Global Stock Market ETF (NYSEARCA:SPGM) combined with the Vanguard Total International Bond ETF (NYSEARCA:BNDX). .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2022 hedge fund letters, conferences and more   Find A Qualified Financial Advisor Finding a qualified financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you're ready to be matched with local advisors that can help you achieve your financial goals, get started now. While it’s not nearly as efficient and doesn’t offer true global diversification, plenty of U.S. investors achieve a 60/40 mix using the SPDR S&P 500 ETF (NYSEARCA:SPY) and the iShares Core US Aggregate Bond ETF AGG (NYSEARCA:AGG), which hold domestic stocks and bonds, respectively. Broad Diversification Performed Better The chart shows a broadly diversified 60/40 portfolio, represented by the DFA Global Allocation 60/40 Portfolio (DGSIX) compared to SPY in 2022. You can see how the diversified portfolio has outperformed U.S. large caps. A 60/40 portfolio generates growth and income on the equity side and uses bonds for income and to dampen the volatility of stocks. The latter function, in particular, helps preserve capital. As stock and bond markets see declines, has the 60/40 allocation outlived its usefulness? Depending on the specifics of the allocation, some 60/40 portfolios were down 20% at one point in 2022. As stocks and bonds both regained some ground in November and December, that decline now ranges between 11% and 12%. Investments don’t go up every year, and to believe so would be unrealistic and disappointing. Still Viable in Today’s Market? Many investors and financial advisors question whether that particular mix remains viable. Portfolio diversification is still necessary to mitigate risk and capture returns from multiple equity and fixed-income asset classes. For pre-retirees, the 60/40 allocation often makes sense, but investors must consider their risk tolerance, time horizon and income needs. It’s not sufficient to say a portfolio’s goal should be "making as much money as possible." One deterrent to the traditional asset mix is the current low-interest rate environment, which makes bonds less attractive, particularly when compared to yields from less than a decade ago. In some cases, that could mean that bond substitutes such as annuities may be an appropriate mix as long as you understand the products you purchase. Other Ways to Get Yield Other vehicles for yield include liquid real estate investment trusts, such as the Schwab U.S. REIT ETF (NYSEARCA: SCHH). REITs, by law, pass income through to shareholders. Master limited partnerships, which are frequently found in the oil and gas industry, also offer reliable income. For example, the Alerian MLP ETF (NYSEARCA: AMLP) is the largest MLP ETF, and like REITs or individual MLPs, provides a dividend. On the equity side, investors can allocate into small caps and international stocks to include broad diversification beyond just the familiar large names tracked by the S&P 500. The percentage of domestic small caps could be rebalanced up or down, depending on market conditions. Whatever actual assets you choose, the allocation of equities to fixed income can be adjusted to match your personal goals. The 60/40 is not the only option, although it has become a baseline because it tilts toward equities and still tracks a significant percentage of fixed-income assets. Allocations in Addition to 60/40 A younger investor, or one with a reliable income from other sources, such as a pension or annuities, could tilt more toward equities, with a 70/30 stock-to-bond ratio. A more conservative investor who needs income and capital preservation more than growth could choose a 30/70 bond-to-stock portfolio. Investors with a longer time horizon and who can handle more risk should remain skewed toward equities. It often seems counterintuitive, but when markets are in a downtrend, it’s a good time to implement a “buy low, sell high” strategy. You can do that by purchasing stocks trading at lower valuations. It’s also crucial to avoid panic selling, which locks in losses and means you may have an even tougher hill to climb when attempting to get back to an even portfolio. Should you invest $1,000 in SPDR Portfolio MSCI Global Stock Market ETF right now? Before you consider SPDR Portfolio MSCI Global Stock Market ETF, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and SPDR Portfolio MSCI Global Stock Market ETF wasn't on the list. While SPDR Portfolio MSCI Global Stock Market ETF currently has a "N/A" rating among analysts, top-rated analysts believe these five stocks are better buys. Article by Kate Stalter, MarketBeat.....»»

Category: blogSource: valuewalkNov 23rd, 2022

Winning Dividend ETFs to Start 2023

Dividend stocks have been beating the market for quite some months and may win in 2023 too. Dividend stocks have been beating the market for quite some months. The year 2022 as a whole could easily be attributed to the Russia-Ukraine war, red-hot inflation and rising-rate worries. While inflation started showing signs of cooling and the pace of central banks’ rate hikes slowed, the investing landscape for early 2023 has not changed much.Dividend investing was in vogue last year amid huge volatility and uncertainty. This was especially true as dividend stocks and ETFs are major sources of consistent income for investors in any type of market though they do not offer dramatic price appreciation. These stocks tend to outperform in volatile markets and can reduce the volatility of a portfolio.Dividend ETFs have seen more than $50 billion in inflows this year, according to GraniteShares, making it one of the most reliable and best-performing fund categories in 2022, as quoted on CNBC. Against this backdrop, below we highlight a few dividend ETFs that are rising fast in prices to start 2023.High-dividend ETFs have been gaining more than dividend aristocrats. Since rising rates have been prevalent, investors are interested in equities that have the potential to offer capital appreciation as well as benchmark-beating yields. After all, dividends are one of the ways to ride out the turbulent times (read: 5 Cheap Dividend ETFs to Buy and Hold for 2023).ETFs in FocusInvesco KBW High Dividend Yield Financial ETF KBWD – Up 10.5% YTD; Yields 6.69%The underlying KBW Nasdaq Financial Sector Dividend Yield Index is a dividend-yield-weighted index seeking to reflect the performance of approximately 24 to 40 publicly listed financial companies engaged in the business of providing financial services and products, including banking, insurance and diversified financial services, in the United States. The fund has a Zacks Rank #2 (Buy).Invesco S&P SmallCap High Dividend Low Volatility ETF XSHD – Up 9.63% YTD; Yields 6.60%The underlying S&P SmallCap 600 Low Volatility High Dividend Index comprises 60 securities in the S&P SmallCap 600 Index that have historically provided high dividend yields with lower volatility over the past 12 months. The fund charges 30 bps in fees.Invesco KBW Premium Yield Equity REIT ETF KBWY -- Up 9.34% YTD; Yields 6.79%The underlying KBW Nasdaq Premium Yield Equity REIT Index is a dividend-weighted index seeking to reflect the performance of approximately 24 to 40 small- and mid-cap equity REITs in the United States. The fund charges 35 bps in fees.First Trust STOXX European Select Dividend Index Fund FDD – Up 8.71% YTD; Yields 5.62%The underlying STOXX Europe Select Dividend 30 Index consists of 30 high-dividend-yielding securities selected from the STOXX Europe 600 Index. The fund charges 58 bps in fees.WBI Power Factor High Dividend ETF WBIY – Up 8.10% YTD; Yields 4.08%The underlying Solactive Power Factor High Dividend Index tracks the performance of 50 U.S.-listed stocks among large, mid and small-caps, which exhibit high dividend yield and strong fundamentals. The fund charges 70 bps in fees. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Invesco KBW Premium Yield Equity REIT ETF (KBWY): ETF Research Reports Invesco KBW High Dividend Yield Financial ETF (KBWD): ETF Research Reports Invesco S&P SmallCap High Dividend Low Volatility ETF (XSHD): ETF Research Reports First Trust STOXX European Select Dividend ETF (FDD): ETF Research Reports WBI Power Factor High Dividend ETF (WBIY): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksJan 17th, 2023

"For The Record"

"For The Record" By Peter Tchir, chief strategist at Academy Securities Since it is the start of the year, it seems like as good of a time as any to put a few things on record before diving into the meat of this T-Report. There are things that I want to refer back to over the course of the year because they relate to the business of strategy. For the Record #1 Everyone hates strategists who claim to have called every move correctly. I can guarantee you that if someone called every move right in the markets, they wouldn’t be sitting in front of a computer typing missives because they’d be bazillionaires! A close second for the most annoying behavior by strategists is touting their good calls and completely ignoring their bad calls (Bitcoin is back to $21,000 this weekend). Some of this is human nature. We all “want” to be right and all tend to emphasize the “good” rather than the “bad”. For the Record #2 Many of our readers have P&Ls. That is a discipline like no other and while I try to think of our strategies in terms of P&L generation, risk management, etc., it isn’t the same as having an actual P&L. Having said that, we have people who live and die by daily/weekly/monthly P&Ls (which is ideal for Bloomberg IB as a form of communication). We also have people with weekly/monthly/quarterly timeframes (the T-Report is geared for these people). Finally, we have some who even think in years (which seems important for corporate strategy, but it is difficult to manage a portfolio around). For the Record #3 One thing that strategists dislike is when people discuss their “idea” with them but don’t realize that it was the strategist’s “idea”! That is largely a failing on the strategist’s part. Either the work isn’t getting distributed well enough (a good time to check mailing lists, ensure things aren’t going to junk, etc.), the work/titles are too confusing (though I’m not sure I could live without writing I Like Big Banks and I Can Not Lie), or I just need to write more clearly. Last weekend’s A Simple View is part of the process of addressing this issue going forward. 8 Seconds served the function of letting people know that our positioning had changed, but maybe the title was confusing (though the image of trying to ride a wild bull felt “informative” to me). Finally, while the Fed is apolitical, I couldn’t help but send out the Shifting Politics of Inflation on Friday, because that has the potential to shift the national narrative and could either influence the Fed or (at least in the case of the WSJ) might be the conduit the Fed is using to signal a change. On the Record We will “subtly” shift from “for the record” to “on the record”. Rachel Washburn hosted a fun and interesting webinar on Friday that started with World War III possibilities but ended in a better place. Generals (ret.) Walsh and Marks were spot on, and I was able to add a few points on how their geopolitical input is impacting our macro market and economic outlooks (replay will be available shortly). Academy was one of three firms that participated in Friday’s half-hour Real Yield show on Bloomberg TV. You know a show covers a lot of fixed income ground when CLO ETFs get mentioned and it seemed to be a fluid part of the conversation (rather than forced). Some really interesting views and ideas from the other guests made this a great show to watch if you have about 20 minutes or so this long weekend. On the Road My favorite part of my job has kicked off in earnest! From D.C. and Princeton last week, to San Francisco, Palo Alto, Newport Beach, and San Diego this week, seeing clients is back in vogue. There is nothing more fun than sitting with people in a variety of jobs/industries and sharing ideas. I’m even excited for Minneapolis in early Feb (it will be cold, but should be fun) and look forward to another opportunity to speak to a group of municipal issuers in Alabama! Travel and seeing such a diverse group of people allows me to learn about so many aspects of the economy and it makes my job so much easier! Consensus is Neutral Back to the meat of the report. If I’ve done a good job explaining myself this year, you should know that I’m basically neutral on stocks, bonds, and credit here. That view seems to be rather consensus. The CNN Fear & Greed Index has bumped up to 63 (which is technically in greed territory, but just above neutral). The AAII Sentiment Survey is in neutral territory (though very close to being too pessimistic). What was most interesting is that the number of bears has dropped from 52.3% to 39.9% since December 21st, but almost all of those people piled into the “neutral” camp as the number of bulls remained quite low. I’m not big on technical charts, but this chart sticks out so much that I couldn’t help but use it to illustrate my “neutral” point (I’m not opposed to charts, but they just aren’t my first choice of things to highlight). The S&P has snuggled right up against the 200 day moving average. From my limited understanding of charts, this is a crucial level. The S&P has failed to breach the 200 DMA since the sell-off took hold in late March. It could easily be rejected again. On the other hand, if it breaks through, we could see buyers emerge. Not only from all of those positioned as “neutral”, but from bears and particularly CTAs which have a reputation for being formulaic/algorithmic and tied to big levels (like the 200 DMA). So maybe I should refine my view from simply “neutral” to “neutral, waiting to pounce on the next move – if only I knew what that next move would be”. Even though at the start of today’s report we wrote about providing more “clarity” on views, I’d lean towards owning some tail risk in either direction! If we fail around here, many could press shorts and get out of recently acquired risk. If we break above, the opposite happens. Yes, at some level this happens all the time, but the “neutral” positioning coupled with a major, very visible level (which happens to coincide with the big round number of 4,000) makes the next few days particularly interesting for me! What’s Next for Inflation? I think that inflation will continue to fall and we will see more monthly CPI prints that are negative and even Core CPI will have a negative print this quarter. Many disagree, but I think that with Q4 coming in at 0.8% (3.2% simply annualized) we’ve “beaten” inflation. What Will the Fed Do? I’d be shocked if they did more than 25 bps at their next meeting. Yes, they will talk about “financial conditions” (aka the S&P 500), but they are starting to get the political and media aircover to back down from 50 bps and some of their higher terminal rate calls. There are still over 2 weeks until their meeting and we will get more data. I’m betting that if anything, that data steers them to “25 bps and done” messaging (probably too late for them to do zero, which is what I think that they should do). The Fed will NOT be quick to cut. They should stop hiking, but even I’m not advocating for cuts (it would have been easier if they started on the glide path to stopping rate hikes a few meetings ago). They will continue to do QT. This, to me, acts as an anchor on markets as every month we need to absorb more bonds from the system than if QE had not started in the first place. Why QT gets so little attention still baffles me. The Bank of Japan is expected to let the 10-year yield rise to as much as 1%. I view this as “on par” with QT. It is another drag on asset prices in the U.S. as Japanese investors can allow some of their FX hedged/dollar denominated bonds to roll-off when the hedges come due and just buy domestic bonds. It isn’t alarming and won’t be all at once, but it adds to the pressures of finding dollar denominated asset buyers. With the 10-year bund at 2.16% this is already happening in Europe, but it also tells me that 1% is probably getting to the low end of the range that the JGB 10-year would naturally trade at given their domestic savings rate and still low levels of inflation. What Will the Economy Do? Yes, jobs still seem good, but that isn’t as important as it should be. What I’m seeing is a couple industries acting as the epicenter of the problems for the economy! Big tech, fueled by everyone (from private equity, to vehicle manufacturers) took 5 steps forward in the past few years! Will we see one or two steps back as companies become more cost conscious and not every tech investment will be cheered by equity holders. Have manufacturers changed what chips they rely on as they’ve battled supply chains? Without a doubt, in 5 years technology will play an even bigger role in society and the economy, but it doesn’t mean that we haven’t already priced too much in. I see a potential problem in this market that it is radiating out. The local economies are incredibly interconnected. The homebuilder ETF (XHB) is up almost 20% in the past 3 months! This is a contrarian play that I probably should have gotten on board with, but this is an industry still in the early stages of digesting the spike in mortgage rates and overall loss of wealth in this country. I’m keeping an eye on this. We will get some clarity and resolution on the inventory side of the equation in the coming weeks as we get the regular data and we also have companies discussing it in detail. I’m not optimistic, but maybe this will be a pleasant surprise. Services could be the key. Was the print that we highlighted last weekend an anomaly or a harbinger of more bad news? Even as a bear on the economy, that data seemed surprisingly weak, so I expect something not quite so bad, but “less good” than most bulls are building into their forecast. What About Earnings? I will start by quoting my friend Peter Boockvar. He “guarantees” every quarter that about 70-75% of companies will beat earnings. His point, as I take it, is that expectations get pushed down to the point that most companies beat them, so there is little to be gleaned from the parade of “beats” that we will get. We will all be listening to how CEOs portray their vision for the rest of the year. Their views will mean a lot, but they usually do. My gut is that they will be more cautious than expectations, in part because some of the “wiggle” room that they had late last year has already been used. Also, they are in jobs where they want to outperform expectations, and even if your company is doing well, you might be cautious because you see companies around you going through tougher times. The one thing I “know” for certain is that we will get a lot of chatter about stock repurchases post earnings announcements and unless something changes, that will help support equities. It’s a Moving Picture, not a Snapshot The biggest mistake people may be making is looking at the data as though it is static. If we take a snapshot of recent data, it is easy to craft a “soft” landing narrative. But we don’t live in a static world. Decisions made months ago (on the policy side, on the household side, on the corporate side, etc.) take time to play out. It would be fun if economists could drive the economy like a jet ski, but it is a huge tanker, and once underway it is difficult to turn or even change speed. So, I 100% agree that the current data has a “soft” landing feel, but I don’t believe there is a chance that the weakening of economic data (alongside lower inflation) will stop here! We had to be setting up to “catch” the fall here, and if anything, we are still pushing on this well past the point we should be. Maybe I’m wrong here, but simple Newtonian physics tells us that an object, once set in motion, will stay in motion and that is what the Fed has done and we are going to blow right through the “soft” landing station and enter into some unsafe territory. Bottom Line Stocks Neutral. Own options that cost very little, but generate profits if the S&P 500 breaks 4,100 or 3,900 by the end of next week (yes, resolution will be rapid and I hope that I don’t miss it between now and when futures open, let alone in the actual market). “Gun to head” I’d bet that the rally continues and we test 4,200 on the S&P 500 which means I’ve got to get back on that bucking bronco (or I got off too early). We will break 2022’s lows, but that isn’t my gut for the next move. Rates The 10-year at 3.5% isn’t particularly appealing. We should see corporate issuance spike after earnings announcements. 3.5% is quite inverted versus the front end with a Fed that will hike at least 25 bps more. The BOJ won’t help things. Positioning has become a bit bullish on bonds (at least from the chatter I hear). So, even in my deflationary view, I would not be long 10s here. I like 5-years better than other points. It is “only” 3.6%, so not much of a pick-up, but I like the risk/reward better in 5s. Maybe, the 2-year is more obvious, but it has so little duration and if I’m right and the Fed won’t hike (but also won’t cut), then there isn’t a lot of room. For now, I’d be short Treasuries/sovereign debt. Yes, I think that deflation will be the discussion point of this quarter, but for now, I just don’t see much value in sovereign debt. Credit A “weird” barbell. I’m most concerned about leveraged loans (more so than high yield, because of the type of issuer that tapped that market, versus the bond market), but I like “senior” tranches of CLOs (anything IG rated and even BB). It is difficult to go lower in the cap structure of CLOs given the fact that the building blocks are my least favorite part of the credit market. Prices of various CLO tranches have bounced nicely in the past couple of months and new deals could accumulate some good collateral at really interesting levels. I’m “meh” on high yield and even investment grade. High yield is so hated but while it is interesting, the combination of rate risk and credit risk isn’t a screaming buy to me (though certainly more of a buy than leveraged loans). Investment grade is ok, but I think if Treasury yields rise, spreads will contract by 25% or so of the move in Treasuries, so I expect higher overall yields and lower dollar prices. If sovereign yields drop, spreads will widen on at least a 50% basis (if not closer to 100%). So, in a falling yield environment, IG yields won’t change much and dollar prices won’t do a lot (kind of a difficult risk/reward to pitch). So, I am equal weight IG and underweight sovereign debt. I am underweight leveraged loans and would use those funds to buy CLO tranches or some high yield bonds instead. That’s what I’ve got for now. Will be an interesting week or two and it is difficult being so bearish on the economy, but neutral (and maybe “gun to the head” bullish) on risk in the very short-term. Tyler Durden Sun, 01/15/2023 - 14:30.....»»

Category: blogSource: zerohedgeJan 15th, 2023

5 Reasons Why Gold Is Green

5 Reasons Why Gold Is Green Authored by Ronni Soeferle via GoldSwitzerland.com, Introduction by Matthew Piepenburg In this refreshingly fact-focused report, Matterhorn Asset Management (MAM) advisor, Ronni Stoeferle, takes a deeper look at the false “eco war” on gold. In a world of ever-growing public narratives completely at odds with transparent reality (from “Putin’s” war to “Transitory Inflation”), it should come as no surprise that the current ESG and “Green Revolution Army” of the woke West has turned its political gun sights toward the one precious metal which serves as the greatest threat to a dying fiat currency system: Gold. With puffed chests and lofty claims, global environmental leadership has conveniently made a disingenuous but full-frontal assault on gold mining (and hence gold) as an environmental threat. How convenient… Fortunately, Ronni’s analysis of gold’s use/consumption data, CO2 characteristics and environmental comparisons to conventional fiat currencies provides a far more fact-based (rather than politically-charged) context to this otherwise bogus war on history’s most precious of metals. 5 Reasons Why Gold Is Green In the gold industry, too, ESG is now on everyone’s lips. Behind the letter abbreviation ESG lies the endeavor to motivate companies to actively pursue ecological, social and good governance targets. ESG ratings offer investors and NGOs the opportunity to track progress in this effort and identify the best companies in the industry. However, it is wrong to limit the concept of sustainability only to these ESG ratings. After all, the ratings only evaluate the mining companies, but not the precious metals themselves. Gold suffers particularly from this limited view of sustainability. For example, gold mining is usually reported in a negative context. Inhumane working conditions in some gold mines in Africa or the environmental threat posed by cyanide contamination are the focus of this reporting. The detection of such misconduct is undoubtedly justified and important. However, the fact that such news completely discourages environmentally conscious or socially committed investors from investing in the yellow metal is an exaggerated reaction. It may sound surprising at first glance: Environmentally conscious investors should focus on gold as an investment instrument. Gold is green because gold is used and not consumed CO2 emissions only occur in the relatively insignificant mining of new gold gold is versatile in its use many other raw materials perform significantly worse ecologically fiat money also has a poor environmental record. 1. Gold is used and not consumed In the public debate, truncated representations are currently very much in vogue. Electric cars are considered climate-friendly because, unlike cars with internal combustion engines, their operation does not cause any emissions. Any additional emissions and environmental impact caused by electricity production and the manufacture and scrapping of the car are not taken into account. In this context, however, only the overall view over the entire life cycle should be relevant for an ecological assessment. And in this view, gold is indeed the most sustainable metal in the world because of its elementary properties, the extraction process and its stable value. Gold has been mined for more than 7,000 years. During this period, more than 205,000 tons have been produced, which is equivalent to the size of about 3.5 Olympic swimming pools. More than half of this has been mined since the 1950s. Crucial to gold’s sustainability and environmental footprint is that virtually all of the gold ever mined is still in use. With every gold jewelry, every gold coin, every gold bar, there is some chance that some of it has been used for many centuries, perhaps even millennia. Unlike consumer goods such as food, commodities, but also real estate, gold is not consumed, but merely used. Therefore, new gold production is hardly significant in an overall view, as the stock-to-flow ratio demonstrates. The current value of around 58 means that the amount of gold already in existence is 58 times the amount of the current annual new production. In other words, the annual “inflation rate”, i.e. the growth of the global gold stock compared to the already mined and further used (!) amount, is low and relatively stable. It fluctuates between 1.2% and a maximum of 2.4%. As a precious metal, gold is characterized by the fact that it does not chemically react with air or its components such as oxygen, carbon dioxide and other gases. This protects gold from losing its luster. Gold therefore remains in its purest form forever. This makes it the perfect investment vehicle that can be passed down from generation to generation. The social and environmental costs of gold mining can consequently be spread over an almost infinitely long period of time, making them converge towards zero. The permanence of gold also means that gold never has to be disposed of as waste. No one will voluntarily throw gold away, but will want to recycle it for profit. 2. Significant CO2 emissions are incurred only during mining The current strong focus on curbing CO2 emissions to combat climate change should also lead to a stronger focus on gold among investors. This is because gold is a decidedly CO2-friendly metal and investment. Three different sources are distinguished in the attribution of CO2 emissions. Scope 1 emissions cover those climate-damaging emissions that are released within the company itself, Scope 2 includes those emissions caused by the company’s energy suppliers, and finally Scope 3covers those thatoccur in the upstream and downstream supply chain. For many products, the good part of the emissions arises in the upstream and downstream supply chains, i.e. Scope 3. However, the Scope 3 emissions of gold mining companies are almost negligible, as a gold bar is very rarely further processed. Furthermore, Scope 1 and Scope 2 CO2 emissions per ounce of gold produced are extremely low for large operations. The comparison with other raw materials makes this clear. The production of aluminum consumes almost 11 times as much CO2 per US dollar of production value, steel more than 5.5 times, coal almost three times and zinc more than two times. Copper is in the region of gold, lead slightly below, while iron ore is much more CO2 -friendly, with around two-thirds fewer emissions. However, gold recycling produces 90% fewer CO2 emissions than gold mining, and about 25% of annual gold demand is met by recycling alone. In addition, gold that has already been mined does not cause any additional emissions, as these are generated exclusively during the mining and refining of the gold. Gold is used and not consumed. Consequently, the possession of physical gold does not produce any emissions. Only the processing of gold into jewelry and the industrial use of gold emits a small amount of additional CO2. Over time, physical gold will therefore continue to reduce the emissions intensity of a portfolio. 3. Gold greens a portfolio Consequently, an increase in the share of gold in an investor’s portfolio significantly reduces the CO2 footprint and the emissions intensity of the overall portfolio. For a portfolio consisting of 70% equities and 30% bonds, a 10% gold allocation reduces emissions intensity by 7%. A 20% gold allocation reduces emissions by 17%, according to calculations by the World Gold Council in its readable study “Gold and climate change – Decarbonizing investment portfolios.” 4. Fiat money harms the climate and the environment Fiat currencies, on the other hand, have a major impact on the environment. There are approximately 1.5 trillion coins in circulation worldwide, with a total weight of an estimated 5.25 million tons, consisting mainly of nickel, copper and steel. Banknotes in circulation in 2018 were around 576 billion. Every year, around 150 billion new banknotes are put into circulation. This corresponds to a stock-to-flow ratio of not even 4. Or put another way, a banknote has a life expectancy of just 4 years. The environmental damage that such enormous quantities of cotton, water, ink, and polymers as well as of metal continually cause is enormous, especially when compared to the 205,000 tons of gold that have been mined to date. This raises the more than legitimate question of whether our current fiat money system can be classified as sustainable – and this in two ways: on the one hand, sustainable in the sense of ecological compatibility, and on the other hand, sustainable in the economic sense. This is because the negligible marginal costs of paper money production encourage an excessive expansion of the money supply, which causes both ecological and economic distortions. 5. Gold is versatile in its use Gold is also very sustainable due to other properties. Its specific gravity and malleability make gold the perfect currency. It can be used to transport a large amount of value in a confined space, or it can be hammered into paper-thin gold leaf that is less than a micron thick.. It was highly prized thousands of years ago and is still the first choice of central banks today. Unlike a paper currency, gold reserves do not need to be replenished to maintain purchasing power, because gold is largely immune to inflation. Conclusion A closer look reveals beyond doubt that, contrary to a multitude of reports and prejudices spread by the media, gold can already be classified as a very sustainable investment in the sense of the ESG guidelines. And the entire industry is making great efforts to eliminate the remaining blemishes. Beyond the importance of gold for investors and the industry, the undeniable benefits of gold should raise the question of whether the current monetary system can be made more sustainable through greater integration of gold should increasingly come into focus; not only for environmental but also for economic sustainability considerations. So anyone turning away from gold is in fact turning away from the world’s most sustainable metal in terms of its CO2 balance sheet, the amount of waste and the amount of resources used. Tyler Durden Sat, 01/14/2023 - 09:20.....»»

Category: smallbizSource: nytJan 14th, 2023

ETFs to Buy for 2023 After S&P 500"s Worst Year Since 2008

The S&P 500 just finished its worst year since 2008. What Lies ahead for 2023? The S&P 500 has dropped 19.4% in 2022. It marked the largest calendar-year decline since a 38% plunge in Lehman Bother’s crisis-laden 2008. Investors have been extremely worried about recession fears now, probably due to the relentless market forecasts. Inflation fears rather took a backseat as the price index has started showing a downtrend.Goldman Sachs, Bank of America and JPMorgan predict a U.S. recession in 2023. Everyone’s pandemic savings are getting depleted. As of October, the savings rate stood at 2.3%, down from a high point of 4.7% earlier this year and 7.3% in 2021, according to Vox, quoted on Yahoo Finance.Along with depletion of trillions of dollars from the world stocks due to high inflation, Russia-Ukraine war, rising rates and China’s zero-Covid policy, the year caused a chaos in the bond and crypto currency market. The bond market went through its worst year in modern history.The Fed has hiked rates several times in 2022. The policymakers also forecast that their key short-term rate will reach a range of 5% to 5.25% by the end of 2023, before being slashed to 4.1% in 2024. This suggests that the Fed is prepared to hike its benchmark rate by additional three-quarters of a point and then stay put till the end of 2023. Not only, the Fed, most other central banks have also been on the rate-hike mode.Analysts now project S&P 500 earnings to expand 2.2% year over year in 2023, down from expectations of 6.5% growth they forecast in the beginning of September, according to Bloomberg Intelligence, quoted on Yahoo Finance. Against this backdrop, below, we highlight a few top-ranked ETFs that may be considered for 2023. SPDR These ETFs have a lower P/E ratio than the S&P 500 ETF Trust SPY (P/E: 21.70X).EnergySPDR S&P Oil & Gas Exploration & Production ETF XOP – Zacks Rank #2 (Buy); P/E: 13.25XEnergy stocks have room to go higher, even after a successful run this year, Tortoise portfolio manager Rob Thummel told Yahoo Finance. Some energy ETFs are still cheap. He also says the biggest driver for energy stocks going forward is the yield they offer investors.In China, more cities are easing COVID-19-related restrictions, prompting expectations of increased demand in the world's top oil importer. Russian oil exports could decline by two million barrels per day by year-end 2023, The Fitch Group said, as quoted on CNBC. This, in turn, may boost oil prices higher.DividendSPDR Portfolio S&P 500 High Dividend ETF SPYD – Zacks Rank #1 (Strong Buy); P/E: 14.38XDividend investing was in vogue in 2022 amid huge volatility and uncertainty. These are major sources of consistent income for investors in any type of market. Inflows to dividend ETFs were 25% higher in 2022 than 2021’s record, per a Bloomberg article. This is especially true as high dividend paying stocks are gaining appeal in a rising rate environment as bond ETFs underperform in a rising rate environment. The fund SPYD yields 4.99% annually (read: 5 Cheap Dividend ETFs to Buy and Hold for 2023).All-Cap ValueGlobal X SuperDividend U.S. ETF DIV – Zacks Rank #2; P/E: 15.36XThe underlying INDXX SuperDividend U.S. Low Volatility Index tracks the performance of 50 equally weighted common stocks, MLPs & REITs that rank among the highest dividend yielding equity securities in the United States. The fund yields 6.62% annually. Notably, value stocks perform better in a rising rate environment than growth stocks.BiotechSPDR S&P Biotech ETF XBI – Zacks Rank #1; P/E: 12.70XWith the pandemic being largely managed, thanks to the rollout of vaccines in record time, the biotech sector’s focus had shifted to new drug approvals, label expansion of existing drugs and acquisitions in 2022. Meanwhile, the legal marijuana market has ballooned lately, resulting in a multibillion-dollar business. But with Omicron’s new variant flexing muscle at the start of the New Year, biotech sector should again come at the front. Plus, the sector’s non-cyclical nature makes it important even amid global growth slowdown.  Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SPDR S&P 500 ETF (SPY): ETF Research Reports SPDR S&P Oil & Gas Exploration & Production ETF (XOP): ETF Research Reports SPDR S&P Biotech ETF (XBI): ETF Research Reports SPDR Portfolio S&P 500 High Dividend ETF (SPYD): ETF Research Reports Global X SuperDividend U.S. ETF (DIV): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksJan 6th, 2023

5 Cheap Dividend ETFs to Buy and Hold for 2023

This has been a terrible year for global markets. Hence, dividend ETFs have remained in vogue and would likely to be stars in 2023 as well. This has been a terrible year for global markets. High inflation, rising rates, geopolitical tensions and supply-chain woes due to the zero-Covid policy in China made matters most difficult this year. The S&P 500 is off 19.8% this year (as of Dec 22, 2022). This marked the index’s biggest decline since the 2008 financial crisis.Vanguard Total International Stock ETF VXUS has lost about 18.8% this year. Vanguard European Stock Index Fund VGK has retreated about 18.7%. iShares MSCI Emerging Markets ETF EEM is off 22.5%Hence, dividend investing is in vogue this year amid huge volatility and uncertainty. This is especially true as these are major sources of consistent income for investors in any type of market though they do not offer dramatic price appreciation. These stocks tend to outperform in volatile markets and can reduce the volatility of a portfolio.Inflows to dividend ETFs are 25% higher this year than 2021’s record with positive inflows every month so far this year, per a Bloomberg article. A record $50 billion allocation to dividend ETFs so far this year has been noticed.  Money managers betting big on stable companies that have a history of paying out profits to shareholders, hoping that will minimize immense losses across the broader market.Though cash-like treasuries are offering highest income in over a decade, dividend-paying stocks are gaining appeal in a rising rate environment as bond ETFs underperform in a rising rate environment. The Federal Reserve raised the fed funds rate by 50 bps to 4.25%-4.5% during its last monetary policy meeting of 2022 to tame inflation, pushing borrowing costs to the highest level since 2007.What Lies Ahead?The Fed’s job is not done yet. The U.S. central bank will likely hike rates next year again to restrict inflationary pressure. The policymakers forecast that their key short-term rate will reach a range of 5% to 5.25% by the end of 2023 (read: Top-Ranked ETFs to Play Fed's Seventh Rate Hike of 2022).Add to this, recessionary fears are rife. Hence, dividend investing, which is safer in nature, would be in bright spot in 2023 as well. But after a huge jump in prices for dividend ETFs in 2022, we would suggest investors to look for some cheap dividend ETFs for investing in 2023.Below we highlight a few such options. These dividend ETFs have a low P/E ratio than the S&P 500 (P/E: 21.70X) and have returned better than the key U.S. equity gauge.ETFs in FocusInvesco S&P 500 High Dividend Low Volatility ETF SPHD – Up 0.6%; P/E 13.85XThe underlying S&P 500 Low Volatility High Dividend Index comprises of 50 securities traded on the S&P 500 Index that historically have provided high dividend yields and low volatility. The fund charges 30 bps in fees and yields 3.89% annually.Invesco High Yield Equity Dividend Achievers ETF PEY – Up 2%; P/E: 14.06XThe underlying NASDAQ US Dividend Achievers 50 Index is comprised of 50 stocks selected principally on the basis of dividend yield and consistent growth in dividends. The fund charges 52 bps in fees and yields 4.24% annually.SPDR Portfolio S&P 500 High Dividend ETF SPYD – Down 1.5%; P/E:14.38XThe underlying S&P 500 High Dividend Index is designed to measure the performance of the top 80 dividend-paying securities listed on the S&P 500 Index, based on dividend yield. The fund charges 7 bps in fees and yields 5.03% annually.Principal Value ETF PY – Down 4.6%; P/E: 11.56XThe 80-stock fund targets growth of income by investing in companies that grow dividends, increase cash flows, and engage in buybacks over time. The fund is driven by companies with strong cash flow generation and prudent payout policies. The fund charges 15 bps in fees and yields 3.08% annually.WisdomTree Japan Hedged SmallCap Equity Fund DXJS – Up 4.5%; P/E: 10.72XThe underlying WisdomTree Japan Hedged SmallCap Equity Index is designed to provide exposure to the small capitalization segment of the Japanese equity markets while at the same time neutralizing exposure to fluctuations of the Japanese Yen movements relative to the U.S. dollar. The fund charges 58 bps in fees and yields 3.14% annually (read: ETFs to Play BoJ's Surprise Policy Shift). Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Invesco High Yield Equity Dividend Achievers ETF (PEY): ETF Research Reports iShares MSCI Emerging Markets ETF (EEM): ETF Research Reports Vanguard FTSE Europe ETF (VGK): ETF Research Reports Invesco S&P 500 High Dividend Low Volatility ETF (SPHD): ETF Research Reports SPDR Portfolio S&P 500 High Dividend ETF (SPYD): ETF Research Reports WisdomTree Japan Hedged SmallCap Equity ETF (DXJS): ETF Research Reports Vanguard Total International Stock ETF (VXUS): ETF Research Reports Principal Value ETF (PY): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksDec 23rd, 2022

3 Telecom Stocks Most Wall Street Analysts are Bullish About

Clearfield (CLFD), Harmonic (HLIT) and A10 Networks (ATEN) are poised to benefit in 2023 and beyond with healthy fundamentals and solid Zacks Rank. The year 2022 witnessed intense market volatility as high inflationary pressures, a challenging macroeconomic environment and fresh COVID-19 restrictions in China disrupted normal business operations and supply-chain mechanisms of various firms. However, telecom firms relentlessly provided the vital lifeline to countless humans with large-scale 5G deployments, as virtual communication replaced in-person exchanges with the work-from-home option coming into vogue. The firms worked in unison to effectively handle the upsurge in data traffic as digital sustainability became the norm of the day.As the curtains roll down on an eventful 2022, the world eagerly awaits a new year that will likely tame inflation and mitigate recessionary fears. The unpredictable market conditions have highlighted the need for stocks with the potential for a healthy return. One of the safest options to capitalize on such unique money-minting opportunities is to adhere to Wall Street recommendations and follow the experts’ advice.Before we try to replicate this model in the Telecom sector to identify three stocks with solid Zacks Rank and robust average broker rating, let us delve a little deep into the current market dynamics.Telecom Sector DynamicsThe fifth generation of cellular technology, or 5G, has accentuated the need for high-speed, high-bandwidth and low-latency connections. 5G has fast-tracked the wide proliferation of video and other bandwidth-intensive applications with a data transmission rate of about 10-100 times faster than the existing 4G networks. Billed as the technology of the future with faster download speed and low latency, 5G is touted as the primary catalyst for next-generation IoT services. These include connected cars, augmented reality, virtual reality platforms, smart cities and connected devices that are likely to revolutionize key industry verticals.As the 5G ecosystem evolves with a fast-track rollout across the globe, it is likely to offer a plethora of opportunities for diverse industries to spearhead innovation and redefine our daily lives. Riding on such growth drivers, various telecommunication firms are poised to benefit in 2023 and beyond. Below is a list of three such stocks in random order.3 Telecom Stocks to Keep an Eye onClearfield, Inc. CLFD: Headquartered in Minneapolis, MN, Clearfield is a leading provider of communication networks, telecom services and support solutions. With a market cap of $1.49 billion, this Zacks Rank #1 (Strong Buy) stock delivered an earnings surprise of 39.7%, on average, in the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.The company is witnessing a strong demand environment, largely driven by an effort by rural broadband operators to establish themselves as dominant broadband access providers. In addition, Clearfield is gaining traction with Tier 2 carriers that aim to extend their fiber connectivity across the country. The stock has gained 30.9% over the past year. It has an average brokerage recommendation (ABR) of 1.33 on a scale of 1 to 5 (Strong Buy to Strong Sell). ABR is the calculated average of actual recommendations made by brokerage firms and portends the future potential of the stock. Earnings estimates for Clearfield for the current year have moved up 59.7% since April 2022.Image Source: Zacks Investment ResearchHarmonic Inc. HLIT: Headquartered in San Jose, CA, Harmonic provides video delivery software, products, system solutions and services worldwide. With more than three decades of experience, it has revolutionized cable access networking via the industry's first virtualized cable access solution, enabling cable operators to more flexibly deploy gigabit Internet service to consumers' homes and mobile devices.Harmonic, carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 55.5%, on average, in the trailing four quarters. With a market cap of $1.41 billion, the stock has gained 15.7% over the past year. It has an ABR of 1.67 on a scale of 1 to 5. Earnings estimates for Harmonic for the current year have moved up 44.4% since April 2022.A10 Networks, Inc. ATEN: Headquartered in San Jose, CA, A10 Networks offers secure application services for on-premises, multi-cloud, and edge-cloud environments at hyperscale. It is benefiting from strong demand for networking solutions among service providers as network security and reliability gain precedence for multi-cloud transformation and 5G readiness. An expanding partner base and portfolio strength are helping it to navigate a challenging macroeconomic environment and supply chain constraints.A10 Networks, carrying a Zacks Rank #2, delivered an earnings surprise of 12.7%, on average, in the trailing four quarters. It has a VGM Score of B. With a market cap of $1.27 billion, the stock has gained 9.2% over the past year. It has an ABR of 2.00 on a scale of 1 to 5. Earnings estimates for A10 Networks for the current year have moved up 7.8% since December 2021. Zacks Top 10 Stocks for 2023 In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2023? From inception in 2012 through November, the Zacks Top 10 Stocks portfolio has tripled the market, gaining an impressive +884.5% versus the S&P 500’s +287.4%. Now our Director of Research is combing through 4,000 companies covered by the Zacks Rank to handpick the best 10 tickers to buy and hold. Don’t miss your chance to get in on these stocks when they’re released on January 3.Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Harmonic Inc. (HLIT): Free Stock Analysis Report A10 Networks, Inc. (ATEN): Free Stock Analysis Report Clearfield, Inc. (CLFD): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksDec 22nd, 2022

A Defensive Manager’s Year In Perspective

As we’re closer than ever to 2023, Jon Gumpel, Investment Manager and Director at Aubrey Capital Management, share his insights via the year in perspective article below. Earlier this year, Jon launched a defensive strategy at Aubrey, known as the SVS Aubrey Citadel Fund. 2022 Year In Perspective Well, 2022 has been quite the year, […] As we’re closer than ever to 2023, Jon Gumpel, Investment Manager and Director at Aubrey Capital Management, share his insights via the year in perspective article below. Earlier this year, Jon launched a defensive strategy at Aubrey, known as the SVS Aubrey Citadel Fund. 2022 Year In Perspective Well, 2022 has been quite the year, hasn’t it? Proving once and for all that things can change swiftly from impossible, to probable, to incoming. .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2022 hedge fund letters, conferences and more   As well as all the other more important, more extraordinary, and more bizarre things that happened this year, it has been the launch of Aubrey’s new defensive strategy that has kept me most busy. March 2022 proved to be an interesting time to take over the Sentinel Navigator Fund mandate. This was followed, in September, with the launch of the Aubrey Citadel Fund, during one of the most extensive market repricing events seen for many years. We managed to ride out volatility amid the repricing of inflation and political risks and I am pleased with the Strategy’s performance so far (see right[1]). We are trying to construct the ideal defensive income growth portfolio and, by harnessing the defensive benefits of selected bonds and alternatives, together with the driving force of a portfolio of Aubrey selected global equities (demonstrating quality, value, and good income & growth prospects in various combinations), we think we are getting there. We also seek to actively manage our exposures to take account of market fluctuations, with both constant small adjustments on the tiller as well as sharper moves if, and when required. I see the point of a defensive manager is to focus on the un-priced risks ahead, and in particular on the key risks that could ruin the journey, while coping with day-to-day changes and flows. We will not always be ahead of the pack or in line with the last quarter. There will be times when our solid qualities may not be in vogue, but we should always be adding value to both your returns and your portfolios on a risk adjusted basis. Furthermore, we aim to compound our income so that the starting yield of 3.4% can rise and help ameliorate the effects of inflation, without taking either the full risk of equity volatility or the inflation risk of simply holding a US Treasury bond. I have been asked quite a lot why my focus is now on defensive income, why we are not in the Targeted Absolute Return sector and why I am at Aubrey. My focus is on defensive income because in a world that has lost its compass on many things, and quite particularly in the investment world, a sustainable growing income is, I believe, the surest way to both maintain valuation discipline and to chart a course through the difficult waters ahead. I do not want my hands tied by anything that hampers the steering. The absolute return sector adds that burden on a manager and, while that was fine in the last 10-15 years of low inflation, it is not appropriate going forward. In an inflationary world, benchmarking to cash simply does not make sense. For the same reason I think that equities, or rather a specific subset of global equities, is going to offer the best hope for enduring defensive income growth returns. That is why Aubrey is such a good home, with the ability to help me create a cost-effective portfolio of global equites to suit the environment. I have known some of the team here for a long time and quite apart from anything else it is a great group of people and a very nice place to work, which is an important thing in itself. I think I may have exceeded the budget of time my readers have allowed, so I will end this note now with best wishes for a happy Christmas and a peaceful new year. [1] Data from FE fundinfo 2022 About the Author Jon Gumpel joined Aubrey Capital Management as Investment Manager and Director in July 2020. Prior to this, Jon had a 28-year career at Brooks Macdonald where he had been one of the founding directors. Throughout that time, he developed innovative and attractive investment management strategies, building the business from scratch until he left in October 2019 when it had 500 employees and £13bn FUM. During his time at Brooks Macdonald, he launched and managed the Defensive Capital Fund and by the time of his departure, had grown that to £700m, winning several awards including the 2019 Lipper Award for the Absolute Return sector......»»

Category: blogSource: valuewalkDec 19th, 2022

I treated my dog to a $75 tasting menu at a new SF restaurant for canines. She loved it, and it was so fun watching her eat from the table.

Kristen Hawley visited Dogue, a restaurant for dogs created by talented chef Rahmi Massarweh. It included three courses of fresh raw-diet cuisines. Kristen Hawley took her dog Heidi to try the $75 tasting menu at the new dog restaurant Dogue.Icarian Photography/Kristen Hawley Kristen Hawley took her 7-year-old dog, Heidi, to Dogue, a new San Francisco retail store for dogs. On Sundays, Dogue opens its Bone Appétit Cafe, which has a $75 tasting menu and surprise treats. Hawley spent $100 at the cafe and enjoyed it, but says it's a splurge for special occasions only. Dogue (rhymes with "vogue") is a new storefront, cafe, and pastry shop for dogs and their owners in San Francisco's Mission District.Dogue’s Valencia Street storefront on a foggy San Francisco Sunday afternoon.Kristen HawleyDogue opened in September 2022 on a stretch of Valencia Street, a heavily trafficked area located in one of the sunniest parts of the city.Valencia street.Kristen HawleyDogue has offered fresh foods to canines online since 2015. After learning about the new brick-and-mortar spot, I decided to take my 20-pound, mini Aussie, Heidi, and my 5-year-old daughter to check it out.Dogue’s business information on a sign next to a bowl of spa water for dogs to enjoy.Kristen HawleyDogue has gotten a lot of attention as a restaurant for dogs, but most days it's a store selling fresh dog food, custom canine meal plans, and decadent dog treats.A selection of treats made for dogs.AFImageIt was started by Rahmi Massarweh, a trained chef who told me he "went down a rabbit hole" learning about animal nutrition in an effort to extend his own dog's life.Chef and owner Rahmi Massarweh behind the counter at Dogue.AFImageDogue sells refrigerated raw dog food. Large 12-ounce-packages include wild venison for $14.50; pastured chicken for $24; and grass-fed beef for $34.The refrigerator display at Dogue.Kristen HawleyDogue sells additional dog supplements for gut, coat, and skin, with prices ranging from $9.95 to $14.95. Its website contains information on how to transition a dog to a raw-food diet.Refrigerated supplements at Dogue.Kristen HawleyThe dog-centric vibe at Dogue matches the city. It even sells stylish dog accessories like bowls, leashes, and collars — perfect for San Franciscans, who claim there are more dogs than children living here.Dogue also sells a curated selection of stylish dog accessories.Kristen HawleySource: SanFrancisco MagazineIn 2016, the city had between 5,000 and 35,000 more dogs than kids under 18. Dogue caters to this crowd by selling merchandise as well as dried treats.A shelf of Dogue merchandise and dried dog treats.Kristen HawleySource: KQEDIt's also become a place for dog owners to celebrate birthdays or other special occasions. Dogue offers dogs and their owners a seated meal at its Bone Appétit Cafe, on Sundays only.The counter at Dogue; check in here for seating or to pay for purchases.Kristen HawleyGuests — four-legged and human — are encouraged to get comfortable on the furniture. There are four small tables for dining, each with plenty of space to prevent any unwanted dog jealousy.A corner banquette ready for canine and human guests.Kristen HawleyWhen I arrived, around 11 a.m., all tables were occupied. We saw a small Frenchie, a large mastiff, a happy goldendoodle, and two excited corgis.Small dining tables offer plenty of space for a meal for a canine or two.Kristen HawleyAfter a 40-minute wait, our table, set with three chairs near the door, became available. The Bone Appétit Cafe is walk-in only. I loved the detailed rugs.A table awaits diners at Dogue with machine washable rugs under each dining area.Kristen HawleyEven the lighting was elegant! Chandeliers hang from the ceiling to create a vibe that's more "full-service restaurant" than "dog food."Dogue's interior.Kristen HawleyWe were presented with the menu in a leather portfolio, just like a typical restaurant. On this Sunday, the rotating menu contained three options, each available à la carte or as part of the full tasting menu.Dogue’s menu for Sunday, October 16.Kristen HawleyMy daughter read Heidi the options, but we were already set on trying the $75 tasting. After we were seated, staff waited for a few minutes before checking our decision.My daughter reads my dog the menu, which stayed on the table for reference.Kristen HawleyThere were also some complimentary human treats included in the experience. We were offered our choice of sparkling water, orange juice, or mimosas served in carafes and tiny crystal goblets.My daughter enjoys water from a small crystal goblet at Dogue.Kristen HawleyThe first course arrived quickly: Chicken and Chaga Mushroom Soup made with whole pasture-bird chicken and simmered with apple-cider vinegar for eight hours. This dish is individually priced at $27.Chicken soup for dogs at Dogue in San Francisco.Kristen HawleyDogue owner, chef Massarweh, poured the broth for Heidi tableside — just as a server at a restaurant might do for a human patron. It's served lukewarm so eager dogs don't burn their mouths.Heidi asks for permission to eat food from the table.Kristen HawleyAt first, Heidi seemed confused about eating the food off of the table. She started by hesitantly licking the broth, looking at me for permission every few licks, but clearly excited.Heidi eyes (and tastes) the first course.Kristen HawleyHer trepidation lasted only seconds as she realized it was all for her. She finished the broth and quickly ate three pieces of cooked chicken breast in one bite each. It took her about 90 seconds to finish the dish.Heidi licks the bowl, fully comfortable in her new role as restaurant diner.Kristen HawleyBy now, Heidi understood that this experience was truly for her. She stood quietly on her chair anticipating what might come next. Other dogs in the space behaved similarly.Most dogs spent their time at Dogue staring toward the kitchen.Kristen HawleyThe tasting menu also comes with some off-menu surprises, much like a human tasting menu. Heidi enjoyed this bite of organic pumpkin served by Massarweh.Massarweh delivers an off-menu treat between courses.Kristen HawleyThe second course arrived shortly after the pumpkin: Chicken Skin Waffle and Charcoal Flan. If purchased alone, it costs $29.The Chicken Skin Waffle menu entry.Kristen HawleyHeidi stood up on two legs to snag the small waffle, made from chicken skin and ground cassava. She ate it in one bite, before I could photograph it and before Massarweh could put it down on the table.My dog was perplexed by the charcoal flan, but devoured the chicken skin waffle.Kristen HawleyHeidi paused after licking the gelatinous flan, briefly confused. She ate the garnish first, but pushed through to finish the entire dish.Heidi eats her second course.Kristen HawleyMaking good on the promise to be the kind of place dog owners love, Massarweh served my daughter and I a take on Caprese salad with burrata and basil.A small dish for humans to share was served in a glass bowl.Kristen HawleyMassarweh worked closely with California's Department of Food and Agriculture to get his business state-inspected and licensed. He said that human restaurants need only two certificates to open, but Dogue needed seven.Heidi enjoying her lunch.Kristen HawleyHeidi was decidedly less well-behaved as Massarweh displayed the final course. She jumped onto the table to get closer, and probably would have jumped onto this plate if she could've. This behavior is totally allowed!Heidi sits quietly, staring toward the kitchen, waiting for the next course.Kristen HawleyMassarweh holds a plate of grass-fed steak tartare made from filet mignon, quail egg, and broccoli sprouts. Purchased à la carte, it costs $32.A dish at Dogue.Kristen HawleyThe steak tartare looked nearly identical to a restaurant dish for humans. Massarweh said he's tried nearly everything on the menu and the tartare is good, but lacks all seasoning human diners expect.Heidi examines some raw filet with quail egg.Kristen HawleyThis dish contained the only ingredient that Heidi didn't appreciate — sprouts. She seemed frustrated as they got stuck in her teeth.Heidi navigates the broccoli sprouts on top of her steak.Kristen HawleySprouts removed, she regained interest in the beef, but seemed to be getting full. Massarweh serves the same portions to every dog who visits the cafe, but Dogue's custom meal plans include serving sizes adjusted to a specific dog's caloric needs.Heidi can’t take her eyes off the steak, even with a full stomach.Kristen HawleyThen came an off-menu dessert made from raw antelope heart. It's one of the few dishes Masserweh hasn't tried. (He tastes for balance before adding the heart.)Masserweh’s wife and business partner, Alejandra, delivers a wild antelope heart dessert.Kristen HawleyMassarweh said besides special days, like birthdays, many people bring elderly animals to enjoy a once-in-a-lifetime, extra-special meal. (Heidi is 7.)Heidi patiently waiting for the next course.Kristen HawleyOur total, after tip, came to $100. "If ingredients of this quality were being served to humans, they would be like four times the price," Massarweh said.A close-up of the fall menu.Kristen HawleyMy dog, and others in the space, were remarkably calm throughout the entire meal. Most owners kept their dogs leashed, but every animal seemed too engaged with the experience to stray.A dog’s-eye-view of Dogue during lunch service.Kristen HawleyMassarweh said the whole point of Dogue is to rethink the way we feed animals. "I think the idea of presenting and plating this food is my vehicle for shining a light on this," he said.Cafe seating at Dogue.Kristen HawleyDogue also offers a variety of beautiful treats crafted to look like pastries ($15 each), but made from ingredients like chicken and antelope. The case was full when we arrived and nearly empty when we left.A pastry case beside the counter displays goodies for sale.Kristen HawleyNo detail was forgotten! The dog theme continues even inside Dogue's bathroom, which is decorated with dog decals and funny signage.The bathroom at Dogue in San Francisco.Kristen HawleyWe enjoyed our visit to Dogue. Heidi left with a full stomach, but had normal energy on our walk home. We didn't notice any changes to her digestion or bathroom habits, either.An energetic Heidi walks home.Kristen HawleyI'd save this splurge for a special event, but I'd go back to Dogue, maybe next time with a group!A portrait of me and Heidi.Icarian PhotographyRead the original article on Business Insider.....»»

Category: worldSource: nytNov 9th, 2022

Apartment conversions jumped 25% over the past two years, meaning that swanky place you"re renting likely used to be an office space, hotel room, or church

More than 77,000 apartments are expected to be created out of old and unused buildings in the coming years as the work-from-home boom becomes permanent. Developers converted 1,565 apartments in Washington, D.C. last year.Brian Keith Lorraine Developers converted more old buildings into rentals than ever before between 2020 and 2021. Developers are targeting a range of building types, from office buildings to churches. Increased work-from-home and hybrid opportunities is driving the trend. Developers are converting old buildings into new apartments at an all-time high rate as work-from-home becomes permanent, according to a new report from RentCafe. In total, developers created 28,000 new apartments out of old and under-utilized buildings between 2020 and 2021, the report said. That represents a 25% increase over the more than 22,300 apartments developers converted between the years of 2018 and 2019, prior to the pandemic. The study analyzed conversions of buildings that include at least 50 apartments and used market data from RentCafe's sister company, Yardi Matrix. "Not all buildings are equally threatened by the work-from-home revolution," Doug Ressler, a business intelligence manager at Yardi Matrix, said in a statement. "Larger office buildings in abandoned central business districts are better suited to conversion than the often-smaller office complexes distributed around the suburbs."These types of conversions — also known as adaptive reuse — became en vogue during the pandemic as interest rates and the price of construction materials increased. Now that the pandemic has entered its third winter, developers are eyeing residential conversions as a way to "resuscitate office buildings" and meet swelling demand for housing, according to the report. Large cities such as Philadelphia, Cleveland, and Pittsburgh have been a hotbed for such conversion projects because they have a lot of old buildings and unused office spaces, the report adds. Altogether, developers converted more than 3,200 apartments in those cities, or 11% of the nationwide total, the report said. Local governments have gotten behind the trend by creating incentives for conversion projects. For example, California Governor Gavin Newsom signed a pair of bills in late September that let developers bypass local regulations to build housing on commercial land under certain circumstances. Chicago city planners also introduced an initiative in September to convert vacant office spaces along LaSalle Street in the central business district into residential units. "The residential market needs significantly more density in the areas of the largest cities, where the demand is greatest and where the tallest office buildings are located," Ressler said. Developers aren't just targeting offices for conversions either as warehouses, hotels, and factories make up 37.3% of building types that developers target for conversion, according to the report. Emily Hubbard, who cofounded Sage Investment Group, a real-estate investment firm that does multifamily renovations and conversions, told Insider in September that conversion projects are attractive because they can be completed quickly and are often less expensive than ground-up construction. Sage recently spent $14.2 million to acquire an Econo Lodge and a Travel Lodge in Tacoma, Washington for conversion from extended-stay hotels into low-income housing, Hubbard said the two properties are expected to produce internal rates of return at nearly 40%, similar to other conversion projects in Sage's portfolio. The RentCafe report estimates that over 77,000 apartments are set to be completed after 2022 with hotels accounting for 22% of the total. Hubbard adds that the need for housing across the country will also continue to spur demand for conversions. "It's on the forefront of everybody's mind," she said.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 8th, 2022

Apartment conversions jumped 25% over the past two years, meaning that swanky place you"re renting likely used to be an office space, hotel room, or church.

More than 77,000 apartments are expected to be created out of old and unused buildings in the coming years as the work-from-home becomes permanent. Developers converted 1,565 apartments in Washington, D.C. last year.Brian Keith Lorraine Developers converted more old buildings into rentals than ever before between 2020 and 2021. Developers are targeting a range of building types, from office buildings to churches. Increased work-from-home and hybrid opportunities is driving the trend. Developers are converting old buildings into new apartments at an all-time high rate as work-from-home becomes permanent, according to a new report from RentCafe. In total, developers created 28,000 new apartments out of old and under-utilized buildings between 2020 and 2021, the report said. That represents a 25% increase over the more than 22,300 apartments developers converted between the years of 2018 and 2019, prior to the pandemic. The study analyzed conversions of buildings that include at least 50 apartments and used market data from RentCafe's sister company, Yardi Matrix. "Not all buildings are equally threatened by the work-from-home revolution," Doug Ressler, a business intelligence manager at Yardi Matrix, said in a statement. "Larger office buildings in abandoned central business districts are better suited to conversion than the often-smaller office complexes distributed around the suburbs."These types of conversions — also known as adaptive reuse — became en vogue during the pandemic as interest rates and the price of construction materials increased. Now that the pandemic has entered its third winter, developers are eyeing residential conversions as a way to "resuscitate office buildings" and meet swelling demand for housing, according to the report. Large cities such as Philadelphia, Cleveland, and Pittsburgh have been a hotbed for such conversion projects because they have a lot of old buildings and unused office spaces, the report adds. Altogether, developers converted more than 3,200 apartments in those cities, or 11% of the nationwide total, the report said. Local governments have gotten behind the trend by creating incentives for conversion projects. For example, California Governor Gavin Newsom signed a pair of bills in late September that let developers bypass local regulations to build housing on commercial land under certain circumstances. Chicago city planners also introduced an initiative in September to convert vacant office spaces along LaSalle Street in the central business district into residential units. "The residential market needs significantly more density in the areas of the largest cities, where the demand is greatest and where the tallest office buildings are located," Ressler said. Developers aren't just targeting offices for conversions either as warehouses, hotels, and factories make up 37.3% of building types that developers target for conversion, according to the report. Emily Hubbard, who cofounded Sage Investment Group, a real-estate investment firm that does multifamily renovations and conversions, told Insider in September that conversion projects are attractive because they can be completed quickly and are often less expensive than ground-up construction. Sage recently spent $14.2 million to acquire an Econo Lodge and a Travel Lodge in Tacoma, Washington for conversion from extended-stay hotels into low-income housing, Hubbard said the two properties are expected to produce internal rates of return at nearly 40%, similar to other conversion projects in Sage's portfolio. The RentCafe report estimates that over 77,000 apartments are set to be completed after 2022 with hotels accounting for 22% of the total. Hubbard adds that the need for housing across the country will also continue to spur demand for conversions. "It's on the forefront of everybody's mind," she said.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 8th, 2022

Low Volatility ETFs to Play Market Volatility

Low-volatility ETFs are in vogue as stock market volatility and uncertainty are not showing any signs of a slowdown. Low-volatility ETFs are in vogue as stock market volatility and uncertainty are not showing any signs of a slowdown. Persistently high inflation and an economic downturn caused by an aggressive Fed rate hike are weighing heavily on the stocks. Notably, all three major indices are in a bear market.Against such a backdrop, investors seeking to remain invested in the equity world could consider low-volatility ETFs. These funds — iShares MSCI USA Min Vol Factor ETF USMV, Invesco S&P 500 Low Volatility ETF SPLV, SPDR SSGA US Large Cap Low Volatility Index ETF LGLV, SPDR Russell 1000 Low Volatility Focus ETF ONEV and Fidelity Low Volatility Factor ETF FDLO — could be solid options for investors in the current choppy market.Low-volatility ETFs have the potential to outpace the broader market in bearish market conditions or in an uncertain environment, providing significant protection to the portfolio. This is because these funds include more stable stocks that have experienced the least price movement in their portfolio. Further, these allocate more to defensive sectors that usually have a higher distribution yield than the broader markets (read: Why Low Volatility ETFs are Beating the Market).Market TrendsThe Dow Jones Industrial Average is down 19.5%, while the S&P 500 has declined 24.7%. The tech-heavy Nasdaq Composite has underperformed, tumbling 33.4%. The rapid tightening of policy to combat inflation has sparked worries of a recession, leading to a sell-off in the stock markets.The Federal Reserve raised interest rates by 75 bps for the fourth consecutive time, which pushed the benchmark rate to 3.0-3.25%, the highest level since 2008. The central bank also signaled additional large rate hikes. Per Reuters, money markets are giving it a 92% chance that the Fed will hike its benchmark rate another 0.75 percentage points when it meets in November.An increase in interest rates means higher loan rates for consumers and businesses, including mortgages, credit cards and auto loans, which will likely cut consumer spending, hurting economic growth (read: Guide to Interest Rates Hike and ETFs).The world's largest economy added 263,000 jobs in September, while the unemployment rate fell to 3.5% from 3.7% in August. The job growth marks a gradual slowdown from the August 315,000 gain and the lowest monthly increase since April 2021. Additionally, manufacturing activity grew at its slowest pace in almost two and a half years last month, according to the Institute for Supply Management.Further, the latest round of selling in chip stocks in the wake of weak demand and U.S. controls on China sales added to the chaos. This pushed the Nasdaq and S&P 500 to fresh bear market lows on Oct 11.ETFs Set to ShineiShares MSCI USA Min Vol Factor ETF (USMV)iShares MSCI USA Min Vol Factor ETF offers exposure to the stocks that have historically declined less than the market during downturns by tracking the MSCI USA Minimum Volatility Index. It holds 172 stocks in its basket, with none accounting for more than 1.8% of the assets. Information technology takes the top spot at 21.9%, while healthcare, consumer staples and industrials round off the next three spots.With AUM of $28.1 billion, iShares MSCI USA Min Vol Factor ETF charges 15 bps in annual fees and trades in a solid average daily volume of 3.5 million shares. USMV has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.Invesco S&P 500 Low Volatility ETF (SPLV)Invesco S&P 500 Low Volatility ETF provides exposure to stocks with the lowest realized volatility over the past 12 months. It tracks the S&P 500 Low Volatility Index and holds 103 securities in its basket. Invesco S&P 500 Low Volatility ETF is widely spread across sectors, with utilities, consumer staples, healthcare and financials receiving double-digit exposure each (read: 5 Winning ETF Strategies for Q4).Invesco S&P 500 Low Volatility ETF has amassed $9.8 billion in its asset base and trades in a solid volume of around 3.3 million shares a day on average. It charges 25 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.SPDR SSGA US Large Cap Low Volatility Index ETF (LGLV)SPDR SSGA US Large Cap Low Volatility Index ETF follows the SSGA US Large Cap Low Volatility Index, which utilizes a rules-based process that seeks to increase exposure to stocks that exhibit low volatility. It holds 146 stocks in its basket, with key holdings in industrials, financials, information technology, consumer discretionary and utilities.With AUM of $563.7 million, SPDR SSGA US Large Cap Low Volatility Index ETF charges 12 bps in annual fees and trades in an average daily volume of about 21,000 shares.SPDR Russell 1000 Low Volatility Focus ETF (ONEV)SPDR Russell 1000 Low Volatility Focus ETF tracks the Russell 1000 Low Volatility Focused Factor Index and focuses on stocks that exhibit low volatility and offer downside protection. It holds 470 securities in its basket with AUM of $554.7 million and an expense ratio of 0.20%. Industrials, consumer discretionary, financials and technology are the top four sectors with double-digit exposure each.SPDR Russell 1000 Low Volatility Focus ETF trades in an average daily volume of about 12,000 shares and has a Zacks ETF Rank #3.Fidelity Low Volatility Factor ETF (FDLO)Fidelity Low Volatility Factor ETF offers exposure to stocks with lower volatility than the broader market by tracking the Fidelity U.S. Low Volatility Factor Index. It holds 129 stocks in its basket. Fidelity Low Volatility Factor ETF has garnered $408.8 million in AUM and trades in an average daily volume of 57,000 shares. FDLO charges 29 bps in annual fees from investors.Bottom LineThese products could be worthwhile for low-risk-tolerance investors and have the potential to outperform the broad market, especially if recession fears continue to dent sentiments. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report iShares MSCI USA Min Vol Factor ETF (USMV): ETF Research Reports SPDR Russell 1000 Low Volatility Focus ETF (ONEV): ETF Research Reports Invesco S&P 500 Low Volatility ETF (SPLV): ETF Research Reports Fidelity Low Volatility Factor ETF (FDLO): ETF Research Reports SPDR SSgA US Large Cap Low Volatility Index ETF (LGLV): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksOct 12th, 2022

300th Episode: Buffett"s 2008 Lessons

Scared of the sell-off? Investors were scared in 2008 too. Here's what Buffett said to do. (1:45) - Can We Learn From Warren Buffett's Advice From 2008?(11:40) - Tracey’s Top Stock Picks: What Should You Be Buying Right Now?(19:20) - Episode Roundup: XOM, CVX, PFE, UNP, CSCO, PNC                Podcast@Zacks.com Welcome to Episode #300 of the Value Investor Podcast.Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.This is a special episode. The Value Investor Podcast first launched in July 2016. It’s been over 6 years of episodes and we’ve finally reached the magical 300th episode. Thanks to everyone for listing through the ups and downs of the last few years.And thanks to the new listeners who have found the Value Investor Podcast in 2022 because value stocks are back in vogue.It’s a good time to be a value investor.Buffett’s Investing Advice in 2008However, 2022 has been rough for investors, whether in value or growth stocks. That’s why it always pays to consult with the Oracle of Omaha, Warren Buffett, for advice on what to do during a big stock market sell-off.And what was a bigger sell-off than the stock market in 2008 during the financial crisis?Buffett took pen to paper on Oct 16, 2008 and published an op-ed in the New York Times called: Buy American. I am. You can read it here.He said about 2008, “Be fearful when others are greedy, and be greedy when others are fearful.”Buffett also warned that earnings could take a hit as businesses suffered through tough economic times but that he believed most companies would be setting new profit records 5, 10 or 20 years down the line.Sound familiar?Stay the CourseBuffett also advised that there will be dark times and that’s when investors should be buying. He said that in the early 1980s, the time to buy stocks was while inflation raged and the economy was in the tank.The stock market has a habit of rebounding well before a recession ends. Wall Street tends to “price in” all the bad news months ahead of time.That’s why it’s so difficult to try and time the bottom. Buffett said in 2008 he wasn’t going to try and time it for the short-term, as he had a long-term investing horizon.That’s good advice.5 Cheap Stocks That Pay Dividends1.       ExxonMobil XOMYou don’t have to reinvent the wheel. Buffett’s Berkshire Hathaway has been buying Chevron this year but ExxonMobil is also cheap.Shares of ExxonMobil are up big in 2022 thanks to rising oil and natural gas prices. It’s jumped 62% year-to-date.But ExxonMobil has a forward P/E of just 7.4 and a PEG ratio of just 0.3. A PEG ratio under 1.0 usually indicates a company has both growth and value.Should ExxonMobil be on your short list?2.       Pfizer PFETracey keeps turning back to Pfizer on the podcast because it remains dirt cheap.Shares of Pfizer have fallen 25% year-to-date, creating a buying opportunity. It now trades with a forward P/E of just 6.8.Pfizer also pays a juicy dividend, yielding 3.6%.Are you waiting to see if Pfizer will get even cheaper?3.       Union Pacific UNPUnion Pacific has been around since the 1860s. This railroad has made it through wars, the Great Depression, assassinations, the Great Recession and it is still growing its business.Shares of Union Pacific have fallen 20% year-to-date. It’s not as cheap as some of the other stocks, however, with a forward P/E of 17.7.It’s still paying a dividend, currently yielding 2.5%.Should the rails be on your short list?4.       Cisco CSCOCisco was one of the tech titans of the 1990s, returning over 10,000% in that decade. But it has never repeated that performance after the dot-com bust.Cisco shares are down 33.7% year-to-date and are now cheap. It trades with a forward P/E of just 11.8.In the 1990s, Cisco didn’t pay a dividend, but it does now, and it’s yielding a juicy 3.6%.Should Cisco be the tech company on your short list?5.       PNC Financial PNCPNC Financial is a large regional bank headquartered in Pittsburgh. Bank earnings should benefit from the Fed raising interest rates.But shares of PNC Financial have also fallen this year, losing 20.5% year-to-date. They’re cheap, with a forward P/E of just 11.1 and a P/B ratio of 1.38.PNC Financial also pays a juicy dividend, currently yielding 3.7%.Is this a buying opportunity in PNC Financial?What Else Should You Know About Lessons from the 2008 Sell-Off?     Tune into this week’s podcast to find out.  Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The PNC Financial Services Group, Inc (PNC): Free Stock Analysis Report Exxon Mobil Corporation (XOM): Free Stock Analysis Report Pfizer Inc. (PFE): Free Stock Analysis Report Cisco Systems, Inc. (CSCO): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksOct 6th, 2022

Why Low Volatility ETFs are Beating the Market

We highlight 3 popular low and minimum volatility ETFs Low volatility investing is back in vogue since the market environment remains extremely challenging. As the global economic growth is slowing significantly and inflation is expected to remain high, we could see continued market turbulence.Many investors have been pouring money into low and minimum volatility funds as they seek shelter from the wild swings in the market. These ETFs hold up relatively well during market declines but may underperform the broader indexes during strong bull markets.The iShares Edge MSCI Min Vol U.S.A. ETF USMV —the most popular fund in the space— selects and weights stocks to create a portfolio that has lower volatility relative to the broader market. Vertex Pharmaceuticals VRTX and Waste Management WM are its top holdings.The Invesco S&P 500 Low Volatility ETF SPLV holds 100 least-volatile stocks in the S&P 500 index. PepsiCo PEP and Johnson & Johnson JNJ are its top holdings.The SPDR SSGA U.S. Large Cap Low Volatility Index ETF LGLV selects least volatile stocks from the broader Russell 1000 Index. Hershey HSY and McDonald's MCD are among the top holdings.These ETFs have significantly outperformed the broader indexes over the past year. To learn more, please watch the short video above. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 27th, 2022

Minimum Volatility & Value ETFs for Turbulent Markets

We discuss how factor ETFs can help investors in the challenging market environment (1:00) - Understanding The Current Market: How Should You Position Your Portfolio For The Rest of The Year?(6:55) - Can You Hold Minimum Volatility Strategies For The Long Term?(10:30) - Low Volatility vs. Minimum Volatility(13:00) - Should You Be Investing In Value Stocks Right Now?(17:15) - How Can Multi-factor ETFs Benefit Your Portfolio?Podcast@Zacks.comIn this episode of ETF Spotlight, I speak with Lukas Smart, Managing Director, Head of U.S. iShares Factor Strategies at BlackRock, the world’s largest asset manager. We discuss how investors can use factor ETFs to navigate choppy and uncertain markets.Minimum volatility investing is back in vogue due to extremely challenging market environment. These ETFs hold up relatively well during market declines but may underperform the broader indexes during strong bull markets. Lukas explains why investors should consider a long-term strategic allocation to minimum volatility.The iShares Edge MSCI Min Vol U.S.A. ETF USMV selects and weights companies to create a portfolio that has lower volatility relative to the broader market. Vertex Pharmaceuticals VRTX and Waste Management WM are its top holdings.Value companies have generally outperformed growth companies during rising rates and inflationary environments.  Investors could consider combining minimum volatility exposure with value to achieve greater diversification benefits.The iShares MSCI USA Value Factor ETF VLUE invests in large- and mid-cap stocks with lower valuations based on fundamentals. AT&T T and Intel INTC are its top holdings.Factor returns have generally proven to be highly cyclical. And timing the market is never easy. Should investor also use multi-factor strategies?Take a look the iShares U.S. Equity Factor ETF LRGF, which aims to maximize exposure to five factors – value, quality, momentum, low volatility, and small size. Apple AAPL, Microsoft MSFT and Amazon AMZN are its top holdings.Tune in to the podcast to learn more.Make sure to be on the lookout for the next edition of ETF Spotlight! If you have any comments or questions, please email podcast@zacks.com. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN): Free Stock Analysis Report Intel Corporation (INTC): Free Stock Analysis Report AT&T Inc. (T): Free Stock Analysis Report Apple Inc. (AAPL): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report Vertex Pharmaceuticals Incorporated (VRTX): Free Stock Analysis Report Waste Management, Inc. (WM): Free Stock Analysis Report iShares MSCI USA Min Vol Factor ETF (USMV): ETF Research Reports iShares MSCI USA Value Factor ETF (VLUE): ETF Research Reports iShares U.S. Equity Factor ETF (LRGF): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 22nd, 2022

5 Most-Loved Dividend ETFs of This Year

Dividend-focused ETFs have been garnering huge investor interest in a rising rate environment. Dividend investing is in vogue this year amid huge volatility and uncertainty. This is especially true as these are major sources of consistent income for investors in any type of market though they do not offer dramatic price appreciation. These stocks tend to outperform in volatile markets and can reduce the volatility of a portfolio.As such, dividend-focused ETFs have been garnering huge investor interest, led by Schwab U.S. Dividend Equity ETF SCHD, which pulled in $8.9 billion in capital. This was followed by inflows of $6.4 billion for Vanguard High Dividend Yield ETF VYM, $4.9 billion for iShares Core High Dividend ETF HDV, $2.9 billion for iShares Core Dividend Growth ETF DGRO and $2.2 billion for iShares Select Dividend ETF DVY.The dividend-focused products offer safety through payouts and stability in the form of mature companies that are less volatile amid large swings in stock prices. This is because the companies that pay out dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis.Additionally, dividend-paying stocks are gaining appeal in a rising rate environment, which is quite negative for bonds. The Fed hiked interest rates for the fourth consecutive time this year, taking the benchmark rate in the range of 2.25% and 2.5% to fight inflation. Lingering Russia-Ukraine tensions, China slowdown and recession fears added to the chaos, thereby making dividend investing an excellent choice (read: Inflation Cools But Food Prices Up Since 1979: ETFs in Focus).Let’s delve deeper into the above-mentioned ETFs:Schwab U.S. Dividend Equity ETF (SCHD)Schwab U.S. Dividend Equity ETF offers exposure to 104 high-dividend yielding U.S. companies that have a record of consistent dividend payments supported by fundamental strength based on financial ratios and ample liquidity. This can be easily done by tracking the Dow Jones U.S. Dividend 100 Index. Schwab U.S. Dividend Equity ETF is well spread across components, with none holding more than 4.4% of the assets. It charges 6 bps in annual fees and trades in a solid volume of about 3 million shares a day.Schwab U.S. Dividend Equity ETF has AUM of $39 billion and a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.Vanguard High Dividend Yield ETF (VYM)Vanguard High Dividend Yield ETF provides exposure to the high-yielding dividend stocks by tracking the FTSE High Dividend Yield Index. Holding 443 securities, the product is pretty well spread out across components as each holds no more than 3.3% of the assets (read: 5 ETFs Set to Bloom as Economy Recovers All Jobs).Vanguard High Dividend Yield ETF has amassed $48.3 billion in its asset base while trading in volumes of 2 million shares a day on average. The expense ratio is 0.06%. VYM has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.iShares Core High Dividend ETF (HDV)iShares Core High Dividend ETF offers exposure to 75 high-quality and high-dividend stocks by tracking the Morningstar Dividend Yield Focus Index. It is slightly concentrated on the top firms, with each making up no more than a 7.2% share.iShares Core High Dividend ETF has AUM of $12.6 billion and trades in a solid volume of around 1.3 million shares a day. It charges 8 bps in fees per year and has a Zacks ETF Rank #3 with a Medium risk outlook.iShares Core Dividend Growth ETF (DGRO)iShares Core Dividend Growth ETF provides exposure to companies having a history of sustained dividend growth by tracking the Morningstar US Dividend Growth Index. It holds 414 stocks in its basket, with each accounting for less than a 3.3% share (read: Growth ETFs Shining to Start Second Half: Here's Why?).iShares Core Dividend Growth ETF has AUM of $24.7 billion and trades in solid volumes of about 1.6 million shares. It charges 8 bps in fees per year and has a Zacks ETF Rank #1 with a Medium risk outlook.iShares Select Dividend ETF (DVY)iShares Select Dividend ETF provides exposure to the high dividend-paying U.S. equities with a five-year history of dividend growth. It follows the Dow Jones U.S. Select Dividend Index and holds 99 securities in its basket, with each accounting for less than 2.2% of assets.iShares Select Dividend ETF has AUM of $22.7 billion and an average daily volume of around 897,000 shares. It charges 38 bps in fees per year from investors and has a Zacks ETF Rank #2 with a Medium risk outlook. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report iShares Select Dividend ETF (DVY): ETF Research Reports iShares Core High Dividend ETF (HDV): ETF Research Reports Vanguard High Dividend Yield ETF (VYM): ETF Research Reports iShares Core Dividend Growth ETF (DGRO): ETF Research Reports Schwab U.S. Dividend Equity ETF (SCHD): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksAug 18th, 2022

Opening Bell: Everyone"s losing on bitcoin

Bitcoin's back in vogue, but for a very different reason than before. This and more, in today's edition of the Opening Bell newsletter. Bitcoin's all over the headlines, but for a very different reason than just a few months ago. Far fewer conversations today are about riding the token to the moon, since it's as close to Earth as it's been since December 2020. I'm Phil Rosen, and it'd be my pleasure to take you on a tour of some of the biggest bitcoin losers on the market right now. If this was forwarded to you, sign up here. Download Insider's app here.Prices have slumped, raising fears about a crypto winter.FTiare/Getty Images1. Bitcoin is weighing on some corporate balance sheets, as the token's precipitous fall these last few days has amounted to some serious losses for well known companies, at least on paper. Take Elon Musk's Tesla for example. According to the most recent filings, the EV-maker owns an estimated 42,000 bitcoins, and it is looking at unrealized losses of nearly $400 million. Or, even more dramatic, consider Microstrategy, which owns 129,219 bitcoin. It has an estimated unrealized loss of about $1.1 billion. And El Salvador, which made bitcoin legal tender in September, owns 2,301 bitcoins. Since its first purchase, bitcoin has shed roughly 50% of its value (although the nation's finance minister doesn't seem concerned).Crypto's meltdown is a "tail wagging the dog" moment. At least that's how veteran trader Mark Mobius described it. He expects the crypto downturn to get worse, and it'll drag stocks lower, too. "Billions of billions of dollars have been put into cryptocurrencies," he told CNBC Tuesday. "As you can see, bitcoin goes down, the S&P 500 goes down. It's a very unusual situation."As if the above weren't concerning enough, the Bank of England governor dished out a grave warning of his own: "Be prepared to lose all your money."In other news:Getty Images2. US stock futures edged higher Wednesday, as investors brace for a crucial Federal Reserve policy decision on interest rates — Aaron Weinman, writer of Insider's 10 Things on Wall Street newsletter, appeared on CBS News to break down the impact of an interest rate hike. Meanwhile, the euro is soaring after the European Central Bank called a surprise meeting to discuss a meltdown in the bonds of the region's more indebted nations. In the crypto market, bitcoin is trading just above $20,000. Here are the latest market moves.3. On the docket: LAIX Inc, John Wiley & Sons, and Naas Technology, all reporting. Also, the Federal Open Market Committee will conclude its two-day meeting today, with the interest rate decision expected at 1 pm ET. 4. Seven crypto influencers opened up about the portfolio wreckage they've suffered in the crash. Hyped token forecasts have turned out wrong so far. These investors shared how they are adjusting to their new reality. 5. Russia's oil production has jumped 5% in June so far. Average daily production is at a higher rate through the first 13 days of June compared to May. All the while, China and India continue to snap up discounted barrels from the sanctioned nation. 6. Leon Cooperman predicted US stocks will plunge 40% in total as the economy crashes into a recession. The billionaire investor said the S&P 500 may have to hit 3,000 before US stocks bounce back — which suggests there's still plenty of room to fall from current levels. 7. Over 80% of investors expect stagflation to shock markets within a year. That's according to Bank of America. As its analysts put it: "Wall Street sentiment is dire."8. The stock market is tanking but UBS said shares of companies targeting high-income spenders could surge as much as 50%. Rising rates and inflation are dishing out a beating on the market. But these 38 stocks highlight a corner of the market that could hold upside.9. A financial coach who books $8,000 a month shared how to earn passive income. Lisa Andrea is also a blogger and marketing expert. These are 9 ways she pulls in thousands of dollars a month.Andy Kiersz/Insider10. The US endured a decline in employment during the pandemic that was twice as severe as the Great Recession's. But the rebound after COVID has been markedly faster. Nonfarm employment is now just 0.5% below the pre-crisis level.Keep up with the latest markets news throughout your day by checking out The Refresh from Insider, a dynamic audio news brief from the Insider newsroom. Listen here.Curated by Phil Rosen in New York. (Feedback or tips? Email prosen@insider.com or tweet @philrosenn.) Edited by Max Adams (tweet @maxradams) in New York and Hallam Bullock (tweet @hallam_bullock) in London. Read the original article on Business Insider.....»»

Category: worldSource: nytJun 15th, 2022

Top Value Stocks with Amazing Dividend Yields

In 2022, you can find cheap stocks that are paying cold, hard cash. Lots of it. (1:00) - Breaking Down The Energy Sector: Strong Value Stocks That Pay Dividends(7:15) - Tracey’s Top Stock Picks(25:45) - Episode Roundup: DVN, PXD, CTRA, FANG, EOG, COP                Podcast@Zacks.com Welcome to Episode #284 of the Value Investor Podcast.Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.Value stocks are back in vogue in 2022 but so are dividend stocks. What if you could buy a cheap stock that was yielding above 5% and also had rising earnings estimates?Too good to be true?Not if you know where to look.Energy Companies to See Record Earnings and Free Cash Flows Again in Q2Energy companies were already paying juicy dividends earlier this year. Many are paying a base dividend, special or variable dividends, and they’re buying back shares because they consider them to be cheap.Combining all three shareholder friendly actions can result in yields above 8%.With crude and natural gas at new decade highs heading into the summer, free cash flows should remain elevated in the near term.Beware: You Can’t Screen for High Dividend Yields Right NowBecause so many companies are paying special dividends, the yields on many energy companies are, frankly, messed up on most financial sites. They are under-reporting the true yield.You have to actually dig into the dividend announcements by the companies.That’s a lot of work, so Tracey has done it for you so you don’t have to.5 High Yield (Over 5%) Cheap Energy Stocks1.       Devon Energy DVNDevon Energy drills in the Delaware Basin. With a market cap of $51 billion, it posted record free cash flow in the first quarter.Devon Energy is paying a fixed plus variable dividend which was $1.27 in the first quarter, payable to shareholders of record as of June 13 on June 30.YahooFinance says Devon Energy is yielding 6.6% but it’s also doing a huge share repurchase program which it raised by 25% to $2 billion in the first quarter.Devon Energy trades at just 8.9x.Should Devon be on your wish list even as it is making new 52-week highs?2.       Pioneer Natural Resources PXDPioneer Natural Resources drills in the Permian Basin and has one of the best balance sheets in the industry. In the first quarter it returned 88% of free cash flow to shareholders though a base dividend, a variable dividend and a share repurchase program.The quarterly and variable dividend in Q1 was $7.38, which at that time was an annualized yield of 13%, the highest in the S&P 500.Pioneer Natural Resources shares are at new highs, up 56% year-to-date. But they’re still cheap with a forward P/E of 8.4.Should you be diving into Pioneer for that huge dividend?3.       Coterra Energy CTRACoterra Energy was formed in 2021when Cabot Oil & Gas and Cimarex Energy merged. It drills in the Delaware Basin, in the Anadarko Basin in Oklahoma and the Marcellus shale in the Appalachian Basin where it drills 100% natural gas.In the first quarter, Coterra Energy paid out 69% of its free cash flow back to shareholders.That included a $0.15 base dividend, a $0.45 variable dividend and starting to execute on its $1.25 billion share repurchase plan.Shares are up 87% year-to-date but still trade with a forward P/E of just 8.7.Is Coterra Energy the hidden gem of the group, especially with natural gas prices soaring?4.       Diamondback Energy FANGDiamondback Energy drills in the Permian and announced on May 16, 2022 that it was acquiring Rattler Midstream.In the first quarter, Diamondback Energy raised its base dividend by 17% to $0.70 per quarter, or $2.80 annualized. That’s a yield of 1.8%. But that’s not all.In the quarter, it announced a variable dividend of $2.35 which combined with the base was yielding 9.7% as of May 2.It’s also repurchasing shares.Should investors be buying Diamondback exclusively for its big dividend?5.       EOG Resources EOGEOG Resources is one of the big drillers with a market cap of $85.6 billion. It has pledged to return a minimum of 60% of its free cash flow to shareholders.In the first quarter it paid a regular dividend of $0.75 and a special dividend of $1.80. The regular dividend, which is $3.00 annualized, was up 86% from the 2021 regular dividend of $1.61.The special dividend of $1.80 is payable on June 30 to shareholders of record as of June 15, 2022.With WTI remaining over $100 for most of the second quarter, should income investors be jumping into EOG Resources?What Else do you Need to Know About Finding Cheap Energy Stocks with Big Yields?   Tune into this week’s podcast to find out.[In full disclosure, Tracey owns shares of PXD in her personal portfolio.] Profiting from the Metaverse, The 3rd Internet Boom (Free Report): Get Zacks' special report revealing top profit plays for the internet's next evolution. Early investors still have time to get in near the "ground floor" of this $30 trillion opportunity. You'll discover 5 surprising stocks to help you cash in.Download the report FREE today >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Devon Energy Corporation (DVN): Free Stock Analysis Report Pioneer Natural Resources Company (PXD): Free Stock Analysis Report EOG Resources, Inc. (EOG): Free Stock Analysis Report Diamondback Energy, Inc. (FANG): Free Stock Analysis Report Coterra Energy Inc. (CTRA): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 10th, 2022

5 Safe Investing Zones &Their ETFs to Escape Market Rout

The events have led to risk-off trading, with lower-risk securities being in vogue. We have highlighted an ETF from five such zones in which investors could stash their money amid the market turmoil. Soaring yields and tightening Fed policy have been playing foul on the stock market, pushing the stocks in deep red from a year-to-date look. The S&P 500 Index is down about 18% so far in 2022 and the Nasdaq Composite Index has dropped about 27%, hit by plunging growth stocks. Almost two-thirds of S&P 500 stocks are down 20% or more from their 52-week highs, according to Refinitiv data.Inside the TurmoilThe Federal Reserve has started raising interest rates more aggressively to fight inflation that will hit consumers and businesses. Fed Chair Jerome Powell has raised interest rates by 50 bps in the latest FOMC meeting. This marks the biggest interest-rate hike since 2000. Inflation is not showing any sign of a slowdown, jumping 8.3% year over year in April. Though it is down from an 8.5% year-over-year increase in March, it still represents the second-highest inflation in four decades.The war in Ukraine worsened disruptions in the flow of goods across borders, resulting in skyrocketing food and energy prices. The higher prices have started to take a hit on corporate profits. Consumer sentiment reached the lowest level since 2011 in May, according to the latest reading of the University of Michigan Sentiment index. Manufacturing activity also grew at its slowest pace in more than one and a half years in April. Notably, the U.S. economy shrank for the first time since the outbreak of the pandemic. GDP dropped 1.4% annually in the first quarter of 2022, marking a sharp reversal from 6.9% annual growth in the fourth quarter (read: U.S. Economy Shrinks in Q1: ETFs to Win/Lose).Additionally, COVID-19 variant concerns and the resultant lockdown measures in China have sparked worries over global economic expansion that continued to weigh on investors’ sentiment.The events have led to risk-off trading, with lower-risk securities being in vogue. Below, we have highlighted an ETF from five such zones in which investors could stash their money amid the market turmoil:Low-BetaLow-beta ETFs exhibit greater levels of stability and usually lose less when the market is crumbling. Though these have lesser risks and lower returns, the stocks are considered safe and resilient.Invesco S&P 500 Downside Hedged ETF PHDG is an actively managed fund and seeks to deliver positive returns in rising or falling markets that are not directly correlated to broad equity or fixed-income market returns. Invesco S&P 500 Downside Hedged ETF tries to follow the S&P 500 Dynamic VEQTOR Index, which provides broad equity market exposure with an implied volatility hedge by dynamically allocating between different asset classes: equity, volatility and cash. The index allows investors to receive exposure to the equity and volatility of the S&P 500 Index in a dynamic framework (read: 5 ETFs to Protect Your Portfolio Amid Market Sell-Off).Invesco S&P 500 Downside Hedged ETF has accumulated $317.8 million in its asset base and charges 40 bps in fees per year from its investors. It has a beta of 0.33. Volume is good, exchanging 156,000 shares a day on average.Low VolatilityThese products have the potential to outpace the broader market providing significant protection to the portfolio. These funds include more stable stocks that have experienced the least price movement. Further, these allocate more to defensive sectors with a higher distribution yield than the broader markets.While there are several options, iShares Edge MSCI Min Vol USA ETF USMV, with AUM of $26.9 billion and an average daily volume of 3.4 million shares, is the most popular ETF. The fund offers exposure to stocks that have lower volatility characteristics relative to the broader U.S. equity market. iShares Edge MSCI Min Vol USA ETF tracks the MSCI USA Minimum Volatility Index, holding 173 stocks in its basket. The product charges 15 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.ValueValue stocks have proven to be outperformers over the long term and are less susceptible to the trending markets. These stocks have strong fundamentals — earnings, dividends, book value and cash flow — that trade below their intrinsic value. These have the potential to deliver higher returns and exhibit lower volatility compared with their growth and blend counterparts.iShares Core S&P U.S. Value ETF IUSV offers exposure to large- and mid-cap U.S. equities that exhibit value characteristics by tracking the S&P 900 Value Index. It holds 742 stocks in its basket, with each accounting for no more than a 3.1% share. iShares Core S&P U.S. Value ETF is widely spread across sectors with health care, financials, industrials, information technology and consumer staples occupying double-digit exposure each (read: 4 ETFs to Ride on Fed's 50 Bps Rate Hike).iShares Core S&P U.S. Value ETF has AUM of $11.5 billion and trades in an average daily volume of 643,000 shares. It charges 4 bps in annual fees and has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.QualityQuality investing also seeks safety and protection against volatility. Quality stocks tend to outperform as these are rich in value characteristics, with healthy balance sheets, high return on capital, low volatility, elevated margins and a track of stable or rising sales and earnings growth.iShares MSCI USA Quality Factor ETF QUAL provides exposure to large and mid-cap stocks exhibiting positive fundamentals (high return on equity, stable year-over-year earnings growth and low financial leverage) by tracking the MSCI USA Sector Neutral Quality Index. iShares MSCI USA Quality Factor ETF holds 124 securities in its basket and trade in an average daily volume of 1.5 million shares. The ETF has AUM of $20.7 billion and charges 15 bps in annual fees.DividendThe dividend-paying securities are the major sources of consistent income for investors when returns from the equity market are at risk. This is especially true as these stocks offer the best of both worlds — safety in the form of payouts and stability in the form of mature companies that are less volatile to the large swings in stock prices. The companies that pay dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis.Vanguard Dividend Appreciation ETF VIG is the largest and the most popular ETF in the dividend space, with AUM of $62.4 billion and an average daily volume of 1.5 million shares.Vanguard Dividend Appreciation ETF follows the S&P U.S. Dividend Growers Index, which is composed of companies that have a record of increasing dividends over time. It holds 289 securities in the basket and charges 6 bps in annual fees. The product has a Zacks ETF Rank #1 with a Medium risk outlook. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Vanguard Dividend Appreciation ETF (VIG): ETF Research Reports iShares MSCI USA Quality Factor ETF (QUAL): ETF Research Reports iShares MSCI USA Min Vol Factor ETF (USMV): ETF Research Reports iShares Core S&P U.S. Value ETF (IUSV): ETF Research Reports Invesco S&P 500 Downside Hedged ETF (PHDG): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksMay 20th, 2022

Black Bear Value Partners 1Q22 Commentary

Black Bear Value Partners commentary for the first quarter ended March 31, 2022. “A nickel ain’t worth a dime anymore.” – Yogi Berra To My Partners and Friends: Black Bear Value Fund, LP (the “Fund”) returned +1.6% in March and +1.9% YTD. The S&P 500 returned +3.7% in March and -4.6% YTD. The HFRI Index […] Black Bear Value Partners commentary for the first quarter ended March 31, 2022. “A nickel ain’t worth a dime anymore.” – Yogi Berra To My Partners and Friends: Black Bear Value Fund, LP (the “Fund”) returned +1.6% in March and +1.9% YTD. The S&P 500 returned +3.7% in March and -4.6% YTD. The HFRI Index returned +0.2% in March and -2.6% YTD. We do not seek to mimic the returns of the S&P 500 and there will be variances in our performance. Note: 2022 returns reflect our reduced 10% incentive fee. .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q4 2021 hedge fund letters, conferences and more Note: Additional historical performance can be found on our tear-sheet. I write to you amidst a volatile market with a good dose of geopolitical and global economic uncertainty. While Black Bear is up on the year, I want to caution everyone that in this environment, markets can act irrationally, and I would not expect our partnership to always be immune. That said, as I will discuss below, we are positioned to do well in this environment both in terms of the investments we have and our ability to deploy capital when others are retreating. From time to time I am asked the following question: “What’s the market telling you?” It can be disappointing or even offensive when I say, “seems like more sellers than buyers” or “the market tells me people haven’t changed too much.” Stocks SHOULD be viewed as proportional shares of businesses no different than the dentist down the street or your local bank. However, due to the auction-driven stock market, stocks serve as an extension of people’s emotions which can be quite volatile. On their own, stocks wouldn’t do anything…PEOPLE do things and people can be extreme in their opinions and behaviors. As a result, stocks just tell me how people may be feeling in the moment independent of the business. This is the opportunity for the fundamental investor. Often when people get scared, they sell to avoid future mark to market losses independent of business fundamentals. We are invested based on what the business is telling us…not the stock…and utilize opportune discounts in the market to our advantage. Brief Discussion on Homebuilding/Housing Frequently people seem intent on fighting yesterday’s battles. Housing led the last multi-year downdraft causing many today to try and paint parallels. The valuations in homebuilding and homebuilding-adjacent businesses are extremely cheap and incorporate a lot of bad news. This theme is a meaningful portion of our portfolio. While mortgages are more expensive today than they were 3 months ago, they are still cheap in absolute and historical terms. While higher mortgages rate reduce affordability increased wages can help mitigate that issue. Underwriting standards have improved since the financial crisis. In fact, it isn’t that easy to get a mortgage with all your documentation in order. The industry is healthier both in terms of operating efficiencies/scale and healthy balance sheets. If business slows down, it will not be 2008 redux. Right now, there is 1.7 months of supply of existing homes. That is not a lot. People have a choice to rent or buy. Current rental vacancies are ~5.6% which matches the multi-decade lows and contrasts with ~10% vacancies in the lead up to the GFC. Additionally, the 0.9% homeowner vacancy rate ties the lowest level on record and is below the 1.6% long-term average and peak of 2.9% in 2008 (Thanks to the team at Credit Suisse for this info.) Home prices are up because people need places to live and we have had chronic underbuilding for a decade. We need more homes, and we need them in the locations people are moving. National averages are not helpful as we own a builder in specific areas of the country. Additionally, averages obfuscate the economics to each mover. For example…homes in Florida may be more expensive relative to past homes in Florida…but not to homes in New York/New Jersey/Connecticut. Affordability is relative. Inflation/Credit Shorts/Pricing Power As a reminder we are short ~ 57% of the fund in various credit instruments. The investment is predominantly but not solely in options so 57% of our portfolio is not at risk. With inflation rearing its head and proving not to be a temporary guest, the cost of money, AKA interest rates, has become an en vogue discussion topic. Is inflation transitory? No clue. But you generally do not roll back wages when you have increased them. Some of the inflation will remain here and set a new baseline for the future. As supply chains normalize inflationary pressures should decrease. However, the world is one big chain reaction and if wheat is not flowing from Ukraine and natural gas/oil is not flowing from Russia to the EU, the dominoes can hit in unpredictable ways both in magnitude and duration. While credit instruments have widened it still does not make sense that a fair price for credit is in the low-mid single digits. Additionally, there seems to be a big push domestically for increased compensation for labor. This will hurt operating margins for many companies and impair their credit profile. In a less accommodating interest rate environment we may see something that we have not in a while…companies defaulting! People are accepting a lousy return considering inflation and default risks. The real return of these investments is negative. As a result, we remain short credit instruments that range from US Junk to Investment Grade to Emerging Markets. I am still dubious that ETF’s can orderly handle a massive sell-off in credit. If the government had not stepped into the market in March 2020 these instruments would have had liquidity issues. We own businesses that have pricing power and limited/no dependance on the need for external funding. This is important because as input and wage costs pressure profitability of many companies, our businesses should be able to weather the storm and capitalize thru both organic market share gains and/or acquisitions of companies that may not have had a healthy balance sheet or operating structure. In a vertical market, where money losing companies can seize on the markets imagination and raise endless funds, the staid and true businesses seem a lot less interesting. Times may be changing and those businesses that can endure will benefit those who own them. Top 5 Businesses We Own Asbury Automotive Group Asbury Automotive Group, Inc. (NYSE:ABG) has many similar qualities to AutoNation, Inc. (NYSE:AN), which we held for the last 5+ years. I don’t typically discuss portfolio activity but given the long-holding and likely questions, I figured I’d address the change in our holdings here. While I admire the AutoNation business there has been a management change and an accompanying change in strategic and capital allocation priorities. It was painful to sell the business as it had been one of our core investments and I believed they were on a great track. Management’s strategy may wind up being successful, but it is different than what I underwrote and as a result a change was needed for our portfolio. I express my thanks to the team at AutoNation as our Partnership has benefited from your stewardship. Asbury had been in the portfolio before. Entering COVID, I decided to concentrate our auto dealer investments into AutoNation. ABG is run by highly capable management who have made 2 accretive and sizeable acquisitions in the past 18 months. The fundamentals of both businesses are similar though there are some differences of note. First a couple negatives. AutoNation has a name brand, whereas Asbury does not. While it’s hard to value what a brand is worth there is value attached to the AutoNation name that we will not have at a corporate level with Asbury. However, at the dealership/consumer level I am not sure there is much of a difference. Second, Asbury has a fair amount of debt (2.8x proforma for acquisitions). I would expect this number to decline both as the operating business performs and debt is reduced. One of the positives of Asbury is their recent acquisition of the Larry H. Miller Group. Typically, most auto dealers receive a commission when a service or warranty plan is sold with the purchase of the vehicle. The Miller Group has built an internal business that operates those plans which are both high margin (20+%) and sticky throughout the lifetime of a customer. As ABG rolls these plans out to their existing dealerships there is an opportunity for meaningful increases in cashflow for every customer transaction. Inventories for cars remain tight and the unit profitability is still unusually high. I underwrite the business on a “steady-state” basis removing the benefits from reduced inventory. Two changes from this pandemic will likely remain in the industry. First, OEM’s and dealers have historically been in a PUSH model where OEM’s send lots of inventory that sits on dealers’ lots. Both have witnessed that with reduced inventory, everyone wins (well maybe not the customer as much.) Working capital needed for inventory is lower and returns on capital and absolute profitability have increased dramatically. It stands to reason that dealer lots will not be stuck with 60-90 days of inventory when supply chains normalize. Second, as digital business continues to grow, the need for headcount at the dealership declines. Most dealerships have managed to grow their businesses without much growth in employees. This operating leverage should continue to increase as dealerships become more fulfillment centers than showrooms/selling spaces. ABG should be able to generate steady-state free-cash per share of $20-$30 implying we own the business at a 12-20% free-cash flow yield on quarter-end pricing. We should do well with or without much growth in the business. Berkshire Hathaway Below is the rough Berkshire Hathaway Inc. (NYSE:BRK.A) on-a-napkin valuation I like to do periodically. Recently BRK acquired Alleghany for $11.6BB. I assume a reduction in cash for this amount and an increase of $550MM in operating income. I do not give benefit to the increased float nor any synergies. Again, this is a rough exercise to sanity check our assumptions. Cash of ~$103,000 per class A Share (vs. $104k 1 year ago) Down/Base/Up marks cash at book value to an 8% premium (vs. to 10% a year ago) Investments based on December prices ~$248,000 per class A share (vs. $194k a year ago) Presume a range of stock prices that result in: Down = $149,000 per class A share (-40%- assumes portfolio is overpriced) Base = $211,000 per class A share (-15% - assumes portfolio is overpriced) Up = $285,000 per class A share (+15%) Operating businesses that should generate ~$17,000 of pre-tax income per Class A share (vs. $15k) Down = 9x = $153,000 per share – equates to ~8% FCF yield Base = 12x = $204,000 – equates to ~6% FCF yield Up = 12x = $204,000 – equates to ~6% FCF yield Overall (vs. $529,000 at quarter end) Down = $413,000 (-28%) Base = $526,000 (fairly priced) Up = $600,000 (13% underpriced) Going forward I expect Berkshire to compound at good, not great returns. The likely question is why own it at all if we expect modest returns… BRK is a collection of high-quality businesses, excellent management, and a good amount of optionality in their cash position. If the cash were to be deployed accretively the true value would be greater than an 8% premium (as mentioned above). The combination of a pie that is growing, an increasing share of said pie due to stock buybacks, upside optionality from cash and a tight range of likely business outcomes that span a variety of economic futures gives me comfort in continuing to own Berkshire. Builders FirstSource Builders FirstSource, Inc. (NYSE:BLDR) is a supplier and manufacturer of building materials for professional homebuilders, subcontractors, remodelers, and consumers. Their products include factory-built roof and floor trusses, wall panels and stairs, vinyl windows and custom millwork. The fundamental discussion about homebuilders applies to BLDR. As more homes are built across the country, there will be an increased need for scaled sourcing of products to homebuilders. There is a large amount of fragmentation in the supply chain which provides BLDR a long runway for acquisitions and realistic synergies. The management team has been using their prodigious free cash flow to both acquire new businesses and buy in their stock. While I historically always liked their business, their historic high-debt levels gave me pause. They have right sized their balance sheet and are taking a very thoughtful view on capital allocation on behalf of shareholders. BLDR should be able to generate $7-$10 a share in cash in the medium term with significant upside if they can scale through acquisition and/or further penetrate existing markets. We own it at a 11-15% free-cash flow yield so little growth is needed for us to compound value at high rates. Green Brick Partners Green Brick Partners Inc (NYSE:GRBK) is a residential land developer and homebuilder. Most of their operations are in Texas, Georgia, and Florida. GRBK was formerly a private partnership between Jim Brickman and entities related to Greenlight Capital (managed by David Einhorn). David is currently the Chairman of the Board. As discussed earlier, there is a long-term fundamental supply/demand imbalance in housing inventory. This is a direct result of underproduction of new homes amid a challenging mortgage financing environment over the last 10+ years since the Great Financial Crisis. Looking forward we should have increased housing demand from millennials as they enter the family-phase of life and desire more space. It is rare to be able to partner with an excellent operator and an excellent capital allocator. As evidenced by our investment in AutoNation, when you marry those 2 concepts you can wind up with a wonderful result. GRBK has been reinvesting their cashflow in additional lots/land inventory. This masks the earnings power of the company. The company is valued somewhere between 5-8x steady-state earnings and potentially even cheaper than that. I tend to be more conservative given the potential for rate rises and inflationary increases in development costs. We have high-quality stewards at both the operating and Board level. Texas Pacific Land Texas Pacific Land Corp (NYSE:TPL) had fallen out of our top 5 in our past letter due to the increase in value of other investments and a modest reduction in our holdings. Additionally, I was cautious as there were some corporate governance issues to be addressed. We appreciate and express our thanks to management as well as some of our fellow shareholders for resolving one of the matters and having the unqualified Board Member exit the Board of Directors. As a reminder, TPL is a royalty company with 100% of their acreage located in the Texas Permian Basin. In a nutshell they make money when drilling activity occurs but DO NOT have the capital needs as they simply provide access to land. The incremental amount of work on TPL’s part is minimal as the extraction and movement of the oil/natural gas is undertaken by others. They are merely a toll collector with Returns on Capital of 80+%. In an inflationary environment, businesses that have lower capital intensity both in capital assets and people stand to benefit. In other words, if oil goes up a lot, the incremental cost to TPL is close to 0 so it’s all incremental profit. This is a business that should benefit in a massive way if we have energy inflation. In the meantime, we likely own it at a 3-4% free cash flow yield with massive upside. Ukraine Part of this job is constantly reading the news and staying abreast of both national and world events. Every day I read the tragic stories about the unneeded bloodshed in Ukraine. As hard as it might be for us all to read it, it’s important to bury our nose in it and consider how we would feel if it was our family and friends. It is in that light that I decided to donate our February management fees to various Ukrainian efforts to help children. I would implore you to not ignore bad news. During our good days we need to remain sober and empathize with those less fortunate. Thank you to our partners who have both contributed thru their management fees and on their own to these causes. I hope that as our business grows, we can collectively do more. Fund Updates As the Fund has grown, we have had to make additional filings with various regulatory agencies. During Q1 we filed with the SEC to become an exempt reporting advisor. 2021 K-1’s should have been received. If you are not in receipt, please let me know. This was a higher-tax year than the previous 4. It seemed like there was a possibility for higher capital-gain rates in 2022 so I made the determination to realize some gains in 2021. Our portfolio and business structure are set up to thrive in rocky waters. I am finding high-quality/inexpensive businesses to own and feel that we have some downside insurance protection from our equity and credit shorts. We will not chase or use our imagination when investing our capital. If we can stay sane when others are acting reckless, we can protect capital during tough times and take advantage of dislocations. Over the last 5-10 years there has been a lot of foolishness and creative investing which provides us a competitive advantage over the coming years. Thank you for your trust and support. Black Bear Value Partners, LP Adam@BlackBearFund.Com www.blackbearfund.com Updated on Apr 8, 2022, 12:30 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkApr 8th, 2022

The Brain Drain That Is Killing America’s Economy

Each spring I get antsy WhatsApp messages from friends across the U.S., as well as London, Dubai, Hong Kong, and Singapore. Their high school senior kids have just been admitted to colleges in America, Canada, Britain, and elsewhere, and they want my opinion on the best option. Over the past decade I’ve been tracking these… Each spring I get antsy WhatsApp messages from friends across the U.S., as well as London, Dubai, Hong Kong, and Singapore. Their high school senior kids have just been admitted to colleges in America, Canada, Britain, and elsewhere, and they want my opinion on the best option. Over the past decade I’ve been tracking these late teens’ decisions and the trend has been unmistakeable: Less America, more Canada. Canadian education is as good as America’s and more affordable. Universities such as Waterloo have blended apprenticeships into their curricula as a requirement for graduation, and McGill has established itself as a global innovation hub. The next beneficiary of America’s reputational fall from grace is Europe, especially universities in England, Scotland, and Ireland. The Netherlands is also very much in vogue as many countries switch to English instruction. [time-brightcove not-tgx=”true”] Global teen talent choosing non-American higher education—and some of America’s best and brightest doing the same— couldn’t come at a worse time. The country’s demographics have been deteriorating since before the 2008 financial crisis, with economic insecurity leading to a sharp drop-off in fertility. The “baby bust” that followed the financial crisis implied that America would have fewer 18-year olds entering college by 2026—and thus many colleges would have to shutter. But thanks to COVID-19, that reckoning has come much sooner. Not only have dozens of colleges closed since 2008 (particularly across the South), but poor finances and unpreparedness for the pandemic remote shift have led to double-digit declines in applicant numbers across the collegiate heartland from the Northeast to the Mid-Atlantic through the Midwest. College enrollment is plummeting as never before across all categories, from community colleges to private four-year universities. The recession has forced many youth to choose between education and employment, with many choosing the latter, leaving educators uncertain as to whether they will ever go to college. Now, the COVID-19 “baby bust” is far more severe than even that of the 2008 financial crisis, meaning even under a roaring economic rebound scenario, many more colleges will go belly up by 2038. Demographic forecasting is a generational exercise, and America’s shrinking youth base is the result not only of lower fertility and rising economic uncertainty, but also because the country has failed to maintain what used to be a huge edge in attracting young talent from around the world. America launched the “War on Terror” over twenty years ago, invading Afghanistan and soon after Iraq. Even as President Obama sought to rebuild America’s prestige, the annual inflow of Chinese and Indian students began to taper and decline during the latter years of his administration. Then came Donald Trump’s visa bans, border walls, and immigration restrictions. Taken together, as the startling data from the latest Census reveals, American immigration has plummeted to an all-time low of only 0.1% between mid-2020 and mid-2021, which amounts to barely 200,000 new migrants. At this rate, America’s population may well soon decline. Even with sanity restored to the White House, America’s reputation remains at a nadir. More than half the world’s population is under the age of forty. From Colombia to Morocco to Afghanistan, they’ve grown up watching America flail militarily and disgrace itself politically. From 9/11 to the war on terror, the financial crisis and rising inequality, all have diminished America in the eyes of the younger generation. Today’s most important battleground is people, not places. There is a global war for young talent to recruit young students, professionals, taxpayers, caregivers, entrepreneurs, investors, and others to ensure healthy demographics, tax base, industry, and innovation. But the young people America needs are a slippery target. Since the 2008 financial crisis, the number of American expats has doubled, many of them young professionals seeking opportunity across fast growing economies from Eastern Europe to the Far East. Now comes the remote revolution. COVID-19 has been a “great reset” in our lifestyles, workplace habits, and other aspects of social and professional life. It will be for global talent migration as well. According to research firm IDC, more than forty percent of the global workforce—at least 1.5 billion people—is “location independent.” The capacity for remote work has graduated from latent to actual. Professionals are moving as never before, both within and across borders—and this is only the immediate mid-pandemic phase. Now imagine the pace of relocation once borders have actually reopened and corporate culture fully adapts to digital platforms. At the moment, asynchronous collaboration is Google Docs and Slack, but soon enough it will be more Github and Metaverse. Many people are quitting their jobs due to burn-out but promising that their next job will be remote. According to the Y-combinator funded Hacker News, the number of job posts featuring remote work have quadrupled since 2017. American tech companies have been the most progressive in embracing remote work. That alone will drive many to seize the moment to relocate abroad. But they’ve also said they plan to hire the best people anywhere for each new position. Suddenly the Bay Area coder may be competing with talent in Kenya. As Simon Kuper wryly warned in the Financial Times, “If you can do your job from anywhere, then someone anywhere can do your job.” Even though the Biden administration is encouraging companies to “buy American” or “hire American,” their DNA guides them to constantly arbitrage the world for taxes, technology and talent. A friend from a major tech company recently flew to Portugal to recruit Europeans and Americans who have planted roots there and corral them into a new co-working space. From Tulum, Mexico, to Athens, Greece, to Phuket, Thailand, entire colonies have sprung up catering to mobile youth in search of sunny, low-tax hubs. Digital nomads are geographically mercenary, using websites like Expatistan and nomad-themed message boards to calculate where to find the best balance between cost of living and quality of life. And those websites are steering them towards Berlin, Prague, Tbilisi, and Bali—not New York and Los Angeles. And according to VanHack, one of the largest platforms of digital nomads in the software industry, Canada, Britain, Germany, the Netherlands, Ireland, and Spain all rank ahead of the U.S. as top destinations for relocating among the more 600,000 developers surveyed. Americans are making Europe great again. A generational shift has occurred that Boomers and even older Gen-X don’t quite grasp: Today’s young professionals don’t identify themselves by their nationality—they identify as talent. Millennial and Gen-Z are content with portfolio careers and working abnormal hours, even for less pay, in exchange for less work and more time for travel and passion projects. Business degrees are a particularly powerful agent of mobility. For all intents and purposes, an MBA is a passport. The world’s eight hundred business schools spread across fifty countries are perhaps the leading agents in stirring the pot in the global war for talent. They recruit worldwide for students and compete fiercely to feed their graduates into multinationals, which then circulate them around the world. Corporate executives may no longer control where employees want to be, but still determine who gets to rise to the top. Executives cluster near headquarters, and human resource departments are starting to emphasize longitude to avoid the inefficiencies of asynchronous coordination. For the same reason, venture capital funds will often have board members in two out of the three—America, Europe, or Asia—but rarely all three. The end-state for global companies might resemble the “Twenty hubs but no HQ” model business guru CK Prahalad prophesied nearly two decades ago. Dozens of countries want to be those hubs. Smart governments are rolling out the red carpet for this new global nomadic class. Before Covid, almost no nation had special “nomad visas” save for Estonia. Now almost 70 countries do. Dubai’s Golden Visa program has attracted hundreds of young entrepreneurs who are given grants and other perks to innovate the country’s AI and drone programs. Sweden and Singapore have “tech pass” programs that actively give grants to start-ups. More broadly, many governments have adopted more clearly tiered migration systems, ladders that residents climb on the pathway from migrant and stakeholder to resident and citizen. America is history’s greatest winner in the war for talent, but the competition is heating up. A decade ago, the U.S. still took in as many migrants as the rest of the rich world combined. But as of 2019, according to a recent CATO Institute study, that gap had narrowed to zero—and that was before COVID-19 travel restrictions. Continued suspicions over Chinese espionage have turned off many Chinese students and scholars. Universities are losing billions of dollars in tuition, property owners are losing tenants, and the cottage industry of language tutors and professional coaches have far fewer clients to assimilate into American life. As Stanford professor and Nobel laureate Steven Chu put it, “We’re shooting ourselves not in the foot but in something close to the head.” Until foreign students are guaranteed a green card with their degree, talented foreign youth may take their brains elsewhere. Don’t be surprised if many of them move over the border and work remotely instead. After all, Canada appears to be the new home of the American Dream. Canada’s points-based immigration policy is luring young people from around the world with the promise of a pathway to citizenship. Even better, the vast majority of new jobs created are full-time rather than just temp work. Meanwhile, only ten percent of America’s immigration application forms are available online. For the cash-rich Asians who represent the majority of global millennials and Gen-Z, Europe is even closer than North America. The U.K. capitalized on Trump’s odious image, admitting a record number of foreign students in 2020. Aging Europe has few children and needs to fill its classrooms with foreigners. Across Europe’s IT sector one finds Indian software engineers and data scientists with degrees from Manchester or Amsterdam, and they’re snapping up EU blue cards instead of American green cards. The Biden Administration has its work cut out for it to attract the world’s best and brightest to America in anything like the numbers it used to. It has managed to let Trump’s H1-B visa restrictions expire, and plans to allow spouses of H1-B holders to work, a boost for would-be two-income households. But immigration reform remains an epic mess, held up by Congressional inaction on the Build Back Better Act whose provisions include a massive overhaul of green card processing that would immediately affect nearly one million current foreign workers. If those workers leave, there won’t be enough skilled Americans to take their place. We need to forecast scenarios for the future distribution of talent from the perspective of Gen-Y and Gen-Z. Hundreds of millions of young people are becoming geography-free. But where they physically go matters. America’s national debt has exploded (100 percent of GDP and climbing), and young workers and taxpayers are needed to power a real recovery beyond today’s artificial stimulus. An aging country with a declining population and crumbling infrastructure isn’t fit to prevail over China, much less outlast its 1.4 billion people in the long run. Despite record-low unemployment, there are still millions of job vacancies. Even after stimulus cheques are spent and wages rise, people aren’t going to rush back into menial labor unless they have to. Furthermore, as hundreds of billions of dollars are deployed on infrastructure across the country, far more workers will be needed to get it all done in any meaningful timeframe. America will need an army of migrants to truly build back better. Demographic renewal requires vigorously competing to attract the next generation. Collecting people is collecting power. The war on terror lasted twenty years. The war for talent should be America’s main mission for the next twenty......»»

Category: topSource: timeJan 21st, 2022