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What Can Investors Do Now?

What Can Investors Do Now?

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Facebook Live with Christine Short
April 6, 2020 Transcript

Today we’re kicking off a weekly series we’re going to hold throughout earnings season in which we preview earnings for the week ahead and take a look at some of our picks from the TipRanks platform. And later in this segment I’ll dive into some of names we’re seeing perform reasonably well during this volatile time, but first I just want to take a minute to talk about how investors can respond to this crisis.

I’ll just preface that by saying I’m not a financial advisor but there are some rules of thumb when it comes to approaching the markets in times of panic.

Many people are feeling frightened and vulnerable, and that’s understandable. There is a lot of risk right now, not just to our investments, but to our health, our healthcare system, the economy, and our jobs. This is being compounded by a lot of unknowns, such as how long the coronavirus crisis will last and the scale of its impact.

The best way not to panic about your investments is not to look at them! And I know that is easier said than done, and also depends on where you are in your life and your career. If you can, focus on the things you can control right now like your health and your family. If you have a good long-term investment plan and are years away from needing to cash it in, then just remember that this too shall pass. History has shown us time and again that long-term investing works. Panicking never helped anyone make smart decisions.

In fact, in the last 90 years, the S&P 500 has gone up an average of 11.4% a year, that data comes courtesy of DataTrek Research. The chance of a year with a 20%+ increase is 36% vs. only a 12% chance of a drop of 10% or more, meaning we are 3x more likely to see an increase of 20% or more than a drop of 10% or more. Now 2020 looks like it is lining up to be a year with one of those drops, already down over 20% for the year, but know that it’s very unlikely to continue for consecutive years. The last time we saw 2 or more consecutive years of declines was when the dot com bubble burst in 2000 – 2002, even the great recession only had one down year (2008, although it was a doozy of -38%), followed by a 10 year bull market. And while the current market environment is playing out a lot like 2008, we know the underlying economy was much stronger leading into this as compared to the subprime mortgage crisis, but it is still too early to tell if that will be enough to save us in the long run.

We now have fiscal and monetary policy in place which have reassured investors in the last couple of weeks, but many analysts believe we need to see an inflection in infections before we hit a true bottom, and according to projections that could still be weeks away.

However, if you do want to take advantage of the current market situation, then there are plenty of opportunities. Certain industries can offer protection in this bear market. Consider for example the essential goods and services industry – companies that manufacture the things that people need on a daily basis. I looked earlier at TipRanks Top smart scores  – we calculate the smart score by looking at 8 factors we’ve found to be most highly indicative of future stock performance, things like analyst recommendations, activity from insiders and hedge funds, sentiment from news, individual investors and financial bloggers, as well as technicals and fundamentals – and it’s no surprise that defensive consumer stocks are dominating.  Campbell’s, Costco, Kellogg, and Archer Daniels Midland all have smart scores of 10.

I’m going to go to a screen on Campbell’s now just so you can get a sense of what that looks like. Here you can see they have a Smart Score of 10, with almost all factors being positive with the exception of asset growth. I can then drill down into any one of those 8 indicators, so here I can see what the best sell-side analysts on the platform are saying, in aggregate they have CPB as a hold, below that I can sift through individual analyst’s recommendations.

There are also the healthcare names that are on the frontline of battling the virus, for example through testing equipment or vaccine development that investors are putting their hope on. There are 16 companies in this sector currently working on a vaccine, big names such as Gilead, Regeneron, and Pfizer, and smaller biotech names such as Inovio, Moderna and NovaVax. All have smart scores of 9 – 10.

I’m going to jump into GILD right now, you can see they have a Smart Score of 9, but with quite a bit of insider selling at the moment, and just slightly negative asset growth.

Some are also seeing this as an opportunity to buy big tech names at a lower price. And when we think of big tech the FAANG names immediately come to mind.  

I’m going to jump to Apple to see how things look there. Solid Smart Score of 9, but hedge fund activity has fallen, retail investors seem pretty bearish and asset growth is down over 8%. Still, this could be a great opportunity to get into Apple at a 6 month low.

Bear in mind however, we don’t know when prices will hit rock bottom. When you’re investing for the long term it’s great to invest when prices are down, but you shouldn’t try to time a bottom and put all of your money in on one day.  Instead, it’s best to invest incrementally over a certain period of time. If you’re investing smaller amounts on a consistent basis, you’ll pay more on some days, less on others, and ultimately that will average out.

As always, remember that diversification is key for your investment portfolio. A portfolio that is genuinely diversified is best positioned to smooth out shifts in one area of the economy.

If you are looking to invest just now, make sure you do your research.

There are plenty of seasoned professionals with a proven track record who can help inform your investment decisions. Canaccord’s Richard Davis, who ranks in first place on TipRanks, advises investors to only consider “companies with pretty much bullet-proof prospects that won’t miss”. There are other very accurate professionals and non-professionals sharing advice – you just have to be careful who you listen to!

At TipRanks we’re here to help you carry out reliable research and know whose investment advice you can trust.  

That’s it for today. If you have any topics that you would like us to cover in live chats, please let us know in the comments. We’ll be back Monday with a preview of Q1 earnings season which is set to commence next week with the airlines and big banks.

Take care and look after yourselves!

The post What Can Investors Do Now? appeared first on TipRanks Financial Blog.

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Homes listed for sale in early June sell for $7,700 more

New Zillow research suggests the spring home shopping season may see a second wave this summer if mortgage rates fall
The post Homes listed for sale in…

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  • A Zillow analysis of 2023 home sales finds homes listed in the first two weeks of June sold for 2.3% more. 
  • The best time to list a home for sale is a month later than it was in 2019, likely driven by mortgage rates.
  • The best time to list can be as early as the second half of February in San Francisco, and as late as the first half of July in New York and Philadelphia. 

Spring home sellers looking to maximize their sale price may want to wait it out and list their home for sale in the first half of June. A new Zillow® analysis of 2023 sales found that homes listed in the first two weeks of June sold for 2.3% more, a $7,700 boost on a typical U.S. home.  

The best time to list consistently had been early May in the years leading up to the pandemic. The shift to June suggests mortgage rates are strongly influencing demand on top of the usual seasonality that brings buyers to the market in the spring. This home-shopping season is poised to follow a similar pattern as that in 2023, with the potential for a second wave if the Federal Reserve lowers interest rates midyear or later. 

The 2.3% sale price premium registered last June followed the first spring in more than 15 years with mortgage rates over 6% on a 30-year fixed-rate loan. The high rates put home buyers on the back foot, and as rates continued upward through May, they were still reassessing and less likely to bid boldly. In June, however, rates pulled back a little from 6.79% to 6.67%, which likely presented an opportunity for determined buyers heading into summer. More buyers understood their market position and could afford to transact, boosting competition and sale prices.

The old logic was that sellers could earn a premium by listing in late spring, when search activity hit its peak. Now, with persistently low inventory, mortgage rate fluctuations make their own seasonality. First-time home buyers who are on the edge of qualifying for a home loan may dip in and out of the market, depending on what’s happening with rates. It is almost certain the Federal Reserve will push back any interest-rate cuts to mid-2024 at the earliest. If mortgage rates follow, that could bring another surge of buyers later this year.

Mortgage rates have been impacting affordability and sale prices since they began rising rapidly two years ago. In 2022, sellers nationwide saw the highest sale premium when they listed their home in late March, right before rates barreled past 5% and continued climbing. 

Zillow’s research finds the best time to list can vary widely by metropolitan area. In 2023, it was as early as the second half of February in San Francisco, and as late as the first half of July in New York. Thirty of the top 35 largest metro areas saw for-sale listings command the highest sale prices between May and early July last year. 

Zillow also found a wide range in the sale price premiums associated with homes listed during those peak periods. At the hottest time of the year in San Jose, homes sold for 5.5% more, a $88,000 boost on a typical home. Meanwhile, homes in San Antonio sold for 1.9% more during that same time period.  

 

Metropolitan Area Best Time to List Price Premium Dollar Boost
United States First half of June 2.3% $7,700
New York, NY First half of July 2.4% $15,500
Los Angeles, CA First half of May 4.1% $39,300
Chicago, IL First half of June 2.8% $8,800
Dallas, TX First half of June 2.5% $9,200
Houston, TX Second half of April 2.0% $6,200
Washington, DC Second half of June 2.2% $12,700
Philadelphia, PA First half of July 2.4% $8,200
Miami, FL First half of June 2.3% $12,900
Atlanta, GA Second half of June 2.3% $8,700
Boston, MA Second half of May 3.5% $23,600
Phoenix, AZ First half of June 3.2% $14,700
San Francisco, CA Second half of February 4.2% $50,300
Riverside, CA First half of May 2.7% $15,600
Detroit, MI First half of July 3.3% $7,900
Seattle, WA First half of June 4.3% $31,500
Minneapolis, MN Second half of May 3.7% $13,400
San Diego, CA Second half of April 3.1% $29,600
Tampa, FL Second half of June 2.1% $8,000
Denver, CO Second half of May 2.9% $16,900
Baltimore, MD First half of July 2.2% $8,200
St. Louis, MO First half of June 2.9% $7,000
Orlando, FL First half of June 2.2% $8,700
Charlotte, NC Second half of May 3.0% $11,000
San Antonio, TX First half of June 1.9% $5,400
Portland, OR Second half of April 2.6% $14,300
Sacramento, CA First half of June 3.2% $17,900
Pittsburgh, PA Second half of June 2.3% $4,700
Cincinnati, OH Second half of April 2.7% $7,500
Austin, TX Second half of May 2.8% $12,600
Las Vegas, NV First half of June 3.4% $14,600
Kansas City, MO Second half of May 2.5% $7,300
Columbus, OH Second half of June 3.3% $10,400
Indianapolis, IN First half of July 3.0% $8,100
Cleveland, OH First half of July  3.4% $7,400
San Jose, CA First half of June 5.5% $88,400

 

The post Homes listed for sale in early June sell for $7,700 more appeared first on Zillow Research.

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Survey Shows Declining Concerns Among Americans About COVID-19

Survey Shows Declining Concerns Among Americans About COVID-19

A new survey reveals that only 20% of Americans view covid-19 as "a major threat"…

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Survey Shows Declining Concerns Among Americans About COVID-19

A new survey reveals that only 20% of Americans view covid-19 as "a major threat" to the health of the US population - a sharp decline from a high of 67% in July 2020.

(SARMDY/Shutterstock)

What's more, the Pew Research Center survey conducted from Feb. 7 to Feb. 11 showed that just 10% of Americans are concerned that they will  catch the disease and require hospitalization.

"This data represents a low ebb of public concern about the virus that reached its height in the summer and fall of 2020, when as many as two-thirds of Americans viewed COVID-19 as a major threat to public health," reads the report, which was published March 7.

According to the survey, half of the participants understand the significance of researchers and healthcare providers in understanding and treating long COVID - however 27% of participants consider this issue less important, while 22% of Americans are unaware of long COVID.

What's more, while Democrats were far more worried than Republicans in the past, that gap has narrowed significantly.

"In the pandemic’s first year, Democrats were routinely about 40 points more likely than Republicans to view the coronavirus as a major threat to the health of the U.S. population. This gap has waned as overall levels of concern have fallen," reads the report.

More via the Epoch Times;

The survey found that three in ten Democrats under 50 have received an updated COVID-19 vaccine, compared with 66 percent of Democrats ages 65 and older.

Moreover, 66 percent of Democrats ages 65 and older have received the updated COVID-19 vaccine, while only 24 percent of Republicans ages 65 and older have done so.

“This 42-point partisan gap is much wider now than at other points since the start of the outbreak. For instance, in August 2021, 93 percent of older Democrats and 78 percent of older Republicans said they had received all the shots needed to be fully vaccinated (a 15-point gap),” it noted.

COVID-19 No Longer an Emergency

The U.S. Centers for Disease Control and Prevention (CDC) recently issued its updated recommendations for the virus, which no longer require people to stay home for five days after testing positive for COVID-19.

The updated guidance recommends that people who contracted a respiratory virus stay home, and they can resume normal activities when their symptoms improve overall and their fever subsides for 24 hours without medication.

“We still must use the commonsense solutions we know work to protect ourselves and others from serious illness from respiratory viruses, this includes vaccination, treatment, and staying home when we get sick,” CDC director Dr. Mandy Cohen said in a statement.

The CDC said that while the virus remains a threat, it is now less likely to cause severe illness because of widespread immunity and improved tools to prevent and treat the disease.

Importantly, states and countries that have already adjusted recommended isolation times have not seen increased hospitalizations or deaths related to COVID-19,” it stated.

The federal government suspended its free at-home COVID-19 test program on March 8, according to a website set up by the government, following a decrease in COVID-19-related hospitalizations.

According to the CDC, hospitalization rates for COVID-19 and influenza diseases remain “elevated” but are decreasing in some parts of the United States.

Tyler Durden Sun, 03/10/2024 - 22:45

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Rand Paul Teases Senate GOP Leader Run – Musk Says “I Would Support”

Rand Paul Teases Senate GOP Leader Run – Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump…

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Rand Paul Teases Senate GOP Leader Run - Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump into the race to become the next Senate GOP leader, and Elon Musk was quick to support the idea. Republicans must find a successor for periodically malfunctioning Mitch McConnell, who recently announced he'll step down in November, though intending to keep his Senate seat until his term ends in January 2027, when he'd be within weeks of turning 86. 

So far, the announced field consists of two quintessential establishment types: John Cornyn of Texas and John Thune of South Dakota. While John Barrasso's name had been thrown around as one of "The Three Johns" considered top contenders, the Wyoming senator on Tuesday said he'll instead seek the number two slot as party whip. 

Paul used X to tease his potential bid for the position which -- if the GOP takes back the upper chamber in November -- could graduate from Minority Leader to Majority Leader. He started by telling his 5.1 million followers he'd had lots of people asking him about his interest in running...

...then followed up with a poll in which he predictably annihilated Cornyn and Thune, taking a 96% share as of Friday night, with the other two below 2% each. 

Elon Musk was quick to back the idea of Paul as GOP leader, while daring Cornyn and Thune to follow Paul's lead by throwing their names out for consideration by the Twitter-verse X-verse. 

Paul has been a stalwart opponent of security-state mass surveillance, foreign interventionism -- to include shoveling billions of dollars into the proxy war in Ukraine -- and out-of-control spending in general. He demonstrated the latter passion on the Senate floor this week as he ridiculed the latest kick-the-can spending package:   

In February, Paul used Senate rules to force his colleagues into a grueling Super Bowl weekend of votes, as he worked to derail a $95 billion foreign aid bill. "I think we should stay here as long as it takes,” said Paul. “If it takes a week or a month, I’ll force them to stay here to discuss why they think the border of Ukraine is more important than the US border.”

Don't expect a Majority Leader Paul to ditch the filibuster -- he's been a hardy user of the legislative delay tactic. In 2013, he spoke for 13 hours to fight the nomination of John Brennan as CIA director. In 2015, he orated for 10-and-a-half-hours to oppose extension of the Patriot Act

Rand Paul amid his 10 1/2 hour filibuster in 2015

Among the general public, Paul is probably best known as Capitol Hill's chief tormentor of Dr. Anthony Fauci, who was director of the National Institute of Allergy and Infectious Disease during the Covid-19 pandemic. Paul says the evidence indicates the virus emerged from China's Wuhan Institute of Virology. He's accused Fauci and other members of the US government public health apparatus of evading questions about their funding of the Chinese lab's "gain of function" research, which takes natural viruses and morphs them into something more dangerous. Paul has pointedly said that Fauci committed perjury in congressional hearings and that he belongs in jail "without question."   

Musk is neither the only nor the first noteworthy figure to back Paul for party leader. Just hours after McConnell announced his upcoming step-down from leadership, independent 2024 presidential candidate Robert F. Kennedy, Jr voiced his support: 

In a testament to the extent to which the establishment recoils at the libertarian-minded Paul, mainstream media outlets -- which have been quick to report on other developments in the majority leader race -- pretended not to notice that Paul had signaled his interest in the job. More than 24 hours after Paul's test-the-waters tweet-fest began, not a single major outlet had brought it to the attention of their audience. 

That may be his strongest endorsement yet. 

Tyler Durden Sun, 03/10/2024 - 20:25

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