Gold Markets: Bullish Trends in First Quarter Performance

Gold prices gained in value during the first quarter even as upside moves were also tallied in the S&P 500 Index (NYSE: SPY), the NASDAQ Composite Index (NYSE: QQQ), and the Dow Jones Industrial Average Index (NYSE: DIA).

Each of these markets gained positive benefits from the Federal Reserve, as the central bank reversed its hawkish position near the beginning of the year. Further optimism came from progress in trade talks between China and the United States, and this helped push the markets higher during the quarter. Gold prices held steady even as investors saw reduced need for safe-haven assets.

Central drivers for the underlying price of gold in 2019 may develop as a result of the Federal Reserve’s changing tone and the market’s expectations for an extended decline in international growth rates. Negative sentiment that stems from a potential global slowdown has diminished investor concerns of higher interest rates. If these concerns persist (and if the yield curve remains inverted), demand for gold should continue to increase.

Performances from Gold Miners

One of the most popular exchange-traded funds is the VanEck Vectors Gold Miners Trust (NYSE: GDX), which rose by 6.3% in the first quarter of this year. Performances in gold mining stocks have varied widely during the period (depending largely their individual fourth-quarter valuation changes and the different company outlooks for 2019).

(Source: NASDAQ, NYSE)

In Q12019, each of the senior and intermediate gold miners saw bullish trends in their stock values, with the exception of IAMGOLD (NYSE: IAG). The stock dropped 5.7% during the quarter. In contrast, Eldorado Gold (NYSE: EGO) gained by the most in the group (at 60.8%).

Other key names in the industry include Goldcorp (NYSE: GG) and Yamana Gold (NYSE: AUY), which gained by 16.7% and 10.7%, respectively. Mid-level performances were generated by Agnico Eagle Mines (NYSE: AEM) and Kinross Gold (NYSE: KGC), which gained by 7.7%, 6.2%, respectively. Quarterly performances from Newmont Mining (NYSE: NEM) and Barrick Gold (NYSE: GOLD) lagged somewhat, but still posted gains 3.2%, and 1.3%, respectively.

Weaker Gains from Barrick Gold

Senior miner Barrick Gold (NYSE: GOLD) underperformed many of its peers and also lagged behind the performances of key exchange-traded funds NUGT and GDXJ in the first quarter of 2019. The underlying bullish trends in metals did help Barrick stock prices rise by 1.3% in the first quarter, while the benchmark fund GDX produced much more impressive returns (at 6.3%).

(Source: Barrick’s Quarterly Filings)

Disappointing stock trends from Barrick might prove to be short-lived, however, as the company’s fourth-quarter earnings results did beat analyst expectations. Earlier euphoria stemming from Barrick’s announced merger plans with Randgold Resources (which finalized on January 1st) may have reached a point of exhaustion, and profit-taking in bullish positions could be responsible for the weaker performances we have seen recently.

At the moment, analysts are waiting to see material earnings benefits from the proposed execution plans between the two companies. Once this occurs, the stock may have a chance to run higher. Recent guidance indicates potential gold production output of 5.1–5.6 million ounces in 2019 (which would be an increase of 18% year-over-year).

Barrick has reported lower production rates for eight straight years, but the company’s declining production profile could be helped by its deal with Randgold. Barrick’s production costs imply a potential rise of 11% in 2019 (when compared to company data from 2018).

In combination with Barrick’s weaker production guidance, the company also reported a year-over-year decline in its reserves of 3.4%. The average grade of the Barrick’s reserves was unchanged from 2017 (1.56 grams per ton). Barrick continues to maintain the highest grades in the industry (as Goldcorp, Kinross Gold, and Newmont Mining all have lower grades).

Five Gold Stocks Loved by Wall Street

Most of the time, gold mining stock work as a leveraged way of playing gold prices. In 2018, the VanEck Vectors Gold Miners fund dropped by 9.3%, in moved amplified by the 1.9% drop in gold prices.

The Direxion Daily Gold Miners Bull 3X fund (NYSE: NUGT) and the Direxion Daily Junior Gold Miners Bull 3X fund (NYSE: JNUG) saw dramatic price action that surpassed these trends by a large margin. In 2018, NUGT and JNUG weathered losses of 45% and 48%, respectively. Year-to-date in 2019, the benchmark fund GDX has gained 10.3%.

(Source: NYSE)

Of course, gold miners are impacted by company-specific issues in addition to gold’s price movements. So far, several company-specific factors have influenced the performances of the gold miners — and this will likely support prices as investors find out where to sell gold coins in 2019. Barrick Gold finished its planned merger with Randgold Resources in January, and it has also been influenced by problematic factors at its mines.

Similarly, Kinross Gold and Eldorado Gold experienced government interference and stresses after mining code changes. Newmont Mining also announced a merger with Goldcorp in January of this year.

Dividend Stocks, Financial Stocks

BAC: Bank of America Trades Near Inflection Point

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BAC: Bank of America Trades Near Inflection Point

Throughout nine months which has been brought to an end on 30 September, Bank of America (BAC) has generated net income by 162.16% to $7.17B. The net income has increased by 6.43% to $7.18B. On top of all of that, the company has $184.86B worth of cash and due from banks, 8 times higher than from the cash & due from banks of its no.1 competitor which is J.P. Morgan Chase & Co (JPM).

Bank of America is with Wells Fargo having the better current ratio and quick ratio among the top four money center banks as compared to J.P. Morgan Chase and Citigroup. The current ratio and quick ratio of the company evidently manifested the firm capability of the company to shoulder all their debts. As having total assets of $2,338.83B and the current ratio of 11.82, the company will surely be secured from its debts to the upcoming quarters.

In addition to that, Bank of America has achieved a gearing ratio of 1.59. Therefore, the firm’s management will be funded by the equity capital against the creditor financing and highly leveraged because it is higher than 50%.

Key financials

The target price/current last sale’s percent of the target price is $ 52 / 208%, which means the firm had achieved as twice as its aim price as well as it also endured its competitors to this point. The company’s earnings per share have an amount of $8.07.

This is a clear manifestation of the company’s strong profitability which will continue in the future due to their effective operation. Furthermore, we can say that investors can expect to earn more because the price-earnings ratio is $13.43.

	Bank of America	JPMorgan Chase	Wells Fargo	Citigroup
Total Cash & Due from Banks	184.86B	23.23B	18.79B	25.727B
Total Debt	417.35B	516.37B	326.77B	444.93B
Other Earning Asset	972.52B	105.45B	779.231B	1057.52B
Debt to Equity	159.20%	199.40%	164.42%	225.85%
Total Short-Term Debt	200.64B	246.24B	105.45B	209.68B
Current Port. of LT Debt/Capital Leases	4.88B	–	–	–
Total Long-Term Debt	211.84B	270.12B	221.32B	235.26B
Current Ratio(Industry)	11.82	0.69	11.82	1.69
Quick Ratio(Industry)	11.77	1.69	11.77	0.69
Return on Equity	9.73%	12.84%	10.39%	8.46%
Debt Ratio	0.89	0.90	0.89	0.90
Working Capital	262.16B	258.96B	198.741	197B
Return of Asset	1.10%	1.22%	1.29%	0.92%

The 28 forecasters proposing 12-month price forecasts for Bank of America Corp have a median target of 34.75, with a high approximation of 40.00 and a low estimate of $28.00. The median estimate shows a +24.60% growth from the previous price of $27.89.

The recent consent from 30 polled investment forecasters is to buy stock in Bank of America Corp. This assessment has held steady since October when it was unaltered from a buy rating.

Biggest Quarterly Profit in Bank of America’s History

Bank of America has made everyone in awe once more as it pulled out a profit worth $6.9 Billion after 3 quarters of 2018, as it had overcome its personal best attained during 2011.

After compensating $1.5 Billion to President Trump as income tax which is 26% earlier, the company has still envisioned its upcoming success. The company has been advantageous with the law reforms regarding taxes from the rate of 30% plummeted down to 26%. As a result, it has become exultant with the pretax income risen up to 15% whereas revenues up to 4%.

Technological Investment of $500 Million for Innovation and Sales

As Bank of America shut down its branches to different locations and closed its doors to its employees, it has still found and developed ways to reach out for its beloved customers as it enhances the services through technological advancement. Bank of America proposed to open over 500 new US bank branches in the next four years which will cover 88% GDP. Modifications in terms of technology and interior aesthetics will happen with over 1,500 branches and 5,400 certified financial planners will aid the support in the long run.

Final verdict

As the Bank of America has exceeded the expectations by boosting 9% rise in its consumer loan business, reported fourth-quarter earnings of 2017, the corporation could not be contented with the positive response. Even though the year has been good to Bank of America, we could still give them an affirmative assessment and rate “buy” as well.

Retirement, Stock Markets

Retirement: Key Traits of Successful Financial Advisors

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Retirement Planning: Key Traits of Successful Financial Advisors

For many people, the active management of investment finances often becomes an overwhelming challenge. Significant pitfalls can be encountered when mistakes are made, and this is the primary reason a financial advisor strives to provide the guidance that is needed to achieve long-term financial goals.

The term financial advisor is generally used to describe someone that helps with investment management, taxes, retirement strategy, and general financial planning. Of course, not all investment strategies are created equal, and there are many different types of financial professionals. Depending on the type of specialty that is needed, some financial professionals may not be sufficiently qualified to meet the requirements of every investment situation.

This is why it’s always a good idea conduct research beforehand so that it is possible to learn about what’s available and decide on the type of financial advisor that will be best-suited to deliver favorable results. Under ideal scenarios, investment advisors can help navigate the treacherous waters of economics and money management to offer support on the journey toward achieving financial freedom during the later stages of life.

What exactly is a financial advisor?

First and foremost, a financial advisor works as a coaching mentor to help explain when it’s best to make certain financial decisions. Most are experienced in analyzing what’s happening in the financial markets and translating that information into actionable strategies which positively impact individual financial circumstances. Some financial advisors will have more expertise in one area rather than another, so it’s critical to assess individual needs first and then pair those requirements with an advisor’s strengths and abilities.

For example, one advisor may specialize in stock recommendations while others might create an entire financial plan that includes estate recommendations, tax strategies, and insurance planning. This is why financial advisors are often separated into two different categories: investment advisors and financial planners.

We sat down with financial advisor coach Stan Mann to ask questions and learn about which strategies tend to work best for high net worth clients.

What are three important traits seen in successful financial advisors?

Stan Mann: From a marketing standpoint, three characteristics of successful financial advisors are:

1. They understand that effective marketing is crucial for their success. A financial advisor who is a competent marketer will be much more successful than an excellent financial advisor who is not a good marketer.

2. Successful financial advisors implement their knowledge. They go out in the field and put it into action. Knowledge is not power. Knowledge is potential power.

3. They have a marketing plan that they follow step-by-step. It is based upon the fundamentals of marketing: strategies and tactics. They adopt specific strategies and implement tactics to achieve their goals.

For instance, a webinar strategy would include tactics like:

Writing a direct mail letter or email inviting prospects to a presentation
Making a website to maximize conversions
Creating a powerful presentation that employs powerful video marketing techniques
May decide to place an ad in their local paper

What challenges do financial advisors face in this year’s market environment?

Stan Mann: One big challenge financial advisors face in this year’s market environment is the flood of marketing messages. This makes it very difficult for an individual financial advisor to be heard. Therefore, a financial advisor needs to be unique and different from its competitors, so he stands out from the crowd. Another challenge is that people want to work with specialists, so advisors need to specialize in solving a particular problem for a specific group of people. They need to choose a niche.

What is one easy step financial advisors can take to attract more clients?

Stan Mann: Create a headline for your business that concisely tells who you help and how they benefit from your services. Some examples are: Helping families and business owners develop a sound financial strategy; Agent with New York Life offering personal and retirement protection; I help Ford Motor Company executives make the best use of the retirement options.

Is there anything else struggling financial advisors should know to achieve better success rates?

Stan Mann: Marketing alone will not sell big-ticket items that are provided by financial advisors. The goal of marketing is to get a sales interview. At that point, the advisor takes over and needs to convert the prospect and eventually enroll them in all their financial planning services, from investment management to estate planning.

Role of Financial planners

Financial planners tend to offer broader specialties, which can vary widely in scope. Some financial planners are able to create personalized financial plans for clients that cover everything from investments to household budgeting and estate planning.

As a result, these services are typically more comprehensive in nature. But they can also vary widely from one financial planner to another. Other financial planners may only be able to offer a limited number of services, so it is important to be clear availability before entering into contractual agreements.

One formal distinction many find preferable is the Certified Financial Planner (CFP) designation, which requires a bachelor’s degree (or higher) from an accredited college, extensive coursework confirmed through a board-registered educational program and successful completion of the CFP certification exam. CFP certification status can also be verified through the Certified Financial Planner Board of Standards.

Role of Investment advisers

In contrast, an investment advisor tends to be more specialized in terms of the advice and services that are made available. Investment advisors help clients to understand the true value of securities and construct strategies for developing an asset portfolio. Investment advisors can be a firm or an individual person, and they typically analyze the value of stocks, bonds, mutual funds, and other market instruments.

A good investment advisor can assess a client’s financial goals and give recommendations to buy, sell or hold certain assets depending on current market conditions. Some individual investment advisors hold certification as a Chartered Financial Analyst (CFA), which is a highly regarded classification in the field of economics.

When is financial advice needed?

Over the course of a person’s lifetime, financial goals will often evolve and change in ways that can be unpredictable. Events like a death in the family or major career change can negatively influence personal finances.

When big changes occur, it can be helpful to get an expert’s perspective and to get a second opinion before making any important financial decisions. Here are some examples of life situations which could benefit from expert advice from a finance professional:

1. Starting financial planning in early career

In the early years, it might feel as though the future is infinite and that there is no rush to begin financial planning. But the reality is that it is never to early to start building a financial strategy for the road ahead, and a financial advisor might be able to help avoid many of the pitfalls and mistakes commonly encountered by newbies.

Creating a personal budget, securing a mortgage, or preparing an investment portfolio can all be made easier with the help of a seasoned professional.

2. Getting married

Properly dealing with touchy money issues could turn out to make all the difference when developing the financial future with a new spouse. New household unions can create a completely different set of financial challenges, and it is always a good idea to gain advice from people that have encountered those challenges themselves.

3. Entering middle age

Entering the period of middle-age can present its own set of challenges, and these are the years many people must pay college tuition for their children. In addition to this, the period of middle-age is also when many people begin to look at new savings strategies for the retirement years.

4. Preparing for retirement

Reaching the pre-retirement years can be a transformational period in a person’s life. Most people don’t know how much money will be needed in order to achieve security after a career is finished. These are critical questions which can have dramatic ramifications if things are not planned correctly, and a financial adviser can help make preparations to achieve security in the years that follow.

5. Planning for later years

Once a person finishes a working career, it is time to start asking some critical questions. Will it be possible to continue living comfortably on savings? Are potential health expenses adequately covered? Will children, family, and loved ones be secure in the event of an untimely passing? Checking in with a financial can help with the answers to these questions and keep things on track for a secure future. Retirement comes with its own unique set of “what-ifs” but proper financial planning can help to reduce the number of potential uncertainties.

The Bottom Line

No matter what stage of life a person has reached, a little support and guidance can always be valuable and there are many options available when it comes to selecting a financial advisor. Financial experts are able to assess complex economic situations and devise strategies to benefit from the natural ebb and flow of the market.

Partnering with an investment expert can provide the guidance needed to avoid the stress and uncertainties that are often encountered in various stages in life, and the best financial advisors are able to offer hands-on support and individually tailored strategies to help achieve a strong financial future.

For this article, we interviewed Stan Mann, Financial Advisor Coach and Founder of StanMann.com.

Market News, S&P 500, Stock Markets

Federal Reserve: Rising Risks for Recession in 2019?

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Federal Reserve: Rising Risks for Recession in 2019?

In the last few months, the financial markets have experienced rising volatility. This activity has left many consumers on edge and wondering about the best ways to protect their assets. Recent commentaries from the Federal Reserve have also highlighted a growing possibility that the U.S. economy will experience recessionary conditions as early as next year.

Not surprisingly, this has already ignited speculation amongst some analysts that the current environment could be causing another financial collapse similar to what was seen during the 2008 financial crisis.

Of course, much of this speculation is still premature as growth numbers throughout the U.S. remain robust and consumer spending levels are firmly above those which characterized the periods following the credit crunch a decade ago. But there are still factors which households and individual consumers should consider when making plans for investment or spending money as part of a daily routine.

Effects of Interest Rates and Rising Consumer Costs

In all of the chatter (which has drawn similarities between the financial environment of 2008 and the financial environment of 2018), many people have neglected the ways higher interest rates could impact economic growth —at both the micro and macro levels.

But this might turn out to the most critical factor which has changed the market this year. The prospect of higher interest rates can have a major impact on the economics of the stock market and this type of activity has already cost investors a great deal of money with respect to this year’s investment returns.

Additionally, higher interest rates can make large purchases more expensive for households. For example, mortgage lending rates have risen to their highest levels in years and similar trends can be seen in the costs associated with the ability to buy a new automobile.

For those that are able to buy a home or a car outright, these types of scenarios have limited impact on spending practices. But the majority of households and consumers do not fall into this category and this means that an environment of rising interest rates will have a very real impact on the financial health of most people.

U.S. Economics: Focusing on What Matters

For all of these reasons, it is important for us to focus on what matters and it is never a good idea to dismiss the underlying trends which are being developed by the Federal Reserve. These are concepts which might seem to be abstract and esoteric. But this could not be further from the truth, as steadily rising interest rates have a very real impact on the ways we structure our long-term purchases.

Since the continued prospects of higher interest rates make large purchases more expensive, it might make sense to complete some of these purchases before the rate cycle reaches its maximum peak. So, for example, if a family is considering putting off the purchase of a new home until next year, it might actually make more sense to speed-up the timeline and consider alternative options sooner.

Stock Markets: Long Term Economic Trends

In the long run, these types of decision planning practices can have a substantial impact on the monthly payment and total costs which are required of us. Most financial decisions which are made quickly and impatiently tend to cost more over the long-term, and when we make too many of these decisions it is all too common to see the final outcome rest in bankruptcy.

This is why macroeconomic changes matter and the daily fluctuations in the financial news headlines usually do not matter (at least, not as much). With this in mind, consumers can probably look past the speculation that a financial collapse is around the corner. But this does not imply the economy “without risk” is an accurate depiction of the current landscape.

Tech Stocks

Amazon, Inc: Stock Prices Recovering on Stronger Earnings Outlook

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Amazon, Inc: Stock Prices Recovering on Stronger Earnings Outlook

By Richard Cox

Stock market destruction continues and companies with a deep connection to the technology sector have been some of the hardest hit.
After reaching its highs above $2,000 on September 4th, Amazon has fallen sharply (with the stock losing 36.26% of its value by Christmas Eve).
But there is very little reason to believe that these declines are justified when we consider the Amazon’s underlying earnings outlook.
Strong consumer spending at the macro level suggests Amazon’s guidance figures following third-quarter earnings may be far too low.
Upside earnings surprises (relative to weak expectations) should help AMZN extend the rally which began near the end of December.

As widespread destruction continues to ravage stock markets, some of the deepest pain has been felt by those long Amazon, Inc. (AMZN). After reaching highs of $2,050.50 per share on September 4th, the stock lost 36.26% of its value when it reached its lows of $1,307.00 on Christmas Eve. Reversals this forceful can test the will of even the most stalwart and loyal investors. But there is very little reason to believe that these declines are justified when we consider the company’s underlying earnings outlook.

Last holiday season, positive trends in consumer spending put Amazon in a strong position to continue with its consistent streak of earnings outperformance relative to the market’s expectations. As a result, contrarian traders may consider long positions in AMZN with a rising potential to capture significant upside once bearish volatility in the broader market begins to stabilize.

(Prior declines posted near the end of 2018 have soured the tone and put markets on edge with respect to the ability to take aggressive positions in potentially volatile stocks like AMZN. But share prices have already started to break the downtrend channel which defined most of those declines. Moreover, early fundamental indicators appear to be highly supportive for the current earnings outlook. In a recent statement, Amazon announced record performances in its 2018 holiday sales figures, and this presents a stark contrast relative to what has been outlined prior estimates.

Without disclosing specifics with respect to global sales revenue, Amazon has indicated that the company sold more items than it has at any other point in its holiday season operations. This has helped the stock generate a sharp reversal from the lows and erode the negative tone which was set after Amazon released weaker-than-expected guidance figures for the fourth-quarter. With the company’s prior earnings release, Amazon revealed subdued expectations for its operating income figures (indicating minimal growth rates relative to the seasonal performances of 2017).

For the fourth-quarter, Amazon submitted expectations of $2.1 billion to $3.6 billion. This broad range was vague and disappointing enough on its own. But it was also significantly lower than the consensus estimates amongst analysts (which called for $3.9 billion in operating income for the period). This perceived weakness pushed the stock off its highs and placed investors in precarious territory, even before a massive spike in volatility hit the tech sector during the final months of 2018.

Essentially, these events made AMZN bulls highly vulnerable to the exacerbated declines which occurred in the periods that followed. Over the last ten years, only Netflix (NFLX) has proven to be more “astronomical” in terms of its ability to generate forceful rallies.

Unfortunately, the lack of clarity in Amazon’s latest performance statement means that long investors will be forced to wait until earnings are released again in February before we can actually see the impact of positive macro trends in consumer spending. But what we do know is that it will not be overly difficult for Amazon to beat its already-weak guidance figures, and last quarter’s decline in share prices has created an environment which is ripe for extended upside reversals in AMZN.

The good news is that Amazon has developed an incredibly strong history in terms of its ability to surpass stated earnings expectations. Over the last four quarters, Amazon has beaten EPS estimates on every occasion (by an average of 90.79%). It is true that these performances have been overshadowed by the company’s disappointingly weak guidance figures. But the macro data remain supportive and suggest that an upside surprise could be in store for Amazon’s next earnings report.

According to figures released by Mastercard SpendingPulse, U.S. retail sales reached $850 billion during the period extending from November 1st to December 24th. This represents an annual gain of 5.1%, and it marks the best macro sales performance in six years. In its report, Mastercard also indicated that online sales rose by 19.1% on an annualized basis and these are trends which could disproportionately influence price moves in AMZN.

**(Source: University of Michigan/Bloomberg)**

Of course, this does not mean that Amazon will be the only beneficiary of an improving consumer sales environment. But it does lend supportive credence to Amazon’s recent performance statements and this should be viewed as encouraging for those considering long positions in the stock. Earlier this year, Amazon said that it had 100 million Prime subscribers around the world. This trend is continuing strongly, as Amazon has said that the company attracted “tens of millions” of new users this holiday season (including those signing up through free trials) and generated record sales of smart home devices like the iRobot Roomba 690 vacuum cleaner, the Ring Video Doorbell 2, and the Amazon Smart Plug.

Amazon’s Alexa app (which is used to control smart home devices with the Alexa virtual assistant) was also the most downloaded item in the Apple App Store and Google Play store this Christmas. It is true that a strong undercurrent of uncertainty persists throughout the market. But contrarian traders should be asking themselves important questions after the massive declines we have seen in tech-sector stocks over the last few months. Will this be enough to give Amazon the edge when the company reports earnings for the current quarter? It may be too early to tell given the vague nature of Amazon’s public releases. But when we view these contextual trends alongside Amazon’s weak guidance figures (and the resulting collapse in share prices), it seems that AMZN bulls could be setting up for a stable move higher in the early parts of this year.

Looking at the market activity displayed over the last few years, we can see that AMZN stock generally performs well after the company beats market expectations for earnings. A glaring exception can be found in the reactions which followed the Amazon’s most recent earnings release, and this negative example should not be forgotten in the current environment. But at least part of this bearish activity can be attributed to the underlying turmoil which has been present in the stock market as a whole (and tech stocks, in particular). This places a much greater level of importance on Amazon’s next earnings release, and the consensus forecasts are currently calling for EPS of $5.48 for the quarter.

If realized, this would mark an annualized gain of 153.70%, and an earnings performance this strong would could the stock in an excellent position to extend on its recent moves higher once volatility in the broader market begins to stabilize.

Crypto

Daily Market Forecast – Bitcoin Cash Bouncing From Fibonacci Support

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Daily Market Forecast – Bitcoin Cash Bouncing From Fibonacci Support

Price behavior in Bitcoin Cash is showing a reversal from the prior trends posted during the early parts of November. Against the U.S. dollar Bitcoin Cash has rallied sharply since the beginning of the month, and BCH/USD is currently posting a corrective move as a means to work-off its overbought price conditions.

All of this activity has increased volatility in the instrument but we are currently coming into some important technical levels which can be used for new positioning stances in the sessions ahead.

These latest impulse moves in BCH/USD have sent the pair back into Fibonacci support on the 2-hour charts. If we measure from the lows from late October to the highs from November 8th (at 646.80), we can see the the 61.8% Fibonacci retracement comes in close proximity to historical support levels (at 503.10).

Critical Resistance: 646.80

Critical Support: 410.10

Trading Bias: Moderately Bullish

USD/BCH Trading Strategy: Buy at 503.10

The confluence of historical support and Fibonacci retracement readings strengthens the level of importance for the 503.10 price zone. Ultimately, this suggests that we can use this level as tradable support in the establishment of new positioning stances.

Given the extent of the market’s recent price moves, short-term swing traders may elect to stop out the position if these Fibonacci support levels are broken. A downside violation of 503.10 suggests a full retracement of the prior bull wave, and targets a move back into support at 410.10.

With the two-way activity which has defined sentiment for this month, it makes sense to be aggressive with stop losses and take profit levels over the next few sessions. Prices are currently caught within the moving average cluster, and indicator readings are almost exactly at mid-range (which softens the bullish bias).

Retirement, Stock Markets

Financial Planning: Choosing Between Stocks or Bonds for Your Retirement Account

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Financial Planning: Choosing Between Stocks or Bonds for Your Retirement Account

“Behold the turtle. He makes progress only when he sticks his neck out.” — James Bryant Conant

If you are planning for retirement, you have probably felt the pressures involved when looking at all of the different places to park your money. The financial landscape can be a complicated place, and the task of choosing between asset classes can seem daunting during the early stages of the process. Two of the most popular asset classes are stocks and bonds, and many newer investors often wonder which is best for a long-term retirement portfolio.

In any retirement portfolio, investors must understand the concept of market risk as it relates to their positions. This essentially refers to the possibility of losses relative to the potential for reward (gains) in the investment. These factors work hand-in-hand, but a seasoned financial advisor can help understand the nuances which are present when planning for retirement. We sat down with Adam Anderson, CEO of MRA Capital Partners to identify new strategies to turn the odds into our favor on the path toward building wealth. Below, we can find some tips we uncovered along the way.

Measuring Potential Returns

As a general rule, greater potential for gain tends to be associated with larger levels of risk. These factors can be understood when comparing the historical returns generated by investments in both stocks and bonds. When a retirement portfolio is designed by an industry expert and assets are properly allocated, risk is generally a short-term phenomenon. The potential for returns differs when we are comparing the advantages of stocks and bonds, and the appropriate selections for your retirement portfolio will depend heavily on your individual goals and needs.

Over the last century, U.S. Treasury Bills have acted as a proxy for money market accounts (generating yields of roughly 3.7% annually). Longer-term government bonds returns about 5.7% over the same period. Put in simple terms, if you invested $1 in long-term bonds in 1926 your investment would be worth about $100 in 2008. Stock investments, on the other hand, would have produced very different results (generating annual returns of 9.6% during these same periods). In this case, a $1 investment in large-cap stocks in 1926 would be worth about $2,000 just prior to the financial turmoil of 2008.

In the chart above, we can see the more recent trends in stock markets as they relate to the bond markets. Interestingly, there are some cases where the traditional correlations to not match the current tendencies. These asset classes have had periods characterized by similar returns (both small and large). This is precisely why retirement investors will consult an experienced financial advisor, so that it is easier to spot the differences in any given market climate.

“As a CFP and Financial Planner, I’ve practiced the principles of asset allocation and diversification through both bull and bear market cycles as well as expansion, contraction, and recessionary economic climates. Diversification between asset classes is paramount to a successful investment strategy,” Mr. Anderson explained.

“At the most broad level, the mix between stocks and bonds is most commonly debated especially among retail investors and their advisors. In my opinion, the most heavily overlooked asset class for individual investors are alternatives. Alternatives can be commodities, futures, real estate, private equity, art and other non stock or bond investments. Alternatives should make up between 10%-20% of a well diversified portfolio for the average investor but is much higher for some institutional investors, endowments, pensions and high net worth individuals. While I don’t personally endorse this, some even choose to invest only in non market based alternatives ignoring stocks and bonds completely,” Mr. Anderson explained.

“The benefit to alternatives is that when managed correctly, they should be non-correlated to stocks or bonds. Private equity and Real Estate tend to do a very good job at this. The challenge is finding the right managers and strategies that fit the investors goals and comfort level. Another challenge is investment minimums are generally very high and transparency is generally low when investing directly in real estate for example,” Mr. Anderson explained.

MRA Capital Partners seeks to remove these barriers by offering limited partnership interests in a variety of single asset real estate investments as well as its Lighthouse Fund which is a diversified pool of high yield asset backed loans. The individual accredited investor can access these private non-correlated investments for as little as $50,000 and has full transparency via our secure investor portal at www.mracapitalpartners.com.

Limiting Risk in Retirement Portfolios

More broadly, stock markets have generated much higher average returns, and this is why retirement portfolios tend to be more heavily-centered in these areas. Of course, this added potential for return comes with added risk for the investment. But since the stock market tends to post positive results during the vast majority of market scenarios, any losses tend to be removed over time.

These are all risks which must be understood but when we have a well-constructed investment portfolio it becomes possible to turn the odds in our favor. Markets will always experience -boom-and-bust type periods in the broader economic cycle. But when a retirement portfolio is well-constructed and diversified, these risks can be mitigated and substantially reduced. Stock markets move higher during the vast majority of the time, and this is why buy-and-hold strategies tend to work best in generating returns and investment income.

“Heading into 2019, it’s no secret we are in the later stages of the current economic expansion and the federal reserve has made it very clear they plan to continue on their current path of raising rates. This along with the uncertainty surrounding the current political and trade headline risk is likely to continue to cause volatility in the stock and bond markets,” Mr. Anderson explained.

“If rates rise more rapidly than anticipated, bonds may prove to be less of a safe haven or diversifier than investors expected. Additionally, as the world economy continues to become more integrated, many of the more liquid asset classes like stocks, bonds, REITS, and even liquid alternatives like those access via ETFS or Mutual Fund may prove to be more correlated to each other then they have been in the past. In my opinion, carefully selected privately held investments are the best way to gain non-correlated exposure,” Mr. Anderson explained.

Understanding Time Horizons

Time is another important factor in any investment. Will you be retiring 10 years from now? Twenty years? Maybe much sooner? It is never too late to start planning your retirement portfolio. But the time you have until you stop working your regular job can be an important factor in determining which types of assets to include in your investment portfolio. If you have an extend time period before your retirement, there is often better opportunity for capital growth through stock investments. Conversely, if you are looking for short-term stability and income, bonds may offer advantages given your individual needs.

“There are risks associated with all investments. At MRA Capital Partners, we focus on privately held investments back by the hard asset of real estate. While these types of private equity and debt investments are not immune recessions, rising rates and other market forces, they very rarely behave like traditional stocks or bonds which may be a great complement to a balanced portfolio. Additionally, investments offered by MRA Capital Partners have a strong income component, many distributing 10% or more annually which make them a great complement or even alternative to bonds,” Mr. Anderson explained.

Of course, these are all factors which should be discussed with your investment advisor, and the answers will differ depending on your individual needs and goals. There is no substitute for individual attention and it must always be understood that “patience pays” in any financial markets investment. As the sage wisdom of James Bryant Conant tells us “Behold the turtle. He makes progress only when he sticks his neck out.” This suggests a certain level of risk can be taken, as long as those risks are measured and characterized by patience that is well-researched in the current market environment.

For this article, we interviewed Adam Anderson, CFP®, CRPC® CEO – Managing Partner of MRA Capital Partners.

Crypto, Market News

Financial Markets: Understanding The (Short) History Of Bitcoin

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Financial Markets: Understanding The (Short) History Of Bitcoin

Bitcoin markets have had a tumultuous year so far in 2018, and many digital investors have wondered about the possibility that this is truly the end for cryptocurrencies. The financial markets have a long history, and many different types of asset classes are represented within that history. Bitcoin traders will need to remember this in the event that we start to see extreme price volatility in cryptos.

But it is also important to have a longer-term perspective when trading these assets. Cryptocurrency is still in its infancy, but most of the people trading in these markets have little experience with the dynamics of economics. This is a problem, and it essentially assumes that crypto investors can “sidestep” the normal research that would be required in any other market (i.e. stocks, bonds, real estate, precious metals, etc). This is especially true for anyone trading on margin, and it is critical to spend time reading a margin trading guide on cryptocurrencies before placing active positions in the market. Conservative position sizes are always preferable for anyone looking to make steady, consistent gains in any financial markets asset.

For these reasons, it is important to adopt the historical perspective whenever we are looking to make investments in cryptocurrencies. When investors fail to adopt this type of approach, it is essentially a recipe for disaster — and it is something that can quickly lead to financial losses. In the chart above, we can see the typical stages of an asset bubble, which tend to be fairly predictable in nature. This is why it is important to look at the history of the financial markets whenever we are dealing with a new asset like Bitcoin (and the other cryptocurrencies). There is never a substitute for good, old-fashioned market research as it generally pays dividends through patience and conservative investment practices.

The problem with cryptocurrency investing is that many of its participants expected significant short-term gains in a market that had not yet proven itself in terms of financial viability. In this chart, we can see that many different asset classes have experienced similar price activity when compared to the recent trends in Bitcoin. If anything, these trend actually validate Bitcoin as a viable market asset because it is following a path that is similar to what has been seen previously in gold, stocks, and many other market assets.

Anyone that has bought or sold a cryptocurrency is essentially a crypto trader, and crypto traders must remember that the history is still unfolding. The main questions will be answered once consumers understand how these digital assets will actually be used in everyday markets. This is what drives the real economy, and without this type of use cryptos will only be viewed as speculative in nature. Market speculation is what creates “asset bubbles” and the people that tend to lose the most money in those types of situations are the retail traders buying into the hype after people have already started to lose interest.

In this chart, we can see a more linear history of Bitcoin, from its earliest days of inception right through to its acceptance by the market (by major tech organizations like Microsoft, and many other important market entities). This history continues to unfold, and we are likely to see many interesting developments in the future in terms of the ways cryptocurrencies are traded and used for investment. There is never any market approach or technique which can replace traditional market research, but there are rules of investment discipline which should be obeyed whenever we are looking to profit from the underlying trends in valuation.

Going forward, traders and investors will need to continue asking critical questions: What are the underlying trends for the main cryptocurrencies? How many e-commerce store are accepting their use? Have brick-and-mortar stores started to accept Bitcoin for their transactions? These are all questions which need to be asked whenever we are making an assessment of where these digital currencies are likely to head in the future.

It will also be important to remember that the cryptocurrency space goes beyond the use of Bitcoin. There are many different cryptos which are now commonly traded, and those cryptos can even be traded in relation to one another. This has opened up entirely new markets for those looking to make investments in the financial markets. These forecasts should be useful to a totally new set of traders, and this could continue for many years to come.

Dividend Stocks

Dividend Investments: Brookfield Global Listed Infrastructure Income Fund Offers Elevated Return Potential

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Dividend Investments: Brookfield Global Listed Infrastructure Income Fund Offers Elevated Return Potential

Stock markets continue to trade near all-time highs, as both the S&P 500 and NASDAQ have posted recent records in their underlying valuations. For investors, this can complicate the task of identifying inexpensive asset opportunities. But one sector that should be considered by value-oriented investors is in closed-end funds, which often trade at attractive discounts relative to net asset value. Additionally, closed-end funds tend to offer excellent income opportunities for investors seeking reliable dividend payouts.

Dividend stock strategies work well in low-interest rate environments, so when investors are able to combine closed-end fund opportunities with strong income payers it becomes possible to identify the most ideal profitability scenarios in the financial markets. The Brookfield Global Listed Infrastructure Income Fund Inc. (NYSE:INF) offers one such opportunity, with its annualized dividend payout of $0.98 per share (which is paid monthly). This equates to a 7.95% distribution yield, which is far above the 1.76% dividend yield that is currently generated by the S&P 500.

The Fund has rallied over the last six months. The Fund’s current largest 10 holdings are an indicator of the overall positioning and asset allocation.

Looking more deeply into the Fund, we can see that as of June 30, 2018, 99% of its managed assets were in publicly-traded equity securities of infrastructure companies. As of July 31, 2018, the Fund has $202.81 million in assets under management (AUM). Recent rallies in share prices have been built on prior earnings progress from these companies, with broader valuations moving steadily higher since the beginning of 2016. In addition, market concerns regarding interest rate increases and inflation have somewhat subsided.

Market Outlook: Trade Tariffs and Monetary Policy

Most of the market has experienced some level of volatility and turmoil as the impact of political upheavals and heightened tariff discussions has made its influence felt. We are still seeing escalating trade tensions between US, China, and the Eurozone – and this has had a ripple effect on stock exchanges around the world. Moreover, these bearish moves can be attributed to the panic felt by investors relating to potential interest rate increases at the Federal Reserve.

This activity generated many of the declines experienced in stocks such as INF during the February-March period in 2018, and the lower valuation generated by the selling pressure seems to have created a strong buying opportunity for yield-seeking, value-oriented investors.

Deeper NAV Discounts and Higher Returns

On a YTD basis, INF is trading lower by -4%, and this creates added discounts for investors relative to net asset value (NAV).

Given the current trends in the market, INF is trading at a discount to NAV of 14.43%, and this suggests further upside potential in share prices.

Stable Distribution

The Fund is likely to continue attracting the attention of income investors due to its stable distribution payouts. INF offers broad exposure to a global universe of equity securities of publicly-traded infrastructure companies. The Fund yields 7.95% at current price levels ($0.98 per share on an annualized basis). This creates interesting opportunities for value investors given the current low-interest rate environment and the Fund’s recent share prices.

The potential for stable income and a diversification in a real asset class, such as infrastructure, helps INF stand out amongst its peers. As a monthly distribution payer, the stock continues on its positive trend and broader sentiment seems to be falling in line with expectations. All combined, the outlook looks stable and investors could consider INF as a closed-end fund which may capitalize on its four core advantages: portfolio diversification, potential for capital appreciation, and its stable yields for income-seeking, value-oriented investors.

Emerging Markets, Stock Markets

Closed-end Funds: Global Exposure In The Asia Pacific Fund

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Closed-end Funds: Global Exposure In The Asia Pacific Fund

The Asia Pacific Fund, Inc (NYSE: APB) is registered as a closed-end management investment company, with an objective to achieve long-term capital appreciation through investment in Asia Pacific Countries (excluding Japan). This creates the opportunity for investors to gain access to emerging markets throughout the region while still maintaining broad regional diversification.

Source: CEF Connect

Most analysts agree that a significant portion of global growth will be present in emerging Asia over the next decade. These assets can be accessed at cheaper levels given the Asia Pacific Fund’s attractive discount to net asset value (NAV). The fund has rallied strongly since February 2016, and investments here come with an attractive dividend yield of 2.14%.

Economic Trends in Asia

The year 2017 was positive for Asian markets. Stocks throughout the region recovered against the backdrop of upward revisions in earnings and stabilizing political factors externally. The MSCI Asia All-Country Index (which excludes Japan) closed with a 42.1% gain for the year, and its dividend yield index rose by 29.8%. The rising tide lifted many regional funds, and this positivity in global markets helped the Asia-Pacific Fund gain approximately 50% in 2017.

The MSCI Asia All-Country Index (which excludes Japan) closed with a 42.1% gain for the year, and its dividend yield index rose by 29.8%. The rising tide lifted many regional funds, and this positivity in global markets helped the Asia-Pacific Fund gain approximately 50% in 2017. These are strong gains which are more closely in line with the longer-term expectations for Asia (relative to Western economies) through the year 2022.

Source: IMF

However, shorter-term volatility has remained in place, and the first quarter of 2018 was not as expected. In the wake of faster-then-expected interest rate hikes by the US Fed Reserve, investors enacted strategies tied to risk aversion.

The world also saw itself on a brink of a trade war between the U.S. and China, which hastened with widespread tariff implementations. The Asia-Pacific Fund fell 0.9% during the period extending from January 2 to April 2, 2018. The greatest drop in the share prices was between January 31 and February 12, wherein the stocks plunged by 10% before entering correction territory in the next few days.

Fund Holdings

The reality is that as interest rates have increased in Asia, liquidity has tightened. Even though the NAV and the market price of the Asia-Pacific Fund both increased by more than 20%, the year its share of challenges.

Problematic sectors were seen in the internet and software industry. To mitigate the negative influence of global trends, the Asia-Pacific Fund has balanced its portfolio to increase exposure to top performing sectors (like industrials, information technology hardware, and real estate).

Source: Fidelity

The major sector concentrations of the fund are devoted to Real Estate (17.7%), Industrials (16.2%) and Consumer Discretionary assets (15.9%), with 5% given to holdings in both Longfor Properties Company and China Construction Bank (Class “H” Shares).

Financial Performance

The overall performance of the fund was positive during its annual period ending on March 31, 2018. The Asia-Pacific Fund shows that price-to-book multiples, price-to-earnings multiples and its yield remain favorable when compared to the benchmark MSCI AC Asia Index (ex-Japan). Positive developments in this regard prompted the Board to advise shareholders to vote against the proposed liquidation of the fund.

This looks to have been a wise choice given the subsequent performance seen in share prices. Currently, the Asia-Pacific Fund has total net assets of $148.8 million and has 10.3 million outstanding shares as of July 31, 2018. The net asset value stands at $14.38 and a commitment to its Dividend Reinvestment Program is what makes APB a favorable option for prudent investors.

Source: Morningstar

The fund’s NAV per share has increased from $12.96 on March 31, 2017, which means we have seen gains of nearly 11%. On December 21, 2017, the fund paid out a dividend of $0.61 per share (with a yield of 2.11%). The PE Ratio stands at 4.53 and the EPS is $3.2. For the Asia-Pacific Fund, the momentum in earnings revisions has acted as a key driver of growth. Investors can look forward to a potential growth in the stock prices as the fund has posted a consistent performance over the past two years.

After facing a drop in February 2016, the stock raised back by 75% in the period ending November 2017. The increase in the stock was due primarily to the positive performances seen in the real estate and hardware sectors. This suggests that markets are well-prepared to buy the stock when it is trading at a significant discount. The positive performance and economic growth of the Asia Pacific region continues to have a positive impact on share prices – and this looks set to continue in the quarters ahead.