Well first off, what is an ETF? ETF stands for exchange traded fund and they are assets typically comprised of stocks from multiple companies bundled together. ETFs can also be made up of commodities, bonds, or a mixture of investment types. ETFs are traded on exchanges just like stocks are. The Standard and Poor’s 500 Index, or S&P 500, by far the most famous ETF. The S&P 500 represents the 500 largest companies and is often used as a measure for how the U.S. economy is doing.
What is the best ETF? There is no right answer for that. There are numerous different types of ETFs that you could potentially invest in such as bond (might include government, corporate, or state bonds), industry (track a particular industry such as technology, banking, or the oil sector.), commodity (gold, oil, etc.), and currency (Euro, Yen, etc.) ETFs. There are even inverse ETFs comprised of stocks you’re shorting.
So what exactly is a stock? Stocks are shares of a publicly traded company that people can buy and sell on exchanges like the NYSE and Nasdaq. Companies that want to sell stocks go through an IPO process where they are valuated and establish a number of shares they want to allow the public to purchase. Once a target IPO price is established and they can start being traded, then it’s up to the supply and demand of shares that drives stock prices up or down.
Now that we’ve clarified exactly what the difference is between the two, which is better? That depends on your strategy. Purchasing stocks gives you the opportunity to focus on the companies that stand out within their given industries or that you feel are undervalued. ETFs are good for the longer term and a good way to diversify your portfolio because they can give you access to many stocks across various industries.
I currently don’t have any ETFs in my portfolio but I am going to start researching them more. I’ve been keeping an eye on ARKK and ARKF, both are popular tech ETFs managed by famous investor Cathie Wood. What are your thoughts on ETFs vs. stocks? Leave me a comment and let me know. Follow my Twitter @VanceAlm where I’m constantly posting articles and blogs about news in the financial word.
Obviously, Tesla (TSLA) isn’t a new company so I’m sure many of you have already had money invested in the company. But I’ve noticed over the past 5 months Tesla’s stock price seemed overvalued. Starting 11/16/2020, their stock price gained a massive $100 per share jumping up from $400 to $500 over the course of just THREE DAYS from 11/16-11/19. Tesla’s stock price’s started skyrocketing and started shooting to the moon. The price peaked around $890 per share during this past January and has been on the decline since then.
Today, 3/26/2021, Telsa’s stock price has dipped down to around $610 per share. The last time we saw it’s price go this low was when it dipped three weeks ago around 3/8/2020, where it quickly shot back up in price averaging $700 per share since then. I personally think this stock was out of control over the past few months with volatility, but I believe the price has corrected. Over the past week, the price has gone from $670 and dipped down to $610 today.
I think it’s currently in a dip and that could make this a good time to invest. There has also been a lot of government talk about transitioning to electric vehicles (EVs) and increasing infrastructure for charging stations. This could mean a huge increase in sales because of fleet purchases. But I think the potential government incentives for building the infrastructure for more charging stations could be HUGE.
In other recent Tesla news, Elon Musk has talked about a large expansion at the Shanghai factory and has said the Chinese market will be Tesla’s “biggest market” in the long term. Also, PepsiCo has preordered and expects to be the first recipients of 15 brand new Tesla semitrucks this year at their Modesto, CA Frito-Lay manufacturing facility. In other Tesla semitruck news, it might not be legal on roads in Australia due to a law there where vehicles cannot be wider than 250 centimeters but it measures 3.8 centimeters wider than that, Tesla is lobbying for this rule to be amended.
I personally think all this recent news along with the current dip in it’s stock price makes Tesla a very tempting investment opportunity. I am no expert and this is not financial advice on how to invest your own money, but I personally bought some Tesla today. Leave me a comment with your thoughts regarding Tesla.
Bitcoin is constantly in the news, especially with more and more big banks and companies jumping on the bitcoin bandwagon, but many people are still asking themselves what exactly is bitcoin? Bitcoin is a cryptocurrency that was created in 2009 by an anonymous person or group that went by the name Satoshi Nakamoto. Bitcoin is a decentralized digital currency that isn’t backed by any governments or central banks. Instead, bitcoin utilizes blockchain technology where transactions are sent from user to user over the peer-to-peer network and the transactions are then verified by network nodes through cryptography and recorded in a public distributed ledger.
Physical bitcoins do not actually exist, there are just balances kept on a public distributed ledger that everyone has access to. All bitcoin transactions are verified using a massive amount of computing power. Bitcoin has been criticized for the amount of electricity used to very transactions, a process known as mining. The mining process uses high-powered computers to solve complex computational math problems. The results of bitcoin mining are twofold where bitcoins are created, and miners make the bitcoin network trustworthy and secure by verifying its transaction information by solving computational math problems.
Bitcoin has also been scrutinized in the past for its use in illegal transactions, price volatility, and thefts from exchanges. But recently big names such as Tesla, Square, and MicroStrategy have invested billions of dollars in bitcoin. Financial services companies like Morgan Stanley and Fidelity are now looking to incorporate bitcoin in their investment funds. Tesla even recently started offering customers the ability to purchase cars in bitcoin.
What are your thoughts on bitcoin? Is it the currency of the future? Or is it a speculative bubble that will eventually burst? Leave me a comment below with your opinion on bitcoin.
Now that you have your stimulus money, what should you do with it? My advice is to invest as much as you can. But how do you start? Apps like Robinhood, Webull, and Stash have made investing ultra easy and user friendly.
A huge reason these apps are so popular is the fact that they offer commission-free online stock trading. In the past, financial services companies such as Fidelity, Merrill, and Charles Schwab charged fees for buying or selling stocks. These apps have changed that and enabled users to buy and sell stocks with no trading fees. Some of the apps like Stash charge a $1 monthly fee but that is nothing compared to commissions and fees that companies used to charge. Webull is nice because they are a free platform plus they offer free stocks just for depositing money on the platform.
Each of the online brokers has their own unique benefits along with their different user interfaces. Stash is a good beginners investing app because it has very basic information and graphs. Stash and Robinhood are nice options because you can purchase partial shares, so in case you don’t have $2,000 for one share of Google or $57,000 to buy one bitcoin, you can purchase partial shares with whatever dollar amount you choose. Webull is my personal favorite platform because it displays the most useful information along with news articles about the companies you’re researching. Webull also has a social media aspect where there’s a comment section so you and fellow investors can interact. I really like how Webull gives you more trading options than the other platforms, such as inputting the price your willing to buy or sell at.
To get started, simply search online for the brokerage platform you want to use or download the app from your app store. Next you fill out basic information like your name, email, etc., and then you need to connect your bank account to the platform. Doing this is how you deposit money onto the platform and cash out back into your bank account. You can then deposit however much money you want to invest onto the platform, and then you’re ready to start investing!
Before you start buying stocks, make sure you research the companies you want to invest in. Do you like the newer online brokerages or traditional financial services companies? Leave me a comment and let me know your favorite way to invest.
Cannabis technology startups, including those that enabled home delivery, received a big boost during the pandemic as more and more Americans partook in the growing number of legal states. This has ignited investor interest in companies that provide everything from retail and e-commerce software to cultivation management tools. This week has seen some interesting large investments and acquisitions in the industry.
Dutchie is a cannabis tech company that created an app to connects customers with local cannabis retailers. Dutchie recently raised $200 million in a Series C, to value the company at $1.7 billion. Many big name investment groups were involved, including Tiger Global, Thrive Capital, and Casa Verde Capital, which is co-founded by Snoop Dogg. In addition to raising this large amount of capital, Dutchie announced the acquisitions of cannabis retail platform Greenbits and cannabis software provider LeafLogix.
Greenrose Acquisition Corp. (GNRS), a cannabis-focused special purpose acquisition company, or SPAC, has agreed to buy four U.S. cannabis companies for $210 million. Greenrose will be acquiring Shango Holdings, Futureworks, Theraplant and True Harvest. Combined, these companies run a number of dispensaries, cultivation and processing facilities across seven states. Greenrose Acquisition Corp. will change its name to the Greenrose Holding Company before completing the purchases of the four companies.
GrowGeneration (GRWG) has acquired Char Coir, producer of popular hydroponic growing materials made from coconut fiber. GrowGeneration currently has 50 stores across the U.S. and sells growing supplies and nutrients for both individual and commercial cannabis growers. This acquisition is expected to generate an additional $15 million in sales this year.
Dutchie is currently privately held but I am going to be keeping an eye on this company going public. Greenrose Acquisition Corp. (GNRS) and GrowGeneration (GRWG) are currently being traded on the NASDAQ, although Greenrose is planning to move from the NASDAQ to the OTCQX Best Market. What do you think about these companies? Leave me a like and drop a comment with your thoughts about investing in the cannabis industry.
British American Tobacco (BTI) has become a big player in the cannabis industry with a 20% acquisition of Canadian company OrganiGram (OGI). This deal cost British American Tobacco $220 million Canadian dollars, or about $176.6 million American, to purchase 58 million shares of OrganiGram. British American Tobacco is one of the largest tobacco companies, with a portfolio of brands including: Camel, Newport, Kool, Lucky Strike, and Pall Mall. BTI also produces Vuse vaporizers as well as a number of smokeless tobacco brands.
Experts say this deal is less about the Canadian market and more about laying the groundwork to capitalize on the growing global marketplace for cannabinoid-based products and delivery systems. This partnership is a strategic collaboration with a focus on research and product development. News of this partnership have caused both BTI and OGI stock prices to surge in the past couple days.
Other news causing some buzz in the cannabis industry came Thursday morning when Mexico’s Chamber of Deputies passed landmark legislation to legalize recreational sales in the country. The Mexican Senate is expected to back the bill in the coming days. Mexican President Andres Manuel Lopez Obrador’s party strongly backs the proposal and he is expected to sign the bill after the Senate passes it. Legalizing cannabis in Mexico would make it the largest country to do so, with it’s population of almost 130 million people.
Mexico would dwarf the Canadian (pop. 37.6 million) and Uruguay (3.4 million) markets, and put the U.S. sandwiched in between two fully legalized countries. This will put added pressure on the U.S. to federally legalize cannabis. Like I mentioned in my previous blog regarding cannabis, 15 U.S. states and 3 U.S. territories including Washington D.C. have already legalized adult recreational use, now our neighboring countries to the North and South are legal.
The big question is when will the U.S. end it’s federal prohibition on cannabis and allow the flood gates of tax revenue to open. Large corporations are waiting on the sidelines ready to take action. I personally think this industry is a great investment opportunity because it is so new with so much room to grow, I equate this to investing in the internet back in the 90s. What are your thoughts? Leave me a comment and let me know what you think about the cannabis industry as an investment opportunity.
First, off you might ask yourself what exactly is an IPO? IPO stands for initial public offering and it is when a private company first starts letting the public buy and sell shares of the company on the stock market. An initial price along with number of shares is established in an underwriting process that puts a valuation on the company. The IPO process involves companies meeting requirements set by the exchanges and the Securities and Exchange Commission (SEC). An IPO is often a great time to buy into a company before the stock prices surge. So, what are some good recent IPOs to keep an eye on?
The dating app Bumble (BMBL) issued their IPO a month ago in February and it has already caused a lot of buzz. On February 11th, before it dropped its IPO, it’s shares were priced at $43 apiece, above its target range of $37 to $39. It immediately began selling almost 77% above that for a price of $76. Bumble’s stock price has fluctuated over the past month of trading and it is currently trading around $69.76 per share. Overall, I think there is a lot of demand in this market and a lot of room for growth. Their CEO has talked about plans to monetize their friendship side of the app, Bumble BFF, next year in 2022.
The online gaming platform Roblox (RBLX) issued their IPO this past Wednesday, 3/10/21, with a suggested price point of $45. Wednesday, on its first day of trading, Roblox stock prices went up more than 54%, closing at $69.50. The stock climbed another 6.3% on Thursday, closing at $73.90. The Roblox IPO is a little different because it is a direct listing or direct public offering, meaning no new shares of the company were created. Instead only existing, outstanding shares are sold, which means the shares aren’t diluted by creating additional shares for the public.
Another IPO I’m keeping my eye on is Coupang (CPNG), which has been called the Amazon of South Korea. It just had it’s IPO release today, 3/11/21, with a suggested price of $35. When trading began this morning it opened with shares selling at $63.50, but the excitement calmed throughout the day and the price closed at $49.25. But in after hours trading it’s been on the rise and is priced around $52.35. There is definitely a lot of potential in this company, especially being an early investor.
IPOs can be great opportunities to buy in early, but as always the price could also drop. What do you think about Bumble (BMBL), Roblox (RBLX), and Coupang (CPNG)? Leave me a comment and let me know if you think these are good investments or a waste of money.
It’s been a rough week and an even rougher month for a lot of companies on the stock market. Like I discussed in my previous blog, “Are We About to Have a New Crash in the Stock Market?“, fears about rising interest rates and inflation have caused a lot of volatility on the stock exchange. These fears have been further complicated with rising interest rates in the bonds market and 10-year yields topping 1.54%. This is the highest level since the Covid-19 pandemic began.
Once again, Federal Reserve Chairman Jerome Powell addressed these concerns. At the Wall Street Journal Jobs Summit, he acknowledged that he expects the economic reopening to cause some temporary inflation but that it would not be enough to make the central bank raise interest rates. While Mr. Powell continues to try and ease investors minds, investors are having a “crisis of confidence” with Powell and the Federal Reserve. Investors fear that the Fed is misjudging the speed at which the economy is moving and they are underestimating the level of inflation and the impact that it will cause.
These uncertainties in the financial world have caused a lot of volatility on the stock exchange, with the tech sector being the hardest hit. For example, Tesla stock prices went from highs around $875 just a month or two ago to dropping below $600 as of recently. Apple’s stock price went from a high of $144 about a month ago down to around $120 today, which in another example of the tech sector’s drop. Many argue that the tech sector experienced excessive rapid growth over the past 4 months and this is the market correcting itself. What are your thoughts? Leave me a comment on whether you think this is the start of a market crash, especially in the tech sector OR is this just a great opportunity to buy the dip?
Just a few years ago, you would have never found these two words in the same sentence let alone be the topic of conversation amongst investors, but a lot has changed ever since Colorado and Washington went rogue and legalized cannabis at the end of 2012. Since then, the total number of states that have legalized the plant for adult recreational use has jumped up to 15 states plus three territories including Washington D.C. This week the governor of Virginia is expected to sign the bill to legalize adult recreational use in his state and will make it the 16th state to do so. Twelve other states currently have recreational legalization measure on the table also. Beyond that, it is legal in 36 US states for medical purposes.
Our neighbor to the north, Canada, legalized cannabis in 2018 and many in the US think that the federal government is currently not far behind them, especially considering the number of states that have already legalized it. With the legalization of cannabis, the opportunities for companies to grow in this industry has exploded. Another major milestone happened in 2018, the cannabis company Cronos Group became the first in the industry to receive SEC approval and be traded on the US stock exchange. Since then, many new companies have emerged onto the market and this is proving to be a highly competitive industry.
News that is fueling this fire is that last month, the Senate Majority Leader Chuck Schumer pledged that he, Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) would release a draft bill to end federal marijuana prohibition “in the early part of this year.” More recently, this past Friday Senate Majority Leader Chuck Schumer sent out a fundraising email to supporters where he discussed Democrat’s agenda for change this year, where he reiterated the fact, “It’s time to decriminalize marijuana nationally.” All this talk of federal legalization has the industry waiting in anticipation. Although companies are already being traded on the stock market, full federal legalization would not only open the flood gates of potential customers but it would also give everyone the green light to go 100% in building operations across the country.
Some of the companies leading the way in the new legal cannabis market are Canopy Growth, Tilray, and Aurora Cannabis. These are three of the biggest names in the industry but like I mentioned earlier, this is a blossoming industry with a lot of competition vying for space. Leave me a comment on what are your thoughts on investing in cannabis? Is it a good idea to invest now or wait until full legalization? Will it be too late to invest then?