Should The Omicron Variant Be A Concern For Investors?

While Americans were celebrating the Thanksgiving Holiday, the rest of the world dealt with the newest Covid-19 variant. The Omicron variant of coronavirus, first identified in South Africa, has been reportedly spreading in parts of Europe for days before it was identified in southern Africa.

On December 1st, the first confirmed US case of Omicron coronavirus variant was detected in California. In a White House news briefing, Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said the case was in an individual who traveled from South Africa on November 22 and tested positive for Covid-19 on November 29.

As of the end of November, the variant was already found in 20 countries, and governments around the world were already implementing lockdowns and travel restrictions.

These decisions where being driven by the fact that the Omicron variant was substantially different. With about 50 mutations from the original coronavirus, which started the pandemic, and about 30 mutations compared to even the highly contagious delta variant that has swept around the world. However, scientists don't know if the variant is actually more contagious or more deadly than any previous variants.

Many have been calling this an overaction, while others say the lockdowns and travel restrictions are adequate steps to protect others. Regardless these are difficult decisions for the politicians, and there will inevitably be those talking heads on the T.V. bashing the leaders regardless of their decisions. Part of this circus helps build fear and anxiety in most people, leading to fear and anxiety within the stock market.

The worst single day for the U.S. stock market in 2021 was Friday, November 25, the day following Thanksgiving, a shortened trading day, and of course, the day after the world found out about the new Omicron variant. The following few trading days were similarly volatile, with the market bouncing higher and then lower, despite any new real tangible information about the true nature and danger of the Omicron variant being known.

So, should this new variant be a real concern to investors? Continue reading "Should The Omicron Variant Be A Concern For Investors?"

Are You Concerned About Inflation?

Twitter and Square CEO Jack Dorsey is the most vocal and alarming figure in the finance world who is not just raising the alarms on the potential coming inflation issues but is banging bells and yelling from the towers about the possible coming problem.

Dorsey said in a tweet, "Hyperinflation is going to change everything. It's happening." When replying to another tweet about inflation, he went further to say, "It will happen in the U.S. soon, and so the world."

While there have been other big-name investors, bank c-suite members, Federal Reserve members, and even the Treasury Secretary indicate that inflation will happen. Some have even said it is a little higher than what they expected. However, not many have said Hyperinflation was coming and would happen soon in the U.S. and then the world.

While some have and will continue to dismiss Dorsey's claims, we all need to remember that he is the CEO of Square, the payment company. So theoretically, Dorsey has access to information that others may not have, which could give him a better insight into how fast prices are increasing and what products are seeing big increases, which would undoubtedly help guide the thinking that higher than expected inflation is on its way. (Just a thought). Continue reading "Are You Concerned About Inflation?"

ETF Investors Should Know Their Tesla Exposure

Shares of the electric car manufacturer Tesla (TSLA) have undergone a meteoritical rise over the past few years, a move that very few investors have ever seen or experienced. Since late October 2019, Tesla has been up more than 1,680%, compared to the Vanguard S&P 500 ETF (VOO), which is up just 59% over the same timeframe. The move Tesla has made is nothing but incredible, and congratulations to all those investors who had the foresight and fortune to have owned Tesla stock, either directly or through, and some sort of fund and have benefited from the move.

However, as with all investments, what goes up, can come down. And Tesla has undoubtedly seen this story play out over time as a publicly-traded company. Several times throughout its time, including this week, it has seen massive pullbacks and corrections, of course only to go even higher longer term. But that doesn't mean another move lower, like the 36% drop during a six-week period earlier in 2021, should be dismissed by investors.

Both long and short-term focused investors need to understand that stocks of even the best companies move higher and then lower, only to move higher again. And understanding this movement and knowing what the risk of an investment is and the potential return an investment has, is extremely important can help you invest smarter. Continue reading "ETF Investors Should Know Their Tesla Exposure"

Bitcoin ETFs Aren't Going To Produce Same Returns As Bitcoin

Bitcoin and other cryptocurrencies have once again hit new all-time highs over the past few weeks; many believe this was largely due to the hype surrounding the inception of the first Bitcoin Exchange Traded Funds in the United States.

The hype around the Bitcoin ETFs, like the ProShares Bitcoin Strategy ETF (BITO), was largely due to the idea that now the average investor or fund manager can easily garner access to Bitcoin through their standard investment platforms. The ETF would allow them to invest in Bitcoin without relying on the Coinbase's of the world or setting up a digital wallet and transferring funds into those accounts. It may sound like a small thing, but most investors prefer all their investments in one clean place.

The Grayscale Bitcoin Trust (GBTC), which many considered the first fund that gave the average investor access to Bitcoin in an easily tradable way and is a fund that actually holds bitcoins. BITO and the other newer Bitcoin ETFs, hold ‘futures’ contracts on Bitcoin, not the actual asset itself and this causes some issues with these new ETFs accurately tracking the price movements of Bitcoin. That is not to say that BGTC tracks Bitcoin price movements perfectly either, but it doesn’t have to deal with the same issues the newer ETFs will be facing. *(see footnote)

This type of investing is different from actually holding the asset itself because, in order to gain exposure to the asset through futures contracts, you spend more money to gain that exposure. Plus, you spend it each and every month when you'll roll' from one month's futures contracts into the next. Continue reading "Bitcoin ETFs Aren't Going To Produce Same Returns As Bitcoin"

Truly Out Of This World Investing: Space ETFs

In the 1960s, the so-called 'Space Race' was between the United States and Russia. Today we are once again in the midst of another space race. However, this time around, it's not two superpower countries battling it out; it's businessmen. In the 60's the battle for space was in most ways geared around bragging rights, military power, and nationalism. Today, it still is in many ways about bragging rights and as a way to make money. And let's be honest, the billionaires shouldn't be the only ones getting weather from this battle.

To many people, the current battle for space is still seen as a lot of science fiction. But, what a lot of these companies are doing today, could pave the way for the next generation's technological advancements. So, what is taking place just outside our atmosphere is really going to change the way we live, not in 20 or 30 years from now, but just a few years from now.

For example, Elon Musk's SpaceX company offers satellite internet service through its "Starlink" program. The Starlink program is an internet provider that uses satellites floating around Earth to make an internet connection. This is very similar to satellite radio from SiriusXM or satellite TV service through someone like DISH Network. At the time, Starlink is not a huge success, but some predict that it will become more and more popular in the coming years due to the worldwide availability of the internet that Starlink offers. Continue reading "Truly Out Of This World Investing: Space ETFs"