The broader markets witnessed a correction in Oct. 2018. The S&P 500 [SPY] ETF dropped close to 8% last month. The tech sector led the sell-off as investors were worried that companies were overvalued.
Investors are now paying attention to fundamentals in an uncertain macro environment driven by rising interest rates and the trade wars between China and the United States. Amazon and Netflix have been pummeled as Wall Street would like profits to improve in line with revenue expansion. The short sellers, though, had a ball.
According to the head investor at U.S. Global Investors, Michael Matousek, “After Amazon’s report, people started asking why they should pay 90 times earnings for 30% growth. They just started selling and selling, and that caused the stock to break under key levels that had been holding and keeping people interested.”
Have FAANGs bottomed out?
The FAANG stocks collectively gained $110B on Oct.31, their best performance in over 3 years. Netflix and Amazon led gains and rose 6.4% and 4.3% respectively. The future earnings and quarterly results remain critical for these stocks going forward.
Amazon faced the wrath of investors as it missed revenue forecasts while Facebook recovered on better than estimated earnings. Apple will be banking on its new devices and services business to drive revenue growth and Netflix on international expansion.
It is difficult to gauge if FAANGs have indeed bottomed out and will move to all-time highs over the next year. Or it may very well be that the party is over? There are too many uncertainties impacting the markets now.
Analysts though are still bullish on FAANGs. They have a 12-month target price of $239.75 for Apple, implying an upside potential of 9.5%. Similarly, shares of Facebook, Amazon, Netflix, and Google are trading 30%, 34%, 32% and 24% respectively below their target price estimates.
Video: Compound Interest, Explained
3 Ways To Invest From Your Smartphone For Under $5
The numbers say 80% of millennials don’t invest in stocks.
Reason? Half say they don’t have money, one-third says it’s too early and another third says they don’t know how.
In addition to that, there’s demographic gap. “The average age of a financial advisor is 55,” said Douglas Boneparth, a New York City-based financial planner. “There are more financial advisors over the age of 70 than there are under 30.”
Despite these beliefs, you don’t really need much money, nor experience, to get started. (Just look at our fearless co-founder Odunayo Eweniyi and what she’s pulled off here)
Be that as it may, here are three ways to get started for $5 or less.
What: A micro-investment app (iOS and Android) with over 30 ETFs according to industry, sector and risk tolerance.
How it works: Download the app and choose your investment.
Minimum investment: $5
Cost: Fees range from $1 a month for accounts under $5,000 to 0.25% a year.
“We help people who don’t have a lot save money on a weekly basis,” CEO and co-founder Brandon Krieg said in one interview. “Stashers look like America, they look like people you meet every day: they are nurses and teachers and Uber and Lyft drivers.”
What: iOS and Android app.
How it works: Download the app and choose one of six index funds. When you buy, say a cup of coffee for $1.75, it rounds up the change to $2 and deposits the difference.
Minimum investment: $5
Cost: Just like Stash, fees range from $1 a month for accounts under $5,000 to 0.25% a year.
“We’re not trying to preach austerity to the client, because that’s a bummer,” CMO Manning Field says. “Some people will say, ‘Don’t have the cup of coffee.’ We’ll tell you to have the cup of coffee and invest along the way.”
What: A commission-free investment app (iOS and Android).
How it works: Download and start buying stocks.
Minimum investment: Whatever stock you want to buy.
And by the way, if you want to get a fast start on real estate, here’s Forbes’ list of nine REITs with yields between 8% and 10%.
CHART: How Blockchain Powers Bitcoin
Blockchain, Bitcoin. Bitcoin, blockchain.
The two terms go hand in hand—and have become almost ubiquitous with this year’s insane rise (and fall) of Bitcoin.
But what does it all really mean? How does it come together? In this week’s chart, our friends at CB Insights break down exactly how blockchain powers Bitcoin.