Monthly Archives: October 2017

ETF

3 Exploding ETF Trends (and 33 Funds You Can Buy Now)

If you’re like most folks, you probably think it’s tough for any fund to beat the S&P 500, especially in a year when the index jumped some 15%.

But you’d be wrong.

Truth is a lot of funds are doing better, with over 660 beating the S&P 500. And the top-performers share 3 common themes that could tell us a lot about which sectors are poised to take off next year.

Let’s dig in. Along the way, we’ll hone in on the 33 funds that are cashing in as these breakthrough trends head higher.

Trend No. 1: Skyrocketing Faith in Technology (11 Funds)

Markets have always believed that technology will improve the global economy. But every once in a while investors get too excited and see value in all the wrong places.

A classic example? The boom and bust of dot-com IPOs in the late 1990s. The market was right about the Internet changing the world, but it failed to pick the winners and losers.

So we shouldn’t treat the market’s latest bets as gospel. But the trend is clear: bitcoin, hardware and biotech are the real game changers now.

That’s why the Bitcoin Investment Trust (GBTC) is by far the biggest winner of 2017, with 477.5% gains so far. That’s way ahead of the other winning tech ETFs, though many have clocked impressive returns, too:

If you missed the bitcoin wave but still put your money in tech ETFs, you did very well as long as you chose the ARK Innovation ETF (ARKK), ARK Web x.0 ETF (ARKW), Global X Lithium & Battery Tech ETF (LIT), ARK Genomic Revolution Multi-Sector ETF (ARKG), Global X Robotics & Artificial Intelligence ETF (BOTZ), Virtus LifeScience Biotech Clinical Trials ETF (BBC), MG Video Game Tech ETF (GAMR), ARK Industrial Innovation ETF (ARKQ), Global X Social Media ETF (SOCL) and SPDR S&P Biotech ETF (XBI).

These funds are all over the place, betting on social media, biotech, battery technology, genomic research and video games. What they have in common is a belief that many technological revolutions are starting now—and there are identifiable companies that will profit.

Trend No. 2:  Greenback Slump Spurs Emerging Markets (19 Funds)

It’s no secret that the US dollar has had better times. After a bull run through 2015 and 2016, the greenback has given up a lot of those gains to emerging market currencies, the euro and even the post-Brexit pound. If you bet on a stronger dollar through, say, the PowerShares DB US Dollar Bullish ETF (UUP), you probably aren’t happy:

Dollar Droops, UUP Dives

On Wall Street, a lot of analysts and traders made the mistake of betting on a dollar recovery in the middle of the summer. Boy, were they wrong! And while that’s not good for Americans looking to vacation abroad, it’s been great in other parts of the globe, particularly emerging markets and Asia.

So great, in fact, that many China- and emerging market–focused ETFs are up over 50% and a few are close to that mark. This emerging-market strength has also benefited Germany, whose euro currency is getting stronger; the country also sells lots of technology to China.

A ton of winners here, so let’s list them:

Columbia India Small Cap ETF (SCIN)
EMQQ Emerging Markets Internet & Ecommerce ETF (EMQQ)
First Trust China AlphaDEX ETF (FCA)
Global X China Consumer ETF (CHIQ)
Global X China Materials ETF (CHIM)
Guggenheim China Real Estate ETF (TAO)
Guggenheim China Technology ETF (CQQQ)
iShares MSCI Austria Capped ETF (EWO)
iShares MSCI Brazil Small-Cap ETF (EWZS)
iShares MSCI China ETF (MCHI)
iShares MSCI Germany Small-Cap ETF (EWGS)
iShares MSCI India Small-Cap ETF (SMIN)
iShares MSCI Poland Capped ETF (EPOL)
KraneShares CSI China Internet ETF (KWEB)
PowerShares Golden Dragon China ETF (PGJ)
SPDR S&P China ETF (GXC)
VanEck Vectors Brazil Small-Cap ETF (BRF)
VanEck Vectors India Small-Cap ETF (SCIF)
WisdomTree China Ex-State-Owned Enterprise ETF (CXSE)

There have been so many foreign-ETF winners that it’s been tough to pick a loser! All you had to do was see that the dollar’s recent gains couldn’t last after an unprecedented run.

Trend No. 3: Fear Is Disappearing (3 Funds)

The third big trend is, paradoxically, the one that has scared a lot of people. And that’s because a lot of people aren’t scared.

Confused?

It’s an old belief that’s the cornerstone of contrarian investing. The idea is simple: bubbles form when everyone gets greedy, no one is fearful, and asset prices get too pricey. The market has definitely moved away from fear. No evidence of that is clearer than the VIX.

The what?

The VIX, or the CBOE Volatility Index, is a measure of S&P 500 price fluctuations. A higher number represents more uncertainty—that is, more fear. A lower number represents more confidence that a crash is unlikely.

The VIX is currently at 9.95, far from 13.75 a year ago, really far from its long-term average of 18.7 and even further from its all-time high of 67, in the midst of the financial crisis.

The VIX: A Picture of Tranquility

While a lot of pundits have spent 2017 warning that the VIX is due to rise “any day now,” anyone betting that the opposite would happen has made out like a bandit. Just behind bitcoin, the best performing ETFs of 2017 have been short volatility:

Michael Foster has just uncovered 4 funds that tick off ALL his boxes for the perfect investment: a 7.4% average payout, steady dividend growth and 20%+ price upside. — but that won’t last long! Grab a piece of the action now, before the market comes to its senses. CLICK HERE and he’ll tell you all about his top 4 high-yield picks.

Source: Contrarian Outlook 

Energy

Buy These 3 High-Yield Stocks for the Coming Rebound in Energy

The energy infrastructure sector has continued to decline, even as the price of crude oil has climbed and stabilized. This sector is populated by the publicly traded master limited partnerships (MLPs) and corporations that for the most part function like their MLP brethren. Over the last three months, crude oil is up about 5%, yield the Alerian MLP Infrastructure Index (AMZI) has dropped by over 10%. If you like to invest in turn around candidates, there are strong signs that MLPs and related companies will start to turn higher in November.

Underlying energy infrastructure fundamentals look stable and expectations are that most MLPs have businesses continue to grow. In the second quarter, two-thirds of the AMZI component companies increased distributions, with the remainder keeping payouts level. For the third quarter, a pair of distribution cuts have been announced. These reductions are strategic versus signs of desperation. My forecast is that the majority of MLPs will announce distribution increases.

A further sign that fortunes in the MLP space are improving is that bond prices have risen even as equity values declined. This interesting piece of analysis comes from Yorkville Capital:

“Year-to-date, the Alerian MLP Index has declined by 5.6%, including distributions this year. Meanwhile, Yorkville’s index of MLP and midstream debt has produced a positive total return of 5.8%. This means that either the equity markets are getting it wrong and the bond markets are getting it right – or the other way around.

Bond investors primary concern is that the underlying business is healthy and stable enough to ensure that they will continue to receive their semi-annual, or quarterly, coupon payments (and principal upon maturity). Therefore, the increasing prices of MLP bonds suggest that MLP businesses are getting less risky and more stable – not the other way around.

On September 27, 2017, Moody’s upgraded their global midstream outlook to “positive” from “neutral” reversing the downgrade they appropriately made in late 2015. Their report highlighted expectations for business fundamentals to improve over the coming 12-18 months and noted that upstream activity out of the E&P industry has ramped with rig counts having doubled off the 2016 lows. Moody’s’ expects midstream EBITDA growth of 8-10% in 2018.”

The final puzzle piece of the puzzle for an MLP sector recovery is the possibility that the most recent value drop was due to tax selling. An MLP focused mutual fund, ETF or closed-end fund operates as a taxable corporation, so taking tax losses now can be used to offset future gains and lower future corporate income tax payments. The fiscal year for these funds ends on October 31. If tax selling is part of the cause of the recent down turn in MLP values, we can expect some price support in November.

Earnings season has just started for the energy infrastructure sector and results so far have been positive. If more MLPs and infrastructure corporations report strong third quarter results, the sector could really take off starting in November. Here are three companies with currently attractive dividend yields and the potential for much higher share or unit values.

Targa Resources Corp (NYSE: TRGP) engages in the following energy midstream services:

  • Gathering, compressing, treating, processing, and selling natural gas.
  • Storing, fractionating, treating, transporting, and selling NGLs and NGL products, including services to LPG exporters.
  • Gathering, storing, and terminalling crude oil.
  • Storing, terminalling, and selling refined petroleum products.

In February 2016, to simplify the business structure Targa Resources Corp. acquired all the outstanding common units of Targa Resources Partners LP (NYSE: NGLS) that it did not already own. The company continues to operate using the MLP model, but is a corporation. At the current $41 per share TRGP yields 9.0%. This stock could easily go over $50 in an MLP rally.

Enterprise Products Partners LP (NYSE: EPD) has a market cap more than $50 billion and is the largest MLP by enterprise value. The company’s business segments include:

  • NGL pipelines and services
  • Crude oil pipelines and services
  • Natural gas pipelines and services
  • Petrochemical and refined products services.

EPD has increased its distribution for 62 straight quarters. Unlike most MLPs, Enterprise Products Partners can fund most of its growth projects without issuing additional equity. This $24 MLP could quickly move to over $30. EPD yields 6.9%.

Valero Energy Partners LP (NYSE: VLP) is controlled by and provides pipeline, storage and terminal services to its sponsor, Valero Energy Corporation (NYSE: VLO). Through asset drops from Valero, the cash flow and distribution growth at VLP is very predictable. The VLP payments to investors will grow 25% in 2017 and at least by 20% in 2018, with high probability for 20% growth in future years. Now at $41, VLP could easily surpass its 52-week high of $51. The units currently yield 4.7%.

Owning a bit of the MLP sector should constitute a core part of any serious high-yield investor’s portfolio. And with the way trends appear for MLPs investors in those stocks will not only continue earning a steady stream of income but could very well enjoy considerable share price appreciation. It’s this type of strategy that I use with my new income system called The Monthly Dividend Paycheck Calendar.

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Source: Investors Alley

Technology

Amazon Could Jump 50% … and You Could Make 500%

Amazon.com Inc. (Nasdaq: AMZN) isn’t a regular company. It’s a tech company. But it’s run by Jeff Bezos, a financial engineer.

Prior to founding Amazon, Bezos worked on internet-enabled business opportunities at the hedge fund company D.E. Shaw & Co. This was when the internet was brand-new. He left D.E. Shaw in 1994 to start his own internet-enabled business.

Bezos saw the opportunity for technology to disrupt retail. But he also saw the financial opportunity from a 1992 Supreme Court ruling that exempted mail-order companies from collecting state sales taxes unless they operate a physical location in the state.

It’s the marriage of an investment banker’s mind with technology that makes Amazon unique. It’s also what indicates Amazon stock could increase by 50%.

The chart below shows how an investment banker would value Amazon. Price is the blue line.

It’s the marriage of an investment banker’s mind with technology that makes Amazon unique. It’s also what indicates Amazon stock could increase by 50%.

In the chart, the green area shows the total enterprise value (TEV) to earnings before interest, taxes, depreciation and amortization (EBITDA) ratio. This ratio is about 12% below its 10-year average. It’s 40% below its high.

TEV/EBITDA is how an investment banker values a company. TEV is the price to buy the whole company, considering any bonds that are outstanding and other ownership stakes. EBITDA is a rough measure of the cash an owner of a company allocates.

Bezos knows he wants to allocate cash flow to maximize TEV. He’s the perfect guy to run Amazon. He evaluates opportunities based on cash flow rather than technology.

Ratios like TEV/EBITDA are mean-reverting. That means they move above and below average.

Right now, the ratio is well below average. I expect it to move to an above-average level. That indicates Amazon could rally 50% from its current price.

Using call options could magnify the gains, leading to gains of 500% or more. My Precision Profits readers understand how even small moves in stocks can lead to large returns. They enjoyed a gain of more than 400% in Microsoft Corp. (Nasdaq: MSFT) in less than a week after the stock gained 7%.

Regards,

Michael Carr, CMT
Editor, Peak Velocity Trader

In this exciting NEW VIDEO, Wall Street legend and former multibillion hedge fund manager Paul Mampilly pulls back the curtain on the biggest investment opportunity in the market today. What insiders are calling “The Greatest Innovation in History,” this revolution will mint more millionaires and billions than any technology that came before it. Right now, the current market for this technology is just $235 billion, but given how fast this technology is moving experts predict it will soar to $19 trillion by 2020. But 8,000% growth is just the beginning—and now’s your chance to get in on the action. [CONTINUE TO VIDEO]

Source: Banyan Hill

Bear

This Indicator Could Signal a Top

Stress. To us, it is measured by our pulse. Our economy, however, isn’t as easily tracked.

That’s why the St. Louis Federal Reserve has done its best to create a Financial Stress Index that tells the stress level of the economy.

The stress index, which is comprised of 12 weekly data indicators, is used to show when the economy is in certain stress situations — either above- or below-average stress.

Take a look:

The St. Louis Federal Reserve has done its best to create a Financial Stress Index that tells the stress level of the economy.

(Source: Federal Reserve)

The average is the zero line, so if the index is above zero, it’s above-average financial stress. Below zero, and below-average financial stress.

Right now, the index is at a reading of about -1.5, well below the zero line. In fact, it’s only been this low twice before, once in 2013 and once in 2014.

When the financial stress of the economy is higher, there’s a threat of a pullback in the stock market.

Take a look at the inverse relationship between the index and the S&P 500.

The St. Louis Federal Reserve has done its best to create a Financial Stress Index that tells the stress level of the economy.

Clearly, as the stress index (orange line) spikes higher, there’s almost always a pullback in the S&P 500 (black line).

Since we are at very low levels for the index, we know at some point financial stress will get worse.

So, what are some possible reasons for it to be worse?

Well, based on the indicators it uses, interest rates and yield spreads are the biggest factors. And President Donald Trump is eyeing John Taylor as the new Fed chair. Taylor is considered to be the most hawkish candidate on policy, meaning he is looking to raise rates at a more rapid pace than we have seen.

Trump’s decision will create moves in the interest-rate market over the next three to six months, so it could easily be the catalyst that creates a bottom in the stress index — and therefore a possible top in the stock market.

Regards,

Chad Shoop, CMT
Editor, Automatic Profits Alert

It’s not silver or platinum. It’s not aluminum, nickel or lithium, either. But this “magic” METAL is found in everything from cars to airplanes, smartphones and computers, even batteries and cosmetics. It even has the power to fight diabetes, depression, weight loss and cancer. It’s worth billions, even trillions. But here’s the problem—this metal is disappearing. The world’s reserves are quickly being sucked dry. But a group of geologists have just struck the motherlode, and the one company behind it could earn investors an absolute fortune as they solve the greatest commodity crisis in human history. [FOR MORE INFORMATION CLICK HERE]

Source: Banyan Hill

Cryptocurrency

Why Bitcoin Should Be in Your Retirement Portfolio

Dear Early Investor,

People think you should buy bitcoin because the price might go up.

But the real reason you should own bitcoin – especially in your retirement portfolio – is that it’s a bet on a monetary revolution.

Crypto assets are all about cutting out the banks, middlemen, financiers and academics who control our current monetary system.

The monetary policy of today’s world is a mess rife with conflicts of interest and bad incentives. Every country does it similarly. And government is always tempted to print money. It punishes savers and rewards borrowers.

A well-constructed cryptocurrency, on the other hand, has a hard cap on the number of “coins” in existence.

There will only ever be 21 million bitcoins. You can’t change that number. There are a little more than 15 million available today.

So if we’re looking at bitcoin as a competitor to the dollar, there’s no contest. The U.S. government, for example, borrows more than $1 million each minute… printing money like crazy all the while.

That’s why bitcoin has risen from around $0.005 in 2010 to more than $5,000 today.

Bitcoin is a call option on a future where it is mainstream money. You don’t sell for double or triple what you put in; you hold on and hope it keeps going up. Less than 1% of people own bitcoin today, and if it becomes mainstream money, today’s bitcoin owners may be tomorrow’s new 1% of earners.

But it’s not just bitcoin anymore. There are hundreds of interesting cryptocurrencies out there – all competing against each other, sharing code and breaking new ground.

Here’s what’s really revolutionary about it…

All these “coins” or “tokens” (digital assets) have their own funding mechanism – the initial coin offering, or ICO – in which well-run projects raise tens of millions of dollars each week… hundreds of millions in many weeks, actually.

So they don’t need the stock market or venture capitalists. Crypto is its own funding source.

These crypto projects are trying to do big things like overthrow large incumbent financial institutions, software companies and (in some ways) governments – or at least loosen their monopoly on money.

After all, there’s no good reason a government should have a monopoly on legal tender. Libertarians like Ron Paul have long been calling for “currency competition.” We shouldn’t be forced to use dollars that erode in value.

The stakes are high.

Crypto has the potential to be a better form of money, compared to the current (barbaric) methods employed by most governments.

So that’s why you would want to own at least a little bitcoin in your retirement account. Capital gains taxes can be major there. Because if the crazy revolution happens, you’ll do very, very well, as long as you buy before half of the country gets in.

If it becomes popular as a way to store value for even 10% of the population, that’s more than enough to take it to at least $100,000 per coin by my rough estimates. It’s hard to say exactly, but demand is high and rising fast.

Each bitcoin is divisible into 100 million pieces. Each piece is one “satoshi.”

If bitcoin continues to rise in value, we may start thinking about prices in satoshis, not bitcoins. Bitcoins will be for very large purchases, and satoshis will be for everything else.

This is already happening in the crypto community. When we buy other cryptocurrencies, we usually buy them with bitcoin. It’s easier to think about thousands of satoshis than it is to think about tiny fractions of a bitcoin.

You don’t need to buy a whole bitcoin. Start small, and it could still turn into a great deal of money one day.

If you’re looking to do it in a retirement account, the most well-known player in the space is fittingly called Bitcoin IRA. The company takes a 15% upfront fee, but the tax savings down the road could be tremendous if bitcoin goes mainstream.

If you’re intrigued by bitcoin and the idea of investing in smaller (new) cryptocurrencies, watch my new presentation and join First Stage Investor. It includes my top four coins, all of which are brimming with potential.

Good investing,

Adam Sharp
Co-Founder, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​



Source: Early Investing

Bear

Wall Street’s Glory Days Are Numbered

“Welcome to Wall Street,” said the investment banker.

The year was 1989, and my college’s financial club had organized a trip to the New York Stock Exchange.

Our guide led us to the floor of the exchange because, back then, that’s where all the action took place.

Orders came flying in by phone, and some people even had portable devices to keep track of their stocks on the go.

As the open got closer, the noise rose to where you could barely hear the person standing next to you. But that was nothing compared to when the minute hand of the clock struck 9:30.

The minute we heard the “ding, ding, ding” of the opening bell, it was pure pandemonium.

Today, the floor is a little less exuberant, being mostly there for show now that a good portion of today’s trading takes place via computers.

But even though Wall Street’s essence has remained the same since it began in 1792, I believe its glory days are numbered.

See, Wall Street still has a monopoly on one essential part of trading … but in time, the internet is going to wipe out this current advantage.

Cutting Out the Middleman

Right now, Wall Street is made up by an army of middlemen.

These are your investment bankers, securities exchanges (like the New York Stock Exchange and the Nasdaq), corporate lawyers, analysts, consulting companies, auditors, accounting firms, rating agencies and all-around paper pushers.

These entities exist for one main purpose: to help sell equity or stock to the public. So if you want in on the action, you have to go through this vast network.

And for this monopoly, you pay a heavy price.

According to PwC, an elite consulting company, investment banks charge a 5% to 7% fee to do an IPO, or initial public offering. This is the first time that a company’s stock is offered for sale to the public.

That means if your company’s IPO is worth $1 billion, investment bankers net as much as $70 million in fees.

However, that’s just the beginning…

Exorbitant Fees Cannibalize IPOs

According to a survey of registrations filed by the Securities and Exchange Commission — an arm of the government that regulates stocks — the average cost of these middlemen’s fees amounts to $3.7 million.

While that may sound like a lot of money to you, I actually believe that this average is way too low.

Bottom line: It costs way too much to become a publicly traded company today.

The best evidence of this is the lack of IPOs. After peaking in 1999 with 486 companies going public, IPOs have since crashed.

In 2008, just 31 companies became publicly traded.

And 2016 marked the lowest number of companies going public in nearly a decade, with only 105 IPOs.

Wall Street still has a monopoly on one essential part of trading … but in time, the internet is going to wipe out this current advantage.

A Better Way to Go Public

It’s clear that more companies are choosing to stay private longer.

But now, these companies will have a new way to get their shares and stock to people wanting a slice of the pie.

This new process is called an ICO/ITO, or initial coin/token offering, which is being popularized by cryptocurrencies.

Basically, this is the process of digitizing an asset to make it publically traded via the internet. And if used to sell stocks, this process has been shown to dramatically reduce costs.

According to one Quora user, an ICO can be done for as little as $100. On the high end of the spectrum, an expensive ICO might cost $300,000, said a lawyer on the same site.

That’s still peanuts compared to the $70 million an investment bank will charge your $1 billion company. Or the lowball $3.7 million estimated fees you’d pay an army of middlemen to do an IPO.

Now, to my knowledge, no one has gone this route yet. But the dramatic cost reduction in doing an ICO/ITO offering vs. an IPO means it’s only a matter of time before someone tries this method out.

And once a successful model has been built, it’ll be curtains for Wall Street’s current IPO business.

That’s one of the reasons I’m staying away from traditional Wall Street companies in my services.

Instead, I’m looking for companies that are going to benefit from the new school of finance — be it through ICO/ITOs, mobile payments or even the implementation of blockchain technology.

These trends are the future of investing, and they’re what I research in my flagship Profits Unlimited newsletter. So, if you too want to explore the cutting-edge areas of finance — before other people even hear about them — I encourage you to read up on my service.

Regards,

Paul Mampilly
Editor, Profits Unlimited

In this exciting NEW VIDEO, Wall Street legend and former multibillion hedge fund manager Paul Mampilly pulls back the curtain on the biggest investment opportunity in the market today. What insiders are calling “The Greatest Innovation in History,” this revolution will mint more millionaires and billions than any technology that came before it. Right now, the current market for this technology is just $235 billion, but given how fast this technology is moving experts predict it will soar to $19 trillion by 2020. But 8,000% growth is just the beginning—and now’s your chance to get in on the action. [CONTINUE TO VIDEO]

Source: Banyan Hill

Uncategorized

Less Than 10% of Millennials Would Keep Paying Back Student Loans: Here’s Why

How’s this for a business proposition? I owe you $17,000. If you forgive my debt, I won’t use Uber or Lyft for my transportation needs. Or, how about I agree to give up texting and mobile messaging for a year in exchange for debt forgiveness? Doubt I’d get any takers.

I received an email about a recent survey,“Survey Reveals What Millennials Would Rather Deal With Than Paying Student Loans”. The sender suggested, “The insights would be a great fit with your audience.”

They questioned 500 millennials, age 18-34. At first, I thought it was a joke:

“We’ve … compiled some key findings:

  • A staggering 49.8% of all respondents said they would give up their right to vote in the next two presidential elections in order to have their debt forgiven
  • Ride-sharing services like Uber or Lyft don’t seem to matter to millennials quite as much… According to the results, 43.6% were willing to give up these services forever in exchange for debt forgiveness
  • Interestingly, 42.4% of respondents would also give up traveling outside of the country for 5 years, while only 27.0% said they would be willing to move in with their parents for 5 years
  • Millennials seem to value texting more than the other options – only 13.2% reported being willing to give up texting and any mobile messaging equivalent for the next year in exchange for having their debt forgiven
  • Only 8.2% of respondents chose to select none of the above and said they would rather keep paying off their student debt”

I asked the sender, “… My generation was faced with a choice. The rich kids went to college, the poor kids joined the military (gonna get drafted anyway) and then came out and used the GI bill to help fund their college. Were there any questions about trading military time for debt reduction? I received a polite response saying that was not part of the poll. Did it even dawn on them to ask?

The survey sponsor appears to be in the loan business, promoting refinancing student loans.

While I passed on the idea, I soon changed my mind. The survey appeared on Facebook, generating some brutal feedback. Many called respondent’s snowflakes and much worse. They felt the respondents had no clue about sacrifice and the real world.

Might part of the problem be the survey itself? If respondents were only given those silly choices, they would check the ones they felt most appropriate. Perhaps student loan debt is not that much of a problem. They are not willing to sacrifice much to make it go away.

Here’s one example. Survey says…49.8% would give up their right to vote in the next two elections to have their debt forgiven. The article also mentions less than half of the millennials voted in 2016.

What some consider sacrifices doesn’t cut it with many Americans.

OK Millennials, listen up!

When you took out a student loan, you entered into a contract, borrowing money to complete your education. You felt your education would lead to a better job and you could repay the debt from your earnings.

The government was a co-signer, guaranteeing repayment of the loan. By doing so, the banks offered YOU very low interest rates.

Today, paying off your debt is an inconvenient challenge. In my article, “Student Loans – A Multigenerational Curse” I outlined you are not alone:

“Since the 2008 recession began student loans have skyrocketed to over $1.4 trillion.

The Wall Street Journal reports, “Revised Education Department numbers shows that … at least half of students defaulted or failed to pay down debt within 7 years.” Many young people (not all graduated) owe several hundred billion dollars they have been unable or unwilling to repay.”

The survey says, “…The Federal Reserve puts the median student loan debt balance at $17,000, with monthly payments of $222.” More than half are failing to honor their contractual obligations.

Government guaranteed student loans are a deal with the devil.

With some very limited exceptions, you cannot discharge student loans in bankruptcy court. As a taxpayer, I LOVE that provision. In 2012 Marketwatchreported:

“According to government data … the federal government is withholding money from a rapidly growing number of Social Security recipients who have fallen behind on federal student loans. From January through August 6, the government reduced the size of roughly 115,000 retirees’ Social Security checks on those grounds.”

What is debt forgiveness?

Unlike bankruptcy, debt forgiveness is when a lender voluntarily agrees to allow the debtor to forego payment of the remainder of the debt. It’s a gift, plain and simple. If student debt is forgiven or defaulted, the government pays off the bank.

Unfortunately some politicos, pandering for votes, are promoting the concept, willingly giving away billions of our tax dollars.

Let’s cut to the core. Asking for debt forgiveness is asking taxpayers, your friends and neighbors, to pay for decisions YOU made for YOUR benefit.

The Student Loan Debt Clock tells us the current total is over $1.5 trillion.Reference.com says there are approximately 138 million US taxpayers. If all student loan debt were forgiven, the cost would be approximately $10,870 per taxpayer.

Its no wonder the feedback on Facebook was so negative. Taxpayers work hard and don’t want to pay off someone else’s debts.

What to do?

Student loans should be a last resort when it comes to financing an education. Students should be educated about debt and the consequences before they take out the loan.

As I outlined in my previous article, college costs should be minimized. Four-year graduation should be expected, 36% of incoming freshmen get it done! Students are making adult decisions, many times at an early age, and parents need to guide them so they don’t end up with a huge debt burden.

I checked out the Army ROTC website:

“Scholarships and stipends in Army ROTC help you focus on what’s important. Namely, getting that college degree – not how you’ll pay for it.”

A college degree and a few years as a military officer have worked well for many young people. If you are not willing to do so, that’s fine, just be responsible and honor your contractual obligations.

27% of the respondents said they would be willing to move in with their parents for student loan debt forgiveness. That’s a bass-akward solution for sure!

A recent US Census Report tells us:

“More young people today live in their parents’ home than in any other arrangement: 1 in 3 young people, or about 24 million 18-to 34-year-olds, lived in their parents’ home in 2015.

… At 24.2 million people, the population of 18- to 34-year-olds living at home is a large and diverse group. …About 81 percent are either working or going to school.”

If you are going to live at home, do it while you are going to a local junior college, saving a tremendous amount in educational cost. The goal is to transition into adulthood easily with no debt burden.

While many parents want to help their children, having them move back home after college for extended periods of time is an economic and emotional burden. Parents must move ahead and get their retirement in order.

Plan B

Based on the survey and available choices, it’s easy to conclude that student loan debt is more an inconvenience (average $222/month???) than a real burden. If debt consolidation will help reduce monthly payments, investigate the option. However $222/month is not the case for many millennials.

My granddaughter and her husband married in their senior year in college. Their combined student loan debt is significant. They both work, husband got a second job and they are responsibly working to pay off their debt and raise a family. Yes it is difficult.

Debt Forgiveness

There are ways to legally obtain some debt forgiveness. Military.com highlights many Student Loan Forgiveness and Discharge Programs. It involves more sacrifice than promising not to text. Here are some options:

“Public Service Loan Forgiveness Program

Under this program, members of the military who have been employed by the military or a qualifying public service job for the last 10 years may have their federal student loans FULLY discharged.

Public service qualifying occupations include:

** Emergency management
** Military service
** Public safety
** Law enforcement
** Public interest law services
** Early childhood education (including licensed or regulated childcare, Head Start, and state-funded pre-kindergarten)
** Public service for individuals with disabilities and the elderly
** Public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations)
** Public education
** Public library services
** School library or other school-based services

You need to be employed in these positions at least full-time, which is considered to be at least 30 hours a week or what the employer considers to be full-time.”

If you have student loan debt, sacrifice and do what it takes to get the loans paid off as quickly as you can. If you are in college, or headed in that direction, get a good education in four years with minimal student loan debt. Work your tail off so you can easily transition to your next step in life.

Decisions and behavior have consequences. Welcome to the adult world!

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Dividends

Buy These 5 High Yield Stocks to Replace Income ETFs

If you’re an investor whose goals include earning a decent income from the money you have accumulated, following the Wall Street herd will cost you money: possibly a lot of money.

The investing advice you see, read or are told may not be well aligned with your long-term goals and success. Individual investors who are counting on their portfolios for long term income needs will be best served by learning how to pick a path away from the herd.

There are two themes in play that make it difficult for investors to realize success. The first is the short term focus of the financial news industry. That group focuses on providing entertaining news bites based on data points that change every day. It is a good idea to remember that what you see or read in the financial news is much more about the entertainment part of infotainment than it is about useful information.

The second factor that effects investors are the challenges faced by financial advisors. The typical financial advisor (I know there are exceptions) has a lot on his or her plate besides researching individual investments to discover the very best investments for each individual client. A common practice for full service investment firms is to put client money into portfolios made up of a selection of ETFs that are expected to meet a client’s stated investment goals.

Consider the case of investors who want to draw an income from their portfolio. With this goal, an investor would likely see several popular dividend income ETFs in a portfolio put together by a financial advice firm. Here is a list of those popular income ETFs and their current yields:

  • Vanguard REIT Index Fund (NYSE: VNQ) with $35 billion in assets. Current effective yield: 3.86%.
  • Utilities SPDR ETF (NYSE: XLU) is the largest utilities ETF with $8 billion in assets. Current yield: 3.07%.
  • iShares Select Dividend ETF (NYSE: DVY) is a common stock ETF which as $17 billion in assets. DVY yields 3.1%.
  • Vanguard High Dividend Yield ETF (NYSE: VYM) is another stock ETF focused on high-yield common stock shares. VYM has $29 billion in assets. The fund has a current SEC yield of 3.06%.

As you can see, a strategy of using popular income stock ETFs to build a portfolio with produce an average dividend income yield of 3.3%. That means an investor would get just $33,000 per year in income off a $1 million portfolio. I am pretty sure someone living off a million-dollar portfolio would like to receive quite a bit more than $2,750 per month.

The alternate solution for more income is to own a portfolio of individual stocks. There are hundreds of stocks with yields of 6%, 8%, and up into the teens. For my Dividend Hunter service, the primary focus is on the safety of the dividend payments. Yet the current recommended stocks list has an average yield of 8.0%. To illustrate, here is a list of five stocks that are diversified across different financial sectors with very attractive yields:

  • Reaves Utility Income Fund (NYSE: UTG) is a utilities sector closed end fund that currently yields 6.1%.
  • Hercules Capital Inc (NYSE: HTGC) is a business development company providing capital to growing technology companies. HTGC yields 9.7%.
  • Macquarie Infrastructure Corp (NYSE: MIC) owns energy product terminals, power generation facilities and private aviation fixed base operations. This stock yields 7.8%.
  • Starwood Property Trust (NYSE: STWD) is a mortgage lender for commercial properties and yields 8.8%.
  • InfraCap REIT Preferred ETF (NYSE: PFFR) is a new to the market ETF that only owns preferred shares of equity (property owning) REITs. The preferred shares have a higher safety level when compared to the bulk of the preferred shares market which are issued by lending institutions. PFFR yields 5.6%.

With just five stocks, you have a decently diversified portfolio and an average yield of 7.5%. That is double the average yield of the income focused ETF list above. I do recommend that investors own about 20 stocks for adequate diversification, but the list above gives you a graphic example of how if you learn about income stocks on your own, you can literally double the dividend income you earn off your investment portfolio.

Individual high yield stocks should be the cornerstone of your income portfolio. And these are the kinds of stocks my Dividend Hunter readers are using to build their own income streams… some of them quite massive.  These stocks are part of my new income system called the Monthly Dividend Paycheck Calendar. It’s set up so that by following along you could see extra income of as much as $40,000 or more every year… for the rest of your life.

Get up to 14 dividend paychecks per month from safe, reliable stocks with The Monthly Dividend Paycheck Calendar, an easy-to-use system that shows you which dividend stocks to pick, when to buy them, when you get paid your dividends, and how much.  All you have to do is buy the stocks you like and tell them where to send your dividend payments. For more information Click Here.


Source: Investors Alley

Cryptocurrency

The Coming Bitcoin Bust

The bitcoin mining company’s owner looked back one last time…

Behind him were row upon row of modified PCs, thousands of them, still neatly mounted in their racks. How many times had he walked in, greeted by a wave of heat and the blast of noise from thousands of fan motors inside those machines, straining to keep their microprocessors cool?

It was the sound of digital money being created as each machine’s chip strained to solve another piece of an elaborate cryptographic puzzle — the very basis for the cryptocurrency — and unlock just a little more bitcoin.

It was all gone now. The room had a funereal silence.

The great cryptocurrency boom had gone bust.

No one could explain why, at first. Bitcoin mysteriously plummeted in value for weeks, then months. But news leaks had finally identified the root of the problem…

“Damned quantum computers,” muttered the man as he shut off the lights and walked out for the last time.

Quantum Computing: The Next Step in Cyber-Insecurity

All of that’s made up, of course. But could quantum computing really launch us into a new era of cybersecurity — and spell the end of the cryptocurrency boom to boot?

First, a little explanation: Quantum computing technology is based on the mind-bending aspects of quantum theory.

In “classical” digital computing, information is processed in a binary fashion as a series of ones and zeroes.

With quantum computers, we get bits of information that can coexist in multiple states at any one moment in time. So everything is processed much, much faster.

Big Data problems that take a half-hour to solve with today’s supercomputers can be finished in a mere second — yes, one second — by a quantum computer.

Back in 2014, one of the least-noticed, most earth-shaking aspects of the Edward Snowden affair was the disclosure of documents proving that the National Security Agency was racing to build “a cryptologically useful quantum computer.”

Today, the advances come at a monthly pace…

Could quantum computing really launch us into a new era of cybersecurity — and spell the end of the bitcoin boom to boot?

Perhaps most stunning of all, the world’s first commercially sold quantum computer — the 2000Q, manufactured by Canada’s privately held D-Wave Systems — went on the market in January. (The price tag is $15 million.)

What’s the point? Cybersecurity investors need to pay attention because quantum computing holds great investment potential. It’s no longer the realm of theory and primitive computer-lab mockups. It’s in the real world, today, right now.

Can you imagine what a quantum computer might do to a cryptocurrency — unlocking its blockchain-based cryptographic puzzle a lot faster than its creators thought possible and dumping thousands of units of it on the market?

And then there’s the challenge — and promise — of using quantum computing for cybersecurity.

How do you keep secrets in a world where even the longest, most random password can be figured out in a few seconds?

Fortunately, if quantum computing were a ballgame, we’re still at the part where some muckety-muck gets up and throws the ceremonial first pitch (that promptly bounces into the dirt just before home plate). But the technology is both a threat and a safeguarding tool at the same time.

Kind regards,

Jeff L. Yastine
Editor, Total Wealth Insider

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Source: Banyan Hill

Energy, Growth Stocks

3 Renewable Energy Stocks Up Double Digits

Here is one item that surprised me a bit in the course of research project called the Singularity… After years of a lot of hype and false starts, the shift to renewable energy has finally begun to move ahead at a pace that has taken many by surprise.

2016 was a banner year for the sector. In a report, the International Energy Agency (IEA) said that renewables represented almost two-thirds of new net electricity capacity additions last year, with nearly 165 gigawatts (GW) coming online.

The IEA added that solar power was the fastest growing subsector, with generating capacity soaring by 50% in 2016 to over 74 GW. China accounted for almost half of the gain. The forecast from the IEA calls for another 660 gigawatts of solar power capacity to be added by 2022.

Even the biggest oil company in the world – Saudi Aramco – has taken notice. It called this disruptive macro trend a “global transformation” that is “unstoppable”.

These unstoppable macro trends are just the type of situations that spell profit opportunities for you. But before I get into some specific places for you to invest, let me fill you in more on what is driving the accelerated move into renewable energy.

Driver #1 – Corporations

One reason for the recent growth in renewable energy power generation is that major global multinationals are demanding it.

Just two weeks ago, Microsoft (Nasdaq: MSFT) agreed to buy all the electricity produced from a new wind farm in Ireland for the next 15 years. The wind farm is being built by General Electric (NYSE: GE) and will power Microsoft’s cloud computing services in the region.

This move will take Microsoft’s direct global procurement of renewable energy worldwide to nearly 600 megawatts. But it is hardly the only company taking such measures. Three weeks ago, Facebook (Nasdaq: FB)announced its plans for a new data center in Virginia would include power supplied by solar power facilities built by Dominion Energy (NYSE: D).

So far in 2017, U.S. companies have announced purchase agreements for two gigawatts of power. This number is sure to rise as over 100 (40+ in the U.S.) multinational companies have committed to make their electricity supplies 100% renewable.

Driver #2 – Emerging Economies

However, the real driver behind the rapid acceleration in renewable energy power generation comes from the emerging economies, led by China. As with telecommunications and financial services, the emerging world is bypassing the old technologies and moving straight into new technologies.

In many cases, renewable energy is now the cheapest form of new power generation for these countries. A study from Morgan Stanley pointed to the fact that the cost of solar power panels has fallen by more than 50% in less than two years, thanks largely to China. It added that in countries with favorable wind conditions, costs for wind power can be as low as one-half to one-third of natural gas or coal-fired power plants.

The leading alternative source of energy in the developing economies is solar power. Moody’s estimates that, by the end of the decade, emerging markets will be home to 353 gigawatts of solar power capacity – an increase of 2.6 times the 2015 levels.

While China will account for the majority of this increase, other developing regions of the globe are also participating. Moody’s says that, by the end of 2018, Latin America is scheduled to have installed 14 gigawatts of capacity (nearly five times more than 2015), the Middle East and Africa will also have installed 14 gigawatts (a seven-fold increase from 2015) and India will have added 28 gigawatts of solar power capacity (a jump of nearly six times).

The bottom line, according to the IEA, is that in 2022 renewables will have 30% of the global power market with a total growth in capacity of 920 gigawatts, again led by China, which has already accounted for 40% of the overall growth in renewable energy.

3 Ways to Invest in Renewable Energy

Unfortunately, some of the very best companies that are at the center of the renewable energy industry do not trade in the U.S. For example, the Danish firm Dong Energy (soon to be named Ørsted) is the world’s largest builder of offshore wind farms.

But that doesn’t mean you can’t make money with some U.S.-listed investments. For very broad exposure to the sector, there is the VanEck Vectors Global Alternative Energy ETF (NYSE: GEX). It is up a very nice 21% year-to-date and over 17% the past year.

The fund holds 31 securities across a broad spectrum of industries related to renewable energy. The companies in the fund must obtain at least half their revenues from the renewable energy industry. So, for example, Tesla (Nasdaq: TSLA) is in the fund. GEX does have a global flavor with about 57% invested in the U.S. and the rest globally.

For single stock exposure to solar power, a good choice is First Solar (Nasdaq: FSLR), which is also in GEX’s portfolio. The stock has gained nearly 48% year-to-date. The company is the leading global provider of solar energy solutions with more than 10 gigawatts of installed capacity.

The company’s revenues are split almost 50-50 between sales of solar modules (using its proprietary thin-film semiconductor technology) and services that provide complete solar power systems solutions including project development, construction, along with operation and maintenance. The latter is a source of recurring revenues.

While the U.S. market accounted for 83% of its revenues in 2016, First Solar is moving toward where the growth is. Almost 90% of its project pipeline in the latest quarter – 3 GW of mid-to-late-stage opportunities – comes from overseas. The geographic diversification is wide with orders from India as well as Latin America, Africa, Europe and the Asia-Pacific region.

Another possible way to play the rush to renewable energy is through a utility that is involved in the sector. One such example is NRG Energy (NYSE: NRG), which is the second-largest U.S. power producer and is expanding its renewable energy operations. Its stock has soared 113% year-to-date and is up 123% over the past 12 months. So even more than the double digits promised in the headline.

I like the fact that its CEO, Mauricio Gutierrez, gets it. He said in February that utility companies failing to change their business model would become “obsolete” thanks to the “unprecedented disruption” in the industry.

In the second quarter of 2017, NRG revenues from renewables came in at $126 million. That sounds small but the growth rate was impressive – up 22.3% year-over-year. In the third quarter, NRG signed a contract to sell power for 22 years from three solar projects to Hawaiian Electric.

The company is also involved, together with Japan’s JX Nippon Oil & Gas, in Petra Nova. This is the world’s largest post-combustion carbon-capture system. The unit is capable of capturing more than 5,000 tons of carbon dioxide daily. That is the equivalent of removing over 350,000 cars from the road.

Renewable energy is definitely a sector you want to invest in as it has finally moved past the hype stage and on to becoming a growing source of power in the real world. It’s just one part of a transformation in technology, society, lifestyle, and even life itself that’s happening all around us. I call this the Singularity.

The Singularity presents investors with the opportunity for a piece of the over $100 trillion growth over the next seven years from all of these changes. Growth for companies like First Solar and NRG mentioned above as well as many others you’ve probably never even heard of but will soon.

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Source: Investors Alley