There’s a very important distinction between the two. Particularly in light of what’s unfolded over the past year around the world.

A few years ago, I was listening to a gentleman who was probably 20 years older than me talk about how his guitar lessons were going.

He was intelligent. He was well-educated and successful.

But when he was a boy, his family pushed him toward science and engineering. Now, he ultimately built a lucrative career out of those. The problem was, for him to achieve that success, his family kept him away from anything having to do with the arts – music, painting, etc.

It wasn’t until later in life that he decided to take up guitar.

“It’s very frustrating,” he admitted after three years of playing. “I thought I’d be better by now.”

All of his other successes – his aptitude for science and math, his mountain of professional accomplishments – made him feel invincible. These successes made him feel like everything would come easily.

He figured that if he read voraciously about music theory, he would pick up a guitar and, magically, be able to play like Wes Montgomery or Stevie Ray Vaughan.

He didn’t expect to put in the same amount of hard work that had been required in his professional life.

I often feel this is the same mentality people have when they start investing.

They think it’s easy. Deceptively so.

They believe they’re going to become millionaires overnight.

And I believe a lot of the frustration – including claims that the markets are rigged or unfair – spawns from this idea that individuals can just jump in and instantly be successful.

Investing is simple… but it’s far from easy. Being able to understand the importance of one indicator could be the key in this hazy environment.

Easier Than Delivery

Buying shares of a company online is less complicated than ordering a pizza.

You just enter the ticker symbol and how many shares you want and press “submit order.”

It doesn’t get much simpler than that.

But buying shares of a good company – an investment that’s going to generate strong income and/or life-changing returns?

That’s far more difficult.

Investors need to understand the difference between good and bad valuation metrics.

They need to know whether a company’s growth opportunities are solid.

Whether a company’s revenue and earnings are beating expectations.

And whether management is intelligent and overcoming the challenges that dog its competitors.

The list goes on and on…

There’s a lot to consider.

And even if it all looks perfect – everything is in tune – a black swan event can swoop in out of nowhere and force a great opportunity to go belly-up.

That’s what COVID-19 has inflicted upon whole swaths of the market over the past year.

It’s how investors respond in moments like this that determines whether they belong at the “novice” table or are able to step up and join their more seasoned counterparts.

The Simple Indicator Investors Must Watch

We have been living in unprecedented times.

Take a moment to appreciate and understand how much uncertainty is still out there.

When will life truly get back to normal? Will there be another surge in cases? When will we be able to put the pandemic behind us?

We’re about to dive headlong into first quarter earnings season. And the long-term effects of COVID-19 on businesses are still yet to be seen.

The markets hate uncertainty. They fluctuate on a lack of clarity.

And when the level of uncertainty is high, the likelihood of mistakes increases exponentially.

But there is a telltale sign of confidence to which investors can turn: insider buying.

Company executives and directors must disclose when they purchase or sell shares.

These moves can provide some light in dark times.

These insiders know how their companies are faring better than anyone else.

So during times of uncertainty – when no one knows how much of an impact the economic shutdown has had – following the moves of insiders is one of the best windows into a corporation’s health.

Ignoring the broader markets and simply focusing on individual companies can help eliminate questions of whether investors missed the bottom or are buying at the top. And insider actions can provide even more insight into this.

Now is the perfect time for investors to add this indicator to their investing toolkits.

When watching great athletes, great musicians and even great investors, we often fail to appreciate just how much work went into honing their skills. The thousands of hours they spent practicing and training – repeating it all, again and again.

These individuals don’t view failure as a setback or disaster. They view it as a moment to learn and grow.

No one waltzes into the markets and instantly becomes the next Warren Buffett or Benjamin Graham.

But if investors take the time to study their philosophies and learn from their missteps – if investors adapt their strategies to the changing environment as insiders do – there’s no reason they can’t be successful.

Buying shares of a company is far simpler than learning chords on a guitar. But learning how to be consistently profitable takes far more years of practice and a more diverse set of tools. And this is something serious investors shouldn’t shy away from.

Here’s to high returns,

Matthew

The post The Simple Indicator Investors Must Watch appeared first on Investment U.

It changed the way I look at the markets and analyze stocks.

It was an eye-opening moment that improved my returns and removed all of the guesswork from investing.

This strategy is so powerful that, to this day, every company I recommend to subscribers is filtered through this lens.

And I tell every investor who asks me what the best trading or investment strategy is to do the same.

A Strategy for All Seasons

Seasonal trading has long been brushed aside as “random” or a market anomaly.

Mainstream financial talking heads and columnists love to try to poke holes in our strategies and ideas.

They do this despite decades and decades of research and real-world work by guys like Yale Hirsch, Jeffrey Hirsch, Norman Fosback, Dick Stoken, Peter Eliades, Jay Kaeppel, me and others.

Personally, I feel that we’ve collectively more than proven that our various approaches are viable, time and time again.

But it never seems to be enough.

As Kaeppel wrote, “If 100-plus years of strong performance are not enough to convince you that a given method or trend is viable, then you are awfully tough to please.”

Unfortunately, a lot of investors are exactly like that.

Seasonal and trend traders have long been the Rodney Dangerfields of the investing world. (“We don’t get no respect!”) But quite often we outperform the market by a wide margin.

In reality, our economy thrives on consumer spending. And what consumers demand shifts throughout the year.

Bikinis are on sale right now, while winter coats are selling at a premium. That’s not a coincidence – it’s a fact.

And using this truth to our advantage helps us score the biggest gains.

The Strategies You Love to Hate

Over the years, I’ve written that every industry has a season.

At the same time, there are countless articles on the most famous – though most widely misunderstood – seasonal trading strategy: Sell in May and go away.

On the surface, it seems simple enough. And it rhymes – which means it must have some sort of merit, right?

(In fact, the whole adage is “Sell in May and go away, and don’t come back ’til Labor Day.” I mean, that’s poetry.)

But here’s the important question for you: Sell what?

Everything?

Just dump your entire portfolio and sit in cash every May?

That seems like an exceptionally stupid idea and awfully damaging to your financial future. And any person who blindly promotes the “sell in May” strategy is unintentionally doing more harm to you than good.

In reality, the “sell in May” strategy applies to only a handful of specific sectors… not the entire universe of stocks or mutual funds.

But its catchiness turned it into an earworm that’s been mindlessly parroted for decades.

More importantly, one of the sectors it applies to is a “Buy” right now!

We’re heading into one of the busiest stretches of the year for seasonal trading. Mainly, we have the holiday shopping season already underway. So this is a particularly important period for retailers.

Well, let’s look at an index of 25 retail stocks that I follow and its October-to-May performance.
Since 2000, holding shares of the Prime System Retail Index from October to May returned an average of 14.76% with a success rate of 76.2%.

Inversely, holding shares of these same companies from May to October had a mere 42.86% success rate with a negative return.

This is why they fall into the “sell in May” strategy.

But you’ll also notice that the down years in the chart were financial collapses, like from October 2019 to May 2020.

But the bounce-back years are extraordinary. In fact, this index of 25 companies is already up more than 19% since the start of October!

Follow the Money

The success of seasonal trading is built on optimizing time and efforts.

Investors hold shares of companies only during the company’s best periods of the year.

My strategy and investing philosophy are built on a basic premise…

Shares of most companies move asymmetrically.

That means there are blocks of months within a given year when shares will perform well – sometimes even exceptionally well. And there are other months when they won’t.

It’s not random. And it’s not an anomaly.

Because it’s usually the same months each and every year.

And more often than not, that relates back to the company’s underlying business, revenue and earnings.

Most businesses are cyclical or seasonal. And in seasonal trading, all you want to do is focus on these booming quarters and forget the rest.

That’s how we can consistently score big while limiting our downside risk. And it’s why seasonal trading sees so much higher returns than any other strategy.

I’ve been an avid disciple of seasonal trading for nearly my entire career. And I credit all of the portfolio awards, records and recognition I’ve received to this approach.

I believe every investor who applies a seasonal approach to their trading will improve their returns and simply become a better trader.

Here’s to high returns,

Matthew

The post Get the Most From Your Investments With This Trading Strategy appeared first on Investment U.

Americans have been wrestling with anxiety and unrest related to the pandemic. And to throw kerosene on that dumpster fire, we have mounting anxiety over today’s U.S. presidential election…

At least one of those will soon be in the rearview mirror… hopefully.

Over the past month, I’ve covered the “October Effect” during election years in-depth and how the markets collapse in the month leading up to the election as uncertainty reaches a crescendo.

That’s exactly what we’ve watched play out this year…

The Dow tumbled 4.6% last month.

That’s the largest pullback we’ve seen in October during an election year since 2008. And it’s also the fifth consecutive October before a U.S. presidential election that the Dow has ended the month with a big drop.

That’s why I’ve been preaching for weeks that, despite everything 2020 is throwing at us, this move down is normal.

And that should provide a little cushion of comfort if nothing else does.

But now that the election is here, what’s next?

Well, the data is optimistic, no matter who wins the White House.

The U.S. Presidential Cycle

For investors feeling anxious about what will happen in the market over the next 12 months, there’s a trend that they can turn to for guidance: the U.S. presidential cycle.

I’ve successfully followed this trend in times of crisis and in times of plenty. And I’m always surprised by how accurate it is.

This is what I used to predict that in 2017, no matter who won, the S&P 500 would increase 19%… which it did.

It’s what I used to predict the “Great Correction of 2018” and what I used to predict at least a 17% return in 2019… both of which we got.

And it’s what I used to warn investors that 2020 was going to be a turbulent year for the markets… which it was in a variety of ways.

Now, I’ve been able to do that because I’ve created a modern version of the U.S. presidential cycle.

It’s a four-year cycle that has two monster years and two years of caution. Traditionally, the view posed by trend trading icons, like Yale Hirsch, is that the third year of a presidential term is the strongest, followed by the fourth, second and then first.

Well, I’ll show you why that’s wrong…

As we’ve seen over the last eight presidential terms, the Dow’s best years – by far – have been the first and third years of the cycle.

During the first year of a new term, the Dow averages a 15.7% return. And in the third year, the blue chip index’s average gain is even better at 16.7%.

The first years that underperformed this mark were 2001 and 2005. Third years that underperformed that average gain were 2007, 2011 and 2015.

But is one party in the White House better for the markets than the other?

The data here is also counterintuitive…

Blue vs. Red Market Returns

The threat occurs every election cycle: “If so-and-so wins, the stock market will crash!”

For the most part, that’s not true.

But I’ve watched plenty of investors liquidate their holdings or refuse to invest in the market because their party didn’t win the election. They claim it’s all going to come crumbling down any minute because their policies are destructive to investors.

It’s silly.

As I’ve stated here numerous times throughout the years, “There will be down days, down weeks, down months and even down years. But the market ultimately moves in only one direction: up.”

Since 1952, the annualized return of the S&P 500 when a Democrat sits in the Oval Office is 10.6%. The annualized return for a Republican president is 4.8%.

Neither is negative.

And the variance is largely due to the last two Democratic presidents overseeing massive economic expansions that led to the stock market skyrocketing.

The two presidents who oversaw the largest stock market gains ever were Democrats – Bill Clinton and Barack Obama. The two presidents who saw the worst S&P 500 returns were Republicans – Richard Nixon and George W. Bush.

Prior to COVID-19, the biggest stressor for Americans was the 2020 election. And we’ve seen that stress continue to ramp up as the election has grown closer and the rhetoric has grown more divisive.

But history has shown us that regardless of who wins the White House, 2021 should be a strong year for the markets. The stock market largely heads higher during the first year of the cycle – even if there are bumps along the way.

Too many investors cause irreparable damage to their portfolios by fleeing to the sidelines when their party doesn’t win the election. This is one of the most destructive biases investors can practice.

As history has shown, the markets love certainty. And that’s what we get in the four-year presidential cycle.

Here’s to high returns,

Matthew

The post Why the Presidential Election Will Lead to a Brighter Year appeared first on Investment U.

If you guessed the annual release of the KFC fried chicken-scented firelog…

Or the Jones Soda Co. (OTC: JSDA) holiday flavor pack with thirst-quenching flavor offerings such as turkey and gravy, green bean casserole, and mashed potato…

I’ll give you partial credit.

I know, nothing says the holidays more than your home smelling like a 16-piece bucket of original recipe chicken or drinking a glass of fizzy mashed potatoes.

But despite those festive releases, the time of year we’re talking about is third quarter earnings.

And regardless of whether companies are beating, missing or in line with expectations, the results are like the thought of chugging a green bean casserole-flavored soda… not good.

The “October Effect” in Effect

To kick off October, I laid out why investors should prepare for the markets to end the month down.

There’s an unappetizing trend where the Dow Jones Industrial Average has closed out October in the red five of the last seven U.S. presidential election years – including the last four consecutively.

We’re currently watching that “October Effect” play out almost exactly as expected.

The Dow is now down nearly 1% this October. And all three of the major indexes pulled back steeply from their highs of the month as third quarter earnings season began.

And that’s because every company – not just the bad ones – is getting hammered by the results.

Historically, companies that miss on earnings per share (EPS) expectations fall an average of 2.3% on the release.

During third quarter earnings this year, the average drop is 4.4%!

That’s almost twice as severe as the historical average.

But even worse, companies that are beating EPS expectations are also seeing declines.

And this is exponentially worse than what we’ve experienced historically.

We’re in a moment where good news is not good enough and bad news is apocalyptic.

And that could be exacerbated in the coming days because this is the most important week of earnings.

Microsoft (Nasdaq: MSFT), Apple (Nasdaq: AAPL) and Amazon (Nasdaq: AMZN) will all report.

These three companies combined account for 34.38% of the Nasdaq-100’s weighting!

Where these three go, so goes the rest of the market. So I expect the October mayhem to continue. But if all three beat expectations and their results are celebrated – it’s off to the races!

A Repeat of 2000?

Mr. Market is doing his best Atlas impression.

Beyond fried chicken-scented logs and turkey and gravy soda, he is carrying a lot on his shoulders.

First, we have the traditional anxiety over the U.S. election that we’ve seen play out again and again.

But this year, there are a couple of extra spices added to the fried chicken-scented firelog.

There’s a widespread belief that this election won’t have a winner for some time. And we’re most likely going to see a repeat of the Bush-Gore debacle of 2000 where we won’t know the results for weeks. (The Dow fell 5% in November that year.)

We have a lack of stimulus headway in Congress – namely the Senate.

And the number of COVID-19 cases is increasing across the globe with new shutdown measures being implemented.

Finally, we have the fact that the markets – despite the obstacles, pitfalls, economic destruction and more – have performed quite well this year.

In fact, tech stocks have soared to new heights and the Nasdaq is up more than 26% year to date. That means these positions are likely outsized in every investor’s portfolio – whether they’re actively managed or not.

So some reshuffling may be in order over the next several weeks.

But regardless of what unfolds in the days ahead, investors have to remember to keep their heads. We always expect the best but prepare for the worst with our use of trailing stops and position sizing. That way, we’re unfazed by everything in between.

We said October was going to be bumpy. And that’s exactly what we’ve gotten. But we know that once the dust eventually settles, the markets more often than not resume their march higher.

So get yourself a KFC chicken-scented firelog and crack open a candy cane soda, and peruse all those currently discounted opportunities you want to hold long term.

Here’s to high returns,

Matthew

The post Stocks Falling After Third Quarter Earnings Results appeared first on Investment U.

There is a monster lurking in office buildings all across the country.

And in our new, socially distanced world, the threat it poses is bigger than ever before.

But containing and securing this beast presents a massive opportunity for investors to profit.

In fact, companies working on this problem are beating the market not just by a handful of points… but by severalfold!

Rise of the Franken-Network

Most businesses have been building onto their networks for decades.

They’re now faced with this clunky, “Frankenstein’s monster” system that is made up of different, disparate pieces sewn together.

It’s not the prettiest creation. But it’s worked.

The go-to security method to protect these beasts has been the tried and true castle-and-moat approach.

Watered down, this means external threats are kept at bay by a firewall, which acts as the moat. There’s only one way in: a drawbridge, or a password challenge-response system.

To gain access to the network, a user must show credentials at this entrance. Once they show the proper ID and undergo some stern questioning by guards, they can come and go as they please.

We all cross drawbridges several times per day.

Well, hackers use these drawbridges too. They try to disguise themselves as trusted users in order to stroll past the guards. That allows them to cross the moat into the castle, or the internal network.

From there, they can go about as they please.

So it’s basically been a friendly trust-but-verify model. Because, realistically, the majority of people parading across the drawbridge aren’t up to anything nefarious.

Well, in today’s world, this concept is more out of date than ever.

The Dawn of Zero Trust Security

In the last few years, we’ve seen the emergence of “zero trust” security.

The idea here is elegantly simple: Everyone is a threat.

Users are given access to only what they need – nothing more – through micro-segmentation as networks are broken into small zones.

Not only does it make networks more difficult to break into, but if an unwanted individual does get in, they’re constantly asked for ID and verification.

The most common zero-trust security trend is probably multifactor authentication. Your Amazon account, your brokerage account, and your Facebook, Gmail and iCloud accounts all use this. To gain access, you enter your password and then must enter a code that is sent to another device, like your smartphone.
The increasing problem today is vacant office buildings. Employees are scattered to the wind, working remotely. The castle-and-moat concept is antiquated.

Making matters worse is that nearly three-quarters of all companies intend to shift to more remote work – even after the COVID-19 threat has passed.

For security leaders, this has been a headache. In fact, 80% said their companies accelerated cloud transformation efforts this year… and they were unprepared for the overhaul.

Already, cyberattacks have experienced a meteoric rise. And it’s likely to get worse.

That’s why more than 75% of businesses say they need to shift to a zero-trust security framework. And scores of companies are committing to this migration.

This is triggering a boom for cybersecurity firms like Cloudflare (NYSE: NET), Okta (Nasdaq: OKTA), SailPoint Technologies (NYSE: SAIL) and others.

And year to date, the Global X Cybersecurity ETF (Nasdaq: BUG) is outperforming the S&P 500 by more than fivefold!
All of this is why cybersecurity has been one of our favorite trends to follow, especially in 2020 and the post-quarantine world.

Remember, the projections are monstrous. But I believe they’ll be exceeded.

By 2030, it’s projected that there will be more than 125 billion devices connected to the internet. All of these will offer opportunities to ne’er-do-wells.

That means the need for protection is skyrocketing. By 2027, the global cybersecurity market is projected to be worth $326.4 billion.

The “Frankenstein’s monster” networks that are currently lurking all across the world can be saved by zero-trust security. And for investors, that can translate into a major payday.

Here’s to high returns,

Matthew

If you found this article on zero trust security helpful, sign up for the free Profit Trends e-letter below! By doing this, you’ll receive exclusive research on current market trends right into your inbox. Whether you’re a beginner or an experienced investor, Profit Trends is here to find the best opportunities for you.

The post Outdated Cyber Protection Has Led to the Rise of Zero Trust Security appeared first on Investment U.

Unfortunately, “trends” is a broad subject. And some of these are developing more rapidly than others. So, we wanted to provide investors the top 10 stock trends we believe should be on everyone’s radar… if they’re not already.

Innovative Stock Trends to Watch

5G Stock Trends

There may be no innovation having a broader impact than 5G. The next gen networks will be 100-times faster than 4G. These connectivity speeds are vital for our future. And this has led some to call it “the lifeblood of the new economy.” 5G will impact more than $12 trillion of global goods and services by 2035. That’s more than 10% of global GDP.

5G Tech Stocks to Watch

Fourth Industrial Revolution (4IR)

Next on our list of stock trends is the Fourth Industrial Revolution. 4IR technologies are dependent on 5G. This includes 3D printing, artificial intelligence (AI), autonomous vehicles, big data, the cloud, cryptocurrencies, the Internet of Things (IoT), quantum computing, robotics, smart homes, virtual reality/altered reality (VR/AR) and more. These are projected to have a combined potential impact of as much as $60 trillion over the next decade.

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April 5, 2024

Cybersecurity

The numbers are staggering. By 2030, projections suggest there will be more than 125 billion devices connected to the internet. And the need for protection is booming. By 2027, the global cybersecurity market is projected to be worth $326.4 billion.

Why You Should Invest in Cybersecurity Stocks

Electric Vehicles (EVs)

By 2027, global EV market will be worth more than $1.2 trillion. And by 2028, will EVs will capture more than 16% of the automotive market. More and more consumers are turning to EVs – particularly among the younger generations – as alternatives to fossil fuels are embraced. The electric vehicle market is certainly a stock trend to keep an eye on.

The Best Pick and Shovel Plays on Electric Vehicles

Renewable Stock Trends

Over the next decade, the clean energy sector will see $8 trillion to $16 trillion in new investment. Costs for wind and solar power continue to fall. And costs for energy storage are starting to drop as well. With battery prices in decline, wind, solar and storage are becoming competitive with any other forms of power generation. In conclusion, we believe fossil fuel demand peaks this decade.

Where to Invest During the Renewable Energy Transition

More Stock Trends on The Rise

Precision Medicine

Bioinformatics is surging in healthcare. And with the rising prevalence of cancer and other diseases across the globe, precision medicine is about to experience truly explosive growth. By 2026, the market is expected to top $119 billion. In addition, we’re witnessing a new era of personalized treatment.

The Magic Mushroom Revolution is Here

Space Stock Trends

Commercial space investment has grown 79% since 2009. And it has been a major stock trend. That year, the entire industry changed when Elon Musk’s SpaceX delivered its first payload. In 2019, the global space industry was worth $350 billion. But by 2040, it’s projected to grow to more than $1 trillion. We’re witnessing a revolution from commercial space tourism to satellite launches in the tens of thousands.

Space Stocks: The Space Race Is Heating Up

eSports Stock Trends

Since 2015, esports revenue has been rocketing higher. For instance, global esports revenue surged 38% in 2018 to more than $906 million. Last year, revenue jumped another 24% to more than $1.1 billion. By 2021, revenue is conservatively expected to top $1.65 billion. Yet, in North America, esports is still in its infancy. Asia, particularly China, is the main market now. But that will soon change. Esports is transforming into a global phenomenon. In 2019, the worldwide competitive video game audience was a massive 454 million people!

The Sports Betting Opportunity Investors Can’t Ignore

Plant-based Food

The global plant-based food market is worth around $12 billion today. By 2027, its projected to be worth roughly $74 billion and could grow to $140 billion by the end of the decade. And by 2040, the global meat industry is estimated to be worth more than $2.7 trillion. Cultured meat and non-vegan meat replacements are projected to account for the majority of this opportunity.

Can You Buy Impossible Foods Stock?

Sign Up to Get Free Alerts

To sum up, each month we hit on one of these major trends reshaping our world. And investors can subscribe to discover what we think their portfolios must have exposure to for long-term success!

Most importantly, for all of the latest stock trends, subscribe to my free Profit Trends e-letter below. Until next time, here’s to high returns!

Read Next: Stocks That Went Up This Week: 5-Day Gainers

The post 10 Stock Trends Every Investor Must Know appeared first on Investment U.

I often say that this is my favorite time of year because of all the profitable trends coming to a head.

But beyond the potential investment opportunities it offers, this season can lead to some financial stress… especially when it comes to gift giving and money.

Holiday Shopping Tips to Help You Save Money

Look, we’ve all been there.

We want to lavish our friends and loved ones with gifts.

We want to buy them expensive things – frivolous things they’d never buy themselves.

We want them to have everything they’ve ever dreamed of or cared for. And we want our children to have everything we never had.

It’s in our DNA to be charitable and giving.

But you don’t want to give to the point where you’re hurting. Especially in the economic environment we’re in. And because we don’t know what’s ahead in 2021…

(That is, if 2020 ever actually ends and we’re not stuck in the matrix.)

So here are three holiday shopping tips to ensure you have a happy holiday season and walk into 2021 financially sound.

No. 1: Do Away With the “Obligatory” Gifts.

One of the best – and worst – things about living in a society is all the agreed-upon rules.

And nothing is more irritating than social obligations.

Well, you can’t be expected to buy a gift for everyone in your life. No matter how small that present may be.

It’s impossible. And the stress of making sure you haven’t forgotten someone is crushing.

Buy gifts for your immediate family only.

If you have a large family, trim out those second and third cousins if you haven’t seen them since the family reunion of ’08. Let Santa pick up the slack there.

Basically, if you’re buying gifts for a stadium of people outside of your immediate family, consider cutting that list back.

This isn’t about being a Scrooge or miserly. This holiday shopping tip is about being practical.

I have been best friends with a group of people for almost 30 years. I exchange presents with only three of those people every year because those are the three I most regularly hang out with. It’s not that I don’t love the rest of them or never show them I care in other ways. We just don’t exchange gifts, and no one is remotely bothered by that.

I would love to tell you there’s an exact cutoff number beyond your immediate family for gift giving.

But I can’t. Maybe you’re more popular than I am.

I can tell you that the number of close friends people actually have – regardless of how many are following them on Facebook, Instagram or Twitter – is between three and five.

So if you’re buying gifts for 20, 30 or 40 people each year, rein that in.

Do away with those social obligations and go from there.

Because you have to get a handle on that gift-giving list to start the most important rule of the holiday season…

No. 2: Create a Budget and Stick to It!

I know this holiday shopping tip seems like a “DUH” piece of advice.

But seriously, don’t shrug it off.

Do it.

How many times have we gotten caught up in the frenzy of shopping? Particularly in our “Buy it now!” world of online shopping.

We find the perfect gift for someone. Then we find another that’s equally as perfect or one that they’ll love just as much. And that happens again and again and again.

All of a sudden, you’ve got a mountain of deliveries or bags.

It’s very easy to lose sight of what you’ve spent and how far over budget you’ve gone until it’s too late.

Your holiday budget should be slightly more than 1% of your annual income. You don’t want gift giving to financially impact your ability to function normally.

Now, the average American spends more than $1,000 on gifts during the holidays.

The median household income in the U.S. is $68,703. So that means people are typically spending roughly 1.46% of their annual take on holiday presents.

But the issue is that 69% of Americans have less than $1,000 in their bank accounts. That’s a byproduct of living paycheck to paycheck. Dropping one to two grand on Christmas gifts isn’t helping that scenario.

On top of that, 61% of Americans dread the holidays because of the financial burden. And a quarter will take on additional debt to fund purchases.

This is why creating a budget and sticking to it is imperative. And maybe the most important holiday shopping tip.

Plus, you should start your holiday shopping early, maybe even before Halloween. That way you can take advantage of the most deals.

No. 3: Those With Kids… Stop.

For those with children, I want you to ask yourself: Am I buying this for them… or for the broken child inside of me?

I know households that have two Christmas trees, because one isn’t enough to house all of the presents for their children.

I know households where unwrapping presents takes hours – HOURS! – because of all the gifts for the kids.

Here’s the deal… Are those things really for them? Or are they for you? For that disappointed little child inside of you?

I get it. I grew up poor. Christmas morning always had its downers.

But stretching yourself financially thin to shower your kid with gifts isn’t going to take those memories away.

So my last holiday shopping tip is buy your kids gifts within reason.

And if you really need to drop all of that extra dough on them, put some in a savings account or invest in some exchange-traded funds. A couple hundred bucks each year and they’ll have a nice chunk of change waiting for them when they reach adulthood.

The holidays should be about spending time with loved ones, not embarking on financial ruin. The most expensive gifts aren’t always the best. More gifts don’t equal more love.

This year is the perfect opportunity to scale back… and keep it that way.

Here’s to high returns,

Matthew

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We see this play out repeatedly in the hype cycle. Expectations about a major event, a major product release or a new announcement boil over into exuberance.

Investors egg each other on, saying things like “The world will never be the same after this date!”

And almost without fail, reality falls short of the impossibly high expectations.

Battery Day was a dud.

The much-hyped Tesla (Nasdaq: TSLA) event had mobs of investors drooling. It was rumored that CEO Elon Musk was going to unveil a mind-blowing piece of “million mile” technology.

But instead of a Willy Wonka-like show, what they got was a multiyear plan that eventually sees the electric vehicle maker producing batteries in-house (instead of sourcing them from Panasonic) and some gradual technical and supply chain improvements to reduce costs.

Yawn.

Shares of Tesla tumbled from $430 all the way down to $372 in the days following the Battery Day disappointment.

But that’s okay.

Musk is trying to move mountains. And that takes time.

Shares have since rebounded. And they’re still up more than 400% in 2020!

But if you’ve missed out on the Tesla boat, there’s still a way investors can put themselves in the perfect position to profit on what the company laid out in its plans.

In fact, it’s already sent shares of one unknown company soaring more than 600% in the last month!

Supply Chain Squeeze

For as long as I can remember, the global EV boom has been haunted by the supply of raw materials needed.

Here at Profit Trends, we’ve covered these obstacles in the form of copper and nickel.

Tesla wants to have enough battery capacity to produce 30 million EVs by 2030. That’s a massive ramp-up from the 500,000 the carmaker will roll off the line this year.

And that’s only one EV maker’s goal!

But here’s the thing…

There’s one element standing in the way of Musk and his plans for automotive domination.

Lithium.

Total global production of lithium is around 400,000 tons per year. That’s enough to power 2 million to 3 million EVs. And that’s if all of that lithium went to battery production, which it doesn’t. Right now, only a third of the lithium mined is dedicated to EVs.

For Tesla and the rest of the EV makers out there to meet their lofty goals, a lot more lithium is required.

Now, global lithium demand is projected to triple to 1.5 million metric tons by 2025. And it’s projected to double by 2024.

This is a race between supply and demand. Though, as my friend and colleague David Fessler has pointed out numerous times over the years, lower battery costs mean more affordable EVs. And this boosts demand.

Musk understands the supply chain challenges that his dreams face. So he’s been going out and knighting his own winners in this race. The most recent was Piedmont Lithium (Nasdaq: PLL).

The emerging miner signed a five-year deal to provide Tesla with high-purity lithium ore. The announcement sent Piedmont shares soaring higher than a Falcon Heavy rocket!

Over the past month, Piedmont shares have rocketed more than 600%.

It’s a major win for the relatively unknown miner.

Under the agreement, Piedmont will ship one-third of its 160,000 metric tons per year in production Musk’s way. And if all goes well, the two companies can extend the deal for another five years.

This move underscores the type of profit opportunities in lithium and other needed materials we’ve been preaching for quite a while.

So you may personally not like EVs. You may think that Teslas are nothing but overpriced toys for the wealthy. But investors can’t ignore that EV adoption is a transformational trend that’s gaining speed. China alone is trying to have EVs account for 20% of all new car sales by 2025.

Every portfolio should have at least some exposure to lithium – through the world’s largest lithium miner, Albemarle (NYSE: ALB), Piedmont, or the broader Global X Lithium & Battery Tech ETF (NYSE: LIT).

Lithium, along with copper and nickel, is a key compound of this revolution. And the multiyear outlook is extremely bright.

Here’s to high returns,

Matthew

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