Author: Andrew Packer

Stock Picks

Felix & Friends: Top 6 Stocks to Buy Today

Posted on by Andrew Packer

The market’s lackluster performance in the past few weeks leaves the S&P 500 down about 5% from its all-time high. While that’s making some investors nervous, buying 5% pullbacks tends to work out over time.

Plus, 5% pullbacks occur more often than 10% pullbacks. Investors would need to go back to October 2023 to find the last one. As long as the market’s long-term uptrend is intact, buying 5% pullbacks makes sense.

With that in mind, investors have plenty of stocks to buy on market pullbacks that should generate big returns.

That includes tech giants like Microsoft (MSFT). While not the biggest name in AI, Microsoft has built a product suite that allows it to be the top or second player in a variety of software spaces.

The rollout of AI will continue to benefit Microsoft, and it’s the kind of stock investors should buy during pullbacks. Microsoft is also a dividend growth play, making ideal as a long-term holding.

Another winner here is Alphabet, parent company of Google (GOOG).

Besides growing out its own AI models, Google continues to generate massive cash flows in the search space. Plus, Google is gaining ground in the cloud services space.

Shares are also fairly priced, and the stock has underperformed recently on short-term concerns.

 

To see the full list of stocks to buy now, click here.

 

 

Stock market strategies

Swordfish: Are Stupid Options Actually Genius?

Posted on by Andrew Packer

There are many ways to trade. Most traders gravitate towards options. They can be used to build a position at a lower cost than buying shares of a stock. Or they can offer better returns when there’s a massive move.

Plus, options include both call and put options. So traders can inexpensively bet on a stock declining at a fraction of the cost of shorting a stock. The options market also offers a window into interesting and unusual trades.

For instance, the options market will let investors make trades with expiration dates years into the future.

For investors who predict a multi-year bull or bear market, buying long-dated options can offer massive prospective returns. Even if those trades look impractical or downright stupid now.

Currently, traders can bet five years out that the market will rally as much as another 67%. Over a five-year period, that’s certainly possible.

However, the average five-year rolling period is a bit under 70%. If the bet is correct and stocks return over 67%, the buyer of the options could make 10-60X returns, or up to 6,000%.

If the bet is wrong, it could mean a total loss. That’s the case if stocks trade lower, flat, or up less than 67% by 2029.

While buying long-dated market calls may sound like a potential big winner, the risk of loss remains high. Traders are usually better off making shorter-term trades. But sometimes, even a silly-sounding trade idea could be a big winner.

 

To watch the full options trade breakdown, click here.

 

Passive Income

Of Dollars and Data: Is There a Problem with Passive Investing?

Posted on by Andrew Packer

One of the biggest investment shifts in recent decades has been the move towards passive investing. Today, over half of all equity fund assets are in passive funds. That’s over $13 trillion in assets.

Passive investments avoid the higher costs of moving in and out of individual stocks. Instead, passive investments look to buy an index. Consequently, these funds offer low fees that make it easier to match the market’s returns.

However, the rise of passive investing has some potential dangers. Since most market indices are valued by weight, larger-cap companies dominate indices. If the Magnificent 7 tech stocks sell off, the overall S&P 500 index could fall. Even if the other 493 stocks in the index rise.

As more and more capital moves into a passive investment, the more this concentration risk rises.

Given the hefty valuations in many large-cap stocks, this danger shouldn’t be overlooked. Plus, by investing in funds, individual investors are giving money managers voting rights in specific companies.

This could simply mean that fund managers “rubber stamp” corporate voting with management. Even if such proposals aren’t in the best interests of individual shareholders.

For now, passive investing remains a runaway success. But investors may want to look for equally-weighted funds to avoid stock concentration risk.

 

To view the full list of pros and cons to passive investing, click here.

 

Economy

The Compound: No One Can Figure Out 5% Treasury Rates

Posted on by Andrew Packer

The most watched financial instrument is the 10-year U.S. Treasury bond. That’s because the yield indicates a risk-free long-term rate of return. Recently, yields have been on the rise, from 3.6% in September to 4.8% now in January.

Typically, the 5% level represents a tipping point for stocks and the economy. That yield may be too high to be sustainable given current debt levels. But it may also entice buyers into Treasuries.

Rising bond yields are also occurring as the Federal Reserve has been cutting its interest rates. That’s resulting in a steepening yield curve. With the yield curve now un-inverted, investors are getting paid more for holding longer-dated bonds. But such un-inversions have often occurred shortly before a recession.

If that trend holds, investors could expect trouble in the next 9-12 months. However, the trend may not as part of the pandemic-era oddities.

If bond yields are rising because of a healthy economy, then the economy may not sour until 2026.

For now, high bond yields are keeping some markets out of favor. One such market is the housing market. While prices have moved higher overall, the rate has significantly slowed.

With mortgage rates near 7%, it’s the housing market taking the most pain in the financial markets right now.

 

To watch the full interview, click here.

Stock market

Elliott Wave Options: New Year Fear, Bonds Hinting at Downside?

Posted on by Andrew Packer

Markets struggled in the first weeks of 2025. Strong jobs data hints at a strong economy. In turn, that means inflationary pressures remain. So, it’ll be challenging for the Federal Reserve to further cut interest rates this year.

Meanwhile, the bond market has already processed this idea. Bond yields have been rising since September, when the first interest rate cuts were made. As bond yields rise, pressures rise on the stock market.

That’s because stocks and bonds tend to move in opposite directions. As bond yields rise, the attractive yields garner more capital. That leaves less capital for the stock market. And after two years of back-to-back 20%+ returns, investors expect a market pause.

Stocks can still trend higher this year. But rising bond yields act as a tremendous tailwind. Particularly for capital-intensive industries and technology companies.

Given that the market didn’t even face a 10% correction in 2024, investors should continue to tread cautiously. More volatility is the likely outcome in the months ahead. And an early-year market correction can’t be ruled out, even if seasonal trends make an autumn pullback more likely.

For now, investors looking for yield can certainly get it in bonds. The question is how high bond yields will head before peaking. And if the 10-Year Treasury bond tops 5%, stocks may face more immediate downside.

 

To view the full technical analysis on markets right now, click here.

Cryptocurrencies

Bitcoin Magazine: 2025 Bitcoin Outlook: Insights Backed By Metrics and Market Data

Posted on by Andrew Packer

Bitcoin, the original cryptocurrency, was one of the standout winners of 2024. Bitcoin rose over 120%, beating the major market indices as well as assets like gold.

After rallying to over $108,000 in 2024, bitcoin then pulled back to the low $90,000 range. So far, this pullback looks like normal trading. The data for the bitcoin network points to further gains in the months ahead.

Looking at bitcoin’s realized price and its market cap, it’s likely that we’re nowhere near bitcoin’s four-year cycle peak. That suggests a further rally in 2025. Currently, levels are akin to the price in May 2017, about halfway through the 2016-2017 bull market in terms of price.

Looking at moving averages, the recent pullback has given bitcoin a breather from overbought conditions at the end of 2024. That allows the longer-term uptrend to prevail.

If the four-year bitcoin price cycle holds, there’s not only more upside, but potentially the biggest part of the upside. Each bitcoin cycle has a lower percentage gain relative to prior cycles. However, from what we know, it’s possible that bitcoin could roughly double to the $200,000 mark before hitting its 2025 peak.

The data shows that bitcoin’s move higher isn’t over yet. Investors can still position themselves for substantial returns in 2025.

 

To see the full data behind bitcoin’s likely move higher in 2025, click here.

Stock market

Tastylive: Why We Don’t Believe in Modern Portfolio Theory in 2025

Posted on by Andrew Packer

Investors have many ways to think about the market. Most investors follow modern portfolio theory (MPT). First developed in the 1950s, MPT looks at the market as a way of transmitting information.

When new information about a company comes to light, the news is immediately priced into markets. Consequently, MPT investors look at a market that is efficient, and challenging for investors to beat over time.

However, in reality, this theory is incomplete. It assumes that all traders are rational at all times. But we know that human beings are capable of decisions based on fear and greed. When that happens, markets may get oversold or overbought at times.

Today’s traders have more tools than ever to take advantage of those periods of extreme emotion. By leaning against markets at an extreme, they can make excellent returns.

Options trading can allow traders to hedge their portfolios in overly bullish markets. That could include selling covered calls against existing portfolio positions. Or it could mean buying put options to hedge against a big market swing lower.

Either way, markets generally look efficient on a daily basis. But markets are also more quick to react to events with the rise of options trading swinging the markets. Astute traders can pay attention to these swings and use them to profit.

 

To view the full video, click here.

Income investing

Dividend Growth Investor: Dividend Champions List for 2025

Posted on by Andrew Packer

Of the thousands of companies trading today, just 145 companies in the United States have a history of being a dividend champion. Those are companies that have increased a dividend payout for 25 consecutive years.

While past performance is no indication of future performance, a 25-year streak is tough to ignore. That covers extreme events like the pandemic and housing market meltdown. They’re businesses that can likely be held indefinitely, deferring capital gains taxes along the way.

Overall, six companies that were dividend champions at the end of 2023 failed to make the cut in 2024.  One company became acquired, one didn’t raise its payout, and four cut their dividends.

Fortunately, seven companies joined the list for 2024.

The list contains many well-known names like Caterpillar (CAT), the manufacturer of farm and construction equipment. Or a consumer goods giant like McDonald’s (MCD).

But many smaller names also make the list, including local power and water utilities or small banks. On that list investors may find Prosperity Bancshares (PB), and Middlesex Water Co. (MSEX).

Many dividend growth companies don’t have a high payout. But the dividend growth over time rewards long-term holders of shares. That makes dividend champions an ideal starting point for long-term investors who may eventually want income from their portfolios in the years ahead.

 

To view the full list of dividend champions, click here.

Stock Picks

Tom Nash: Buy These 7 Stocks In 2025 and Never Work Again

Posted on by Andrew Packer

With the start of a new year, it’s a good time to rebalance an investment portfolio. And look for companies that are undervalued by the markets, but also have positive catalysts. That combination can be powerful for great returns.

After a big two-year run in the stock market, some investors are getting skeptical. That’s a good sign that the market rally has more room to run. It’s when investors are blindly bullish that danger lurks.

That’s also why tech stocks may have more room to run. Part of that is structural. As large-cap companies, these firms benefit from passive investors pouring money into a stock index.

But many big-name tech companies have unique catalysts that may drive prices higher. One such company is Tesla Motors (TSLA).

The EV manufacturer is working to more broadly restructure as an AI play. And the big proof of concept will be using AI to finally make self-driving cars a functional reality.

And while it was already one of the top performing stocks of 2024, Palantir Technologies (PLTR) could further rally. The data analytics company has become the largest defense contractor by market cap, reflecting the rise of the digital world.

With further gains likely in big tech names, today’s buyers may be buying high, but not likely near the top.

 

To see the full list of seven stocks to buy for 2025, click here.

Stock market

A Wealth of Common Sense: The Roaring 2020s

Posted on by Andrew Packer

The decade is nearing its halfway point. And what a wild ride it’s been. First, 2020 kicked off with the pandemic, leading to one of the fastest selloffs in stock market history. Following that rally, stocks are up over 180%.

Of course, it wasn’t a straight line. 2022’s bear market resulted in stocks dropping 18% over the year, and nearly 25% from their peak. Typically, bear markets are spaced a bit further apart than two years.

Despite those big drops, stocks have now seen two years of over 20% gains. Typically, if earnings hold up, markets can continue higher, if at a slower pace. With the market up 70% since its 2022 low, a few years of flat performance would result in strong annualized returns of 14.5%.

Meanwhile, investors who stuck with a dollar cost average have seen returns closer to 17% annualized so far this decade.

In other words, even with the big drops, stocks have come back stronger than ever.

Given that overall performance, investors who stayed the course during market selloffs ended up coming out ahead. That’s a good thought to bear in mind in the next stock market selloff.

It’s likely that the second half of the 2020s won’t play out like the first half. Drawdowns are unlikely to be as bad as the pandemic selloff. And bouncebacks may not be as strong. But investors should continue to stay the course in fearful markets.

 

 

To read the full analysis, click here.