Brown Investment

The Business of Bitcoin Mining

Fri, 08 Dec 2023 05:13:20 GMT

Bitcoin mining companies play a pivotal role in the dynamic landscape of cryptocurrency. These firms dedicate substantial resources, cutting-edge technology, and formidable expertise to harness the cryptographic puzzles that validate and secure the Bitcoin network. Through powerful mining rigs and sophisticated algorithms, these companies compete to solve complex mathematical equations, earning Bitcoin rewards in the process. Here's a breakdown of what a Bitcoin mining company typically does:

Hardware Acquisition and Setup: Bitcoin mining companies acquire specialized computer hardware known as mining rigs or ASICs (Application-Specific Integrated Circuits). These rigs are specifically designed to solve complex mathematical puzzles required to validate transactions on the Bitcoin blockchain. The company sets up these rigs in data centers or facilities with adequate cooling and electricity infrastructure.
Mining Operations: Once the hardware is set up, the mining company connects its rigs to the Bitcoin network. Miners use their computational power to solve complex mathematical problems, a process known as mining. This involves verifying and bundling transactions into blocks, adding them to the blockchain, and securing the network. Miners compete to solve these mathematical puzzles, and the first miner to solve the puzzle and add a new block of transactions to the blockchain receives a reward in Bitcoin.
Maintaining and Upgrading Equipment: Mining hardware requires regular maintenance, including cleaning, hardware checks, and upgrades to ensure optimal performance. As the mining difficulty increases (due to more miners joining the network), mining companies might need to upgrade their equipment or expand their operations to remain competitive.
Electricity and Operational Costs: Bitcoin mining is energy-intensive. Mining companies need to manage electricity costs, which can be a significant part of their operational expenses. Companies often seek locations with cheap and reliable electricity to maximize profitability.
Transaction Fees and Revenue Generation: In addition to mining rewards (newly minted Bitcoins), miners also earn transaction fees from the transactions they include in the blocks they mine. These fees contribute to the revenue of Bitcoin mining companies.
Compliance and Regulatory Adherence: Mining companies must navigate regulatory frameworks and comply with legal requirements in the jurisdictions where they operate. This includes adhering to tax regulations, environmental standards, and other compliance measures.
Innovation and Research: Many mining companies invest in research and development to improve mining efficiency, reduce energy consumption, and develop new technologies that enhance their mining capabilities.

Overall, Bitcoin mining companies play a crucial role in the decentralized network by contributing computational power to secure the blockchain and facilitating the creation and circulation of new Bitcoins. They form the backbone of the decentralized system, ensuring transaction authenticity and network integrity. In an ever-evolving industry, these companies continuously innovate, striving for greater efficiency and sustainability while shaping the future of digital finance through their unwavering commitment to the mining ecosystem.

Leveraging Whole Life Insurance as an Asset: A Wise Financial Move

Fri, 10 Nov 2023 16:50:42 GMT

Securing Tomorrow: Let's Navigate the Landscape of Life Together.

Be Your Own Bank - Here’s How
Whole life insurance is often seen as a financial tool that provides a death benefit to beneficiaries in the event of the policyholder's demise. While this primary purpose is well-known, what's often overlooked is how whole life insurance can be leveraged as an asset during the policyholder's lifetime. In this post, we'll explore how whole life insurance can serve as an asset and a valuable component of your overall financial strategy.

Understanding Whole Life Insurance

Whole life insurance is a type of permanent life insurance that offers both a death benefit and a cash value component. Here's how it works:

1. Death Benefit: A whole life insurance policy provides a guaranteed death benefit, which is the amount paid out to beneficiaries when the policyholder passes away.

2. Premiums: Policyholders pay regular premiums, which are typically higher than those of term life insurance, but they remain level throughout the life of the policy.

3. Cash Value: A portion of each premium payment goes into a cash value account. This cash value grows over time on a tax-deferred basis and can be accessed by the policyholder.

Leveraging Whole Life as an Asset

Now, let's explore how you can leverage your whole life insurance as an asset:

1. Accumulating Cash Value: As you pay your premiums, the cash value within your whole life policy grows. This cash value is an asset that you can access during your lifetime for various financial needs, such as emergencies, education expenses, or retirement.

2. Tax Benefits: The cash value growth is tax-deferred, meaning you won't owe taxes on the gains until you withdraw the funds, providing potential tax advantages.

3. Policy Loans: Many whole life insurance policies allow policyholders to take out loans against the cash value. These loans are generally tax-free and can be repaid on flexible terms.

4. Diversification: Whole life insurance can be part of a diversified investment strategy, complementing other assets like stocks, bonds, and real estate. It adds a level of stability and safety to your portfolio.

5. Retirement Income: In retirement, you can use your whole life insurance's cash value to supplement your income. This can be especially beneficial if you've maxed out other retirement accounts.

6. Legacy Planning: Whole life insurance can be a valuable component of your estate planning, ensuring a tax-efficient transfer of wealth to your heirs.

Whole life insurance isn't just a safeguard for your loved ones in the event of your passing. It can be a versatile asset that you can leverage during your lifetime to meet various financial goals and needs. By accumulating cash value, enjoying tax benefits, and utilizing policy loans, you can make whole life insurance an essential part of your financial strategy. When used wisely, it can provide financial security and peace of mind both now and in the future. Consult with a financial advisor or CALL/TEXT: 6788789905 to determine the right approach for your specific situation.

Why All the Buzz about Earnings!

Tue, 17 Oct 2023 22:19:16 GMT

Earnings Season is upon us and it’s a crucial period in the financial world, during which publicly traded companies release their quarterly financial reports and this event is important for several reasons:

Investor Expectations: Earnings season provides us with a regular opportunity to gauge how well a company is performing. The market often reacts to these reports, causing stock prices to rise or fall based on whether a company met, exceeded, or missed expectations.
Stock Price Movement: The financial results and guidance provided during earnings season can significantly impact a company's stock price. Positive results can lead to an increase in stock value, while negative results can result in a decline. This can create trading opportunities for us.
Evaluation and Analysis: Earnings reports provide essential data for fundamental analysis. You can use the provided information to assess a company's financial health, growth prospects, and valuation. Basically it can assist you in making informed investment decisions.
Economic Barometer: Earnings season gives you insight into the broader economy. If a majority of companies report strong earnings and positive outlooks, it can be a sign of a healthy economy. Conversely, poor earnings across the board may indicate economic challenges.
Company Strategy and Performance: Earnings reports often include management discussions, which can reveal a company's strategies, challenges, and future plans. This information is valuable for understanding a company's long-term prospects.
Market Volatility: Earnings season tends to increase market volatility, as traders and speculators attempt to profit from short-term price movements and increased trading volumes.
Benchmark for Companies: Companies are often measured against their peers and industry averages during earnings season. It's an opportunity for companies to prove themselves and differentiate from their competitors.
Guidance for Investors: Earnings reports often include guidance for the upcoming quarter or year, which can be instrumental in setting expectations and helping you make decisions about your holdings.

In summary, earnings season is a crucial time for investors, analysts, and financial professionals to assess the health and performance of publicly traded companies. It provides a wealth of information that can impact stock prices, influence investment decisions, and offer insights into the broader economy.

What is Market Volatility?

Mon, 16 Oct 2023 13:14:28 GMT

If you follow the market, I'm sure you regularly hear the media reference market volatility. However, have you ever wondered what this truly entails. Well, let's talk about it....market volatility refers to the degree of variation in the price of a financial instrument or the overall market over time. It is a measure of how much the price of an asset or market index fluctuates. Higher volatility indicates that the prices are fluctuating rapidly and by larger amounts, while lower volatility means prices are relatively stable and don't change as dramatically.

A couple key points about market volatility:

Causes of Volatility: Market volatility can be caused by a variety of factors, including economic data releases, geopolitical events, changes in interest rates, corporate earnings reports, and unexpected news or events.

Volatility Index: The most well-known measure of market volatility is the CBOE Volatility Index, commonly known as the VIX. It is often referred to as the "fear gauge" and is used to assess investor sentiment and expectations about future market volatility.

Types of Volatility: There are two main types of market volatility:
Historical Volatility: This looks at past price movements and measures how much an asset has fluctuated over a specific period.
Implied Volatility: This is derived from options pricing and reflects market expectations about future price fluctuations. High implied volatility suggests that traders anticipate greater price swings.

Impact on Investments: Volatility can have a significant impact on investments. While higher volatility can provide opportunities to take profit from price swings, it can also increase risk. Long-term investors may find periods of high volatility unsettling, but they should remember that markets tend to have upward trends over the long run.

Risk Management: Managing risk in a volatile market is essential. Diversification, using stop-loss orders, and having a clear investment strategy can help protect your portfolio during periods of high volatility.

Volatility Trading: Options trading is a method that can be used for hedging or speculation during volatile times.

Market Sentiment: Public sentiment and investor behavior can contribute to market volatility. Panic selling or irrational exuberance can exaggerate price swings.

Government and Central Bank Policies: Economic policies, interest rate changes, and central bank actions can influence market volatility. For example, the interest rate hikes of which we are currently experiencing affect the cost of borrowing and the attractiveness of different asset classes.

However, market volatility is a normal part of financial markets. While it can create opportunities, it also presents risks. Investors and traders should be aware of these dynamics and adapt their strategies accordingly, whether their goal is capitalizing on volatility or preserving capital during turbulent times.

The World Changing Order: Is the Great Reset Happening

Sat, 14 Oct 2023 22:33:59 GMT

Are we witnessing the development of a new world order? Think about it...1)Currency Devaluation, 2) Increasing Wealth Disparity and 3) Global Warfare. These are three of the most pressing questions shaping our world today. We must give our attention to the intricate web of international relations, economic dynamics, and societal shifts occurring before our eyes.

Did you know?

Currency devaluation is the deliberate reduction in the value of a nation's currency and is a multifaceted issue with global implications, as it often raises questions such as:

Why do countries devalue their currencies?** Governments may devalue their currency to boost exports, reduce trade deficits, or make foreign debt payments more manageable.

What is the impact on global trade?** Currency devaluation can affect the competitiveness of a nation's exports, influencing global trade dynamics.

What are the risks and consequences?** Devaluation can lead to inflation, impacting the purchasing power of citizens and the confidence of international investors regarding our economy.

Did you know?

Wealth disparity is a growing concern in many societies. Some pertinent questions include:

What causes wealth inequality?** Factors like unequal access to education, job opportunities, and social safety nets.

What is the impact on societies?** High wealth disparity can lead to social unrest, reduced social mobility, and hindered economic growth.

Are there any solutions:** Governments, businesses, and individuals are exploring various approaches to address wealth disparity, from progressive taxation to philanthropy.

A war has already begun.

Global conflicts continue to shape the world order, prompting questions such as:

What drives global conflicts?** Root causes can vary from territorial disputes, to ideological differences or access to resources.

What is the impact on our lives?** Conflicts have devastating consequences, leading to displacement, loss of life, and long-term instability.

How can we resolve these conflicts?** Diplomatic efforts, peacekeeping missions, and international cooperation play pivotal roles in resolving conflicts and maintaining global stability.

It's important to recognize that these issues are interconnected. Currency devaluation can exacerbate wealth disparity, which in turn, may contribute to social unrest and conflicts. Understanding these interdependencies is crucial in shaping a more stable and equitable world.

How to Get Started with Trading Call Options

Sun, 09 Jul 2023 19:10:52 GMT

1. Adding Options Trading to Your Brokerage Account:

a. Log in to your brokerage account.

b. Navigate to the account settings or

preferences section.

c. Look for an option to enable options trading.

d. Follow the prompts and provide any necessary

information.

e. Review and accept the terms and conditions.

f. Once approved, you should have access to

options trading features.

2. Understanding Options Contracts:

An options contract is a financial instrument that gives you the right, but not the

obligation, to buy or sell a specific asset (such as stocks) at a predetermined price (strike

price) within a certain timeframe (expiration

date). There are two types of options

contracts: call options and put options.

3. Exploring Call Options and Profiting from Rising Stocks:

a. A call option is an options contract that gives the holder the right to buy the underlying

asset (stock) at the strike price before the

expiration date.

b. To profit from a rising stock using call options:

i. Identify a stock you believe will increase in

price.

ii. Determine the strike price and expiration

date for your call option.

iii. Purchase a call option for the chosen stock.

iv. If the stock price rises above the strike price

before the expiration date, you can

exercise the option or sell it for a profit.

v. If the stock price does not rise as anticipated,

you may lose the premium paid for the call

option.

*Remember, options trading involves risks, and it's essential to educate yourself thoroughly before engaging in this type of trading. Consider studying options strategies, risk management techniques, and consulting with a financial advisor or professional for personalized advice.

Independence Day: Juneteenth vs. 4th of July

Tue, 04 Jul 2023 21:16:24 GMT

Independence Day: Celebrate Freedom

"Economic Equality is Freedom"

Independence Day, known colloquially as the Fourth of July, is a federal holiday in the United States commemorating the Declaration of Independence , which was ratified by the Second Continental Congress on July 4, 1776, establishing the United States of America .

The Founding Father delegates of the Second Continental Congress declared that the Thirteen Colonies were no longer subject (and subordinate) to the monarch of Britain , King George III , and were now united, free, and independent states. ^[1] The Congress voted to approve independence by passing the Lee Resolution on July 2 and adopted the Declaration of Independence two days later, on July 4. ^[1]

Independence Day is commonly associated with fireworks , parades , barbecues , carnivals , fairs , picnics , concerts , ^[2] baseball games , family reunions , political speeches , and ceremonies, in addition to various other public and private events celebrating the history, government, and traditions of the United States. Independence Day is the national day of the United States. ^[3] ^[4] ^[5]

Source: Wikipedia

How can a national holiday be declared if all Americans are not free?

Some Americans now argue that the real Independence Day is actually Juneteenth , also known as Emancipation Day or Freedom Day, which is a commemorative holiday celebrated annually on June 19th in the United States. It holds immense significance for the Black community as it represents the liberation of enslaved African Americans and serves as a powerful reminder of the struggles, resilience, and achievements of Black people throughout American history. In this blog post, we delve into the historical background of Juneteenth and explore its enduring significance to Blacks in America.

A Glimpse into History :

The story of Juneteenth dates back to June 19, 1865, when Union General Gordon Granger arrived in Galveston, Texas, and issued General Order No. 3, proclaiming the end of slavery in the state. This announcement came two and a half years after the Emancipation Proclamation was signed by President Abraham Lincoln. The delayed news of freedom reached Texas due to various factors, including the resistance of slave owners and the absence of Union troops to enforce the proclamation.

Embracing Freedom and Commemorating Heritage:

Juneteenth celebrations emerged as African Americans in Texas and neighboring states joyously embraced their newfound freedom. The holiday initially took the form of community gatherings, church services, and the retelling of stories of emancipation and resilience. Over time, these festivities expanded to other states and grew to include parades, picnics, barbecues, music, dance, and educational events that highlight Black culture, heritage, and achievements. Sound familiar?

Symbolizing Triumph over Adversity:

Juneteenth serves as a poignant symbol of triumph over the deeply rooted oppression and dehumanization experienced by enslaved African Americans. It reminds us of the indomitable spirit of those who persevered through unimaginable hardships and fought tirelessly for their rights and equality. By celebrating Juneteenth, the Black community honors the sacrifices made by their ancestors while reflecting on the progress achieved and the work that lies ahead. The question remains: How much progress has truly been made given the significant wealth gap in America? After all, economic equality is where the starting blocks to freedom begin.

Education and Reflection:

Juneteenth provides an opportunity to educate and engage in meaningful discussions about African-American history. It prompts reflection on the ongoing struggle for racial justice, equality, and the eradication of systemic racism. By learning about the legacy of slavery and the contributions of Black individuals and communities, we can foster empathy, understanding, and allyship, ultimately working towards a more inclusive and equitable society.

Empowerment and Unity:

Juneteenth has become a unifying force, bringing people from diverse backgrounds together to acknowledge the shared history and the ongoing quest for justice. The holiday encourages individuals and communities to actively participate in promoting racial equality, social justice, and inclusivity. By amplifying Black voices and supporting Black-owned businesses, we contribute to the empowerment and economic growth of the Black community.

Juneteenth is a powerful commemoration that acknowledges the struggles, resilience, and achievements of African Americans in the face of systemic oppression. This holiday celebrates freedom while reminding us of the ongoing work required to achieve true equality and justice. By honoring Juneteenth, we not only pay tribute to the past but also commit to shaping a better future— one that is inclusive, equitable, and embraces the rich cultural heritage of all Americans.

Here, at Brown Investors, we work tirelessly to bridge the gap of equality through education in the stock market and cryptocurrency. Learn more about the offerings and services with browninvestors.com today. Inequality isn't a Black people's problem; it's every American person's problem so spread the word and share this blog post.

#juneteenth #equality #freedom #independenceday #july4th

The SAFE Banking Act and Cannabis: Will the Multi-Billion Dollar Industry Finally Get Unlocked?

Wed, 29 Mar 2023 14:06:16 GMT

With the legalization of cannabis in 21 states and the district of Columbia, the legalization movement continues gaining traction in the United States. Along with this progress, the passage of the SAFE (Secure and Fair Enforcement) Banking Act is another step towards unlocking the multi-billion dollar industry of cannabis legalization. In this blog post, we'll be looking at the timeline and importance of the SAFE Banking Act in the quest for nationwide legalization, as well as the history of the cannabis legalization movement.

What is the SAFE Banking Act?

The Secure and Fair Enforcement (SAFE) Banking Act began as a stand-alone bill and was first proposed in 2013. Most recently, the SAFE Act of 2022 has been added as an amendment to the National Defense Authorization Act. This amendment protects financial institutions that offer services to legitimate cannabis-related businesses. It aims to reverse current laws that prohibit financial institutions from providing services to cannabis-related businesses. It will allow the issuing of loans and extending credit to cannabis-related businesses that did not previously have access. It will also help ensure that those working in the cannabis industry have access to legal counsel.

The Safe Banking Act was approved by the House of Representatives in June 2022 and is now awaiting further action from the Senate. This act is an important step in the quest for nationwide legalization of Cannabis, as it would give banking access to businesses in the industry. If passed by the Senate, the bill will be sent to President Biden for approval and implementation. As the nation continues its march towards nationwide legalization, this is an important step forward in removing barriers for businesses in the cannabis industry.

Importance of the SAFE Banking Act in the quest for nationwide legalization

Cannabis has been a controversial topic for many years, but in the last few decades, a significant shift has been taking place in public opinion and acceptance. Many states have started to recognize and legalize cannabis for both medical and recreational use, and the movement continues to gain momentum. With the SAFE act one step closer to being passed, cannabis is one step closer to becoming a legal industry nationwide. This crucial step towards nationwide acceptance will allow businesses to access the banking system and allows them to process payments and access funds without fear of criminal or civil liability. This will help open up the multi-billion dollar industry and unlock its growth potential.

Canopy Growth Corporation

Canopy Growth Corporation, (Ticker: CGC,) is a Canada-based cannabis company founded by Bruce Linton and Chuck Rifici in 2013. The company was given the name Canopy Growth Corporation in 2015 and became the first federally regulated, licensed, publicly traded cannabis producer in North America.

Canada's first legal cannabis sale was made at midnight by CEO Bruce Linton in St. John's, Newfoundland. The Canopy Growth Corporation and the cannabis industry as a whole have been making waves in the stock market. Investing in Canopy Growth provides a safe way to capitalize on the opportunities presented by the SAFE Banking Act and the potential for nationwide legalization of Cannabis.

With the SAFE Banking Act approved by the House of Representatives, the timeline to move it to the Senate is looking promising. As one of the most established companies in the legal marijuana industry, Canopy Growth is perfectly positioned to take advantage of the financial opportunities that nationwide legalization would bring, making it a safe investment for those looking to cash in on this booming market.

How to Learn More

If you want to learn what other cannabis companies should be on your watchlist, the Brown Investors Cannabis Investment Guide is a must-have!

With the Brown Investors Cannabis Investment Guide, you can get up to speed on what's happening with the Safe Banking Act and gain valuable insight into which cannabis companies should be on your watchlist. Contact us to joing the membership and learn how to make informed decisions about where to invest!

Short Squeezes and the Impact of Float and Volume

Fri, 17 Mar 2023 17:54:42 GMT

A short squeeze can generate huge returns, but investors must know how to spot it and employ the right trading strategy. It is one of the most controversial and popular topics among traders. This is because it has a potential for high losses or profits depending on which side you are on.

This article will explain short squeezes and how they relate to float and volume.

What is a Short Squeeze?

A short squeeze is an unusual market phenomenon that happens when traders bet that a stock will fall, but it rises instead. This rise in stock prices forces many short sellers to close their positions to cut losses. However, this move pushes the price even higher.

In short-selling, investors borrow stock and then sell it, hoping to profit by repurchasing it at a lower price. This phenomenon begins when a heavily shorted asset rises in price unexpectedly. Since short sellers close their positions by buying, their exit pushes the prices higher.

What is the Float?

Float is the total number of shares available for the general public to purchase and sell. It excludes the restricted stock that insiders hold. But, if insiders sell their stock in the market, it becomes part of the float.

A company's float is calculated by subtracting the restricted stock from the company's outstanding stock. Restricted stock is stock under a lock-up period, and thus investors cannot buy or sell it.

The company is not responsible for how the investing public trades shares within the float. Floats can help investors understand a company's ownership structure. Restricted shares indicate the level of control insiders have.

What is Volume?

Volume is the total quantity of stocks, shares, or contracts buyers and sellers exchange for a specific asset or security. It is measured on stocks, contracts, options, bonds, futures contracts, and other commodities.

The trade volume measures a market's liquidity and activity during a specific period. A higher trading volume shows buyers and sellers transact more shares for a particular asset during a specific period. It means better order execution and more liquidity and is thus better than lower volumes.

The Relationship Between Float and Volume

Low-float stocks are generally more volatile than stocks with high float. This is because it is hard to find buyers or sellers with few shares available, leading to a low trading volume.

The increased volatility of stocks with a low float makes them ideal for day trading. They provide excellent opportunities for position trading or scalping. However, this doesn't mean that investors automatically trade them; they must consider other factors.

When the trading volume exceeds the float, it means that a trading catalyst is causing a high buying and selling activity. This trading phenomenon is common with companies with low floats and tends to appear during important events.

Events that can boost the trading volume include an initial public offering (IPO), a takeover bid, or an announcement of corporate earnings. Such events can cause the stock price to go up exponentially.

How Low-Float, High-Volume Stocks Experience Short Squeezes

Low-float stocks are some of the most volatile and have potential short-term gains if they experience a short squeeze. Since these stocks have fewer shares trading, an imbalance in demand and supply can skyrocket the share price. Likewise, the price can fall as quickly as it can rise, making them riskier.

Stocks with low float and high volume can be challenging to short. This is because they are hard to borrow and can incur a cost. Moreover, they need higher maintenance margins and borrowing rates. Short sellers are often trapped when there are no more shares to borrow. This forces them to chase stocks even higher in the open market, triggering a short squeeze.

Conclusion

Short squeezes accelerate stock prizes, presenting opportunities for investors to grow their portfolios. Contrarian investors anticipate this phenomenon and buy these stocks. If you are interested in short squeezes, join our membership and the conversation.

DBV Technologies: Company Spotlight

Fri, 10 Mar 2023 17:23:11 GMT

DBV Technologies is a biopharmaceutical company that focuses on developing treatments for food allergies. The company is based in Montrouge, France, and is known for its innovative approach to treating food allergies through the use of its proprietary Viaskin technology. This technology involves delivering allergens through the skin, rather than through oral consumption, to desensitize patients to the allergens and reduce the likelihood of allergic reaction.

Viaskin Peanut, Viaskin Milk, and Viaskin Egg make up DBVT's line of allergic treatment products.

The emergence of the infringing allergen into the bloodstream could lead to serious or life-threatening allergies, among other anaphylactic shocks. Therefore, this technology treats patients, like children and infants experiencing severe food allergies, as safety is a top priority for these patients.

DBV Technologies Brief Background

In 2002, Dr. Pierre-Henri Benhamou, engineer Bertrand Dupont from Paris' Arts & Métiers ParisTech, and Professor Christophe Dupont formed DBV Technologies. Together they funded the inaugural start-up budget. However, between December 2003 and January 2011, DBV Technologies secured venture capital worth about €40 million. Again, NYSE Euronext's initial public offering in March 2012 brought around €40.5 million (Euros). Currently, Pascal Wotling is the Chief Technical Operations Officer, and Daniel Tassé is the Chief Quality Officer.

DBVT’s Viaskin Peanut Patch & the FDA Approval

In August 2020, the FDA sent a Complete Response Letter (CRL) that aligns with DBVT's Biologics License Application (BLA) for Viaskin Peanut (DBV712 250 g). An experimental, non-invasive, once-daily epicutaneous patch to manage peanut allergy among children aged 4 to 11 years.

DBVT addressed the requirement for patch revisions, which was the FDA's primary concern raised in the CRL, as a viable remedy. The FDA consented to DBV's assertion that a revised Viaskin Peanut patch may be a suitable strategy, so they did not regard it as a new product element. However, this was conditional as the patch's occlusion chamber and the peanut protein dose of 250 g (roughly 1/1000 of a peanut) stayed the same and worked as intended.

Once again, DBV notified the FDA of its intention to start a pivotal Phase 3 clinical research in the targeted age group for a modified Viaskin Peanut patch, VITESSE, in the 4th quarter of 2021. The existing Viaskin Peanut patch is rectangular, whereas the modified patch is circular and is about 50% bigger.

Notably, the EPITOPE research included the square-shaped current VP patch. For upcoming regulatory or BLA developments using the EPITOPE data, DBV may continue using the current VP patch.

FDA Demands

The FDA asked for adjustments to the VITESSE guidelines in the Partial Clinical Hold (PCH) letter, such as:

An upsurge in trial subjects receiving active treatment.
Inclusion of a statistical test for patch adherence evaluation.
Reclassification of a few negative incidents as negative incidents of unique interest.
Minimum daily wear time changes.

After the FDA imposed a hold in September, it verified DBV has successfully resolved each clinical hold problem mentioned in the PCH letter before dropping the PCH. This made DBV Technologies' (DBVT -2.14%) stock rise by 19% only after it disclosed that the FDA partially withdrew a clinical hold on late-stage clinical studies.

DBV intends to start different safety research with about 275 extra participants. However, the added safety research may not influence the company's financial runway estimate. DBV also expects to screen VITESSE patients in the initial quarter of 2023, with the last screening in the second half of 2024 and findings expected in the third quarter of 2025.

Invest with Brown Investors Today

At Brown Investors, we seek to expand financial literacy reach, while also providing investment tools and portfolio management for generational wealth creation. Contact us today for more details on how to become a member and let us help you find a promising investment.

Inflation and the Value of the Dollar

Tue, 28 Feb 2023 20:02:05 GMT

There is a positive correlation between major stock players in the U.S. stock exchanges and the value of the dollar.

As the dollar's value rises in the global market, stock prices also rally. According to data on S&P 500, in the last two decades, its value has positively correlated to the value of the dollar. About 40% of the time , the S&P index has risen occasioned by the dollar's rise.

How U.S. Dollar Value Impacts Stock Indices

According to a market's forces of demand and supply, a currency increases in value with increased global demand. Another instance would be deflationary measures by a country's central bank by shorting the currency's supply in the market. Therefore, an intrinsic rise in the value of the dollar will increase the value of U.S. stocks . The primary reason is investors buy stocks using the U.S. Dollar.

U.S. Dollar Value vs. Stock Prices

Here are examples to illustrate the correlation between the value of the dollar and U.S. stock prices.

The share portfolio heavily relies on imported raw materials and energy in the manufacturing sector. A large pool of manufacturers in the U.S. rely on value addition on imported essential commodities. When the value of the dollar depreciates, its purchasing power declines. As a result, the manufacturers will dig deeper into their dollar reserves to buy the same quantity of commodity as before, thereby recording low-profit margins. Companies that do not mitigate their risk against their reliance on the prices of imported commodities would expose their investors to foreign exchange risk.

Alternative Scenario to Leverage the Value of the Dollar

Another scenario would be the diversification of the investment portfolio. It is essential to diversify investment to different sectors of the economy. Moreover, a declining dollar would have both positive and negative returns on investment to an investor's portfolio. Notably, the reliance on the dollar for purchases directly affects the profitability of a company's stock. Diversification into different sectors of the economy will balance out the positive and negative effects of a decline in the value of the dollar.

The Smart Case Scenario

As an exporter of U.S. manufactured commodities, you stand to do well if the U.S. dollar value depreciates. After its depreciation, exporters get more U.S. dollars after foreign exchange transactions in the international market.

Furthermore, a low-valued dollar makes goods manufactured in the U.S. more competitive globally.

Impact of Inflation on the Value of the Dollar

Inflation decreases the dollar's value over a trading period. It increases the prices of commodities over time, substantially reducing the number of goods customers can buy with the same amount of money. The time value of the dollar decreases in an inflationary period.

Apple Inc. Stock During Inflationary Periods

When Apple Inc. [Ticker: AAPL] initially IPO'd in late 1980, the United States was in the middle of a recession. Despite those financial constraints, AAPL made it through the recession and in less than two years after it's Initial Public Offering, the stock gained 65%. If you had invested just $1k in APPL stock in mid 1982, your stock would roughly be worth 3.7 million dollars.

Apple Inc. has experienced the same type of growth over the last four years of economic slowdown and worldwide pandemic. Since 2019, AAPL has almost 400X'd in value, despite the inflationary conditions we've been experiencing.

Are you interested in consulting a financial advisor and learning how we are capitalizing on the next IPO during this high inflationary period? Schedule a consult today and take the Riskalyze assessment .

Is Crypto Dead? Why Bitcoin Is Still Considered a Store Value

Mon, 30 Jan 2023 13:29:56 GMT

Bitcoin had a challenging year in 2022, which caused some potential investors to wonder if continuing to rely on cryptocurrency is a good idea. However, predictions surrounding how Bitcoin is likely to change in 2023 indicate that it still has potential as a store value for the right investors.

The experimental nature of cryptocurrency means that crypto markets are generally highly volatile. Creating a new type of currency that is largely based on speculation from the beginning naturally means that there is a higher level of risk associated with this type of investment than there is with more established currencies, and it is not uncommon for a particular event to have a significant negative impact on the value of Bitcoin and other cryptocurrencies. However, this downturn is often temporary, and many crypto investors have found that they can regain their investments within a relatively short time after these events.

The Future of Bitcoin

The nature of Bitcoin makes it relatively unpredictable, but it can still have a feasible future. Here is an overview of why it is common for the value of Bitcoin to fluctuate and what these fluctuations may mean in 2023.

Fluctuation of Bitcoin

Bitcoin and other types of cryptocurrency may be unpredictable by nature, but this does not mean that they cannot be used as viable investment opportunities. This type of currency may be prone to experiencing significant ups and downs at a higher rate than currencies that are more established and better understood by the general public, but the fact that there is significantly less regulation surrounding this type of investment means that Bitcoin and other cryptocurrencies also have a higher level of potential to recover from low points within a shorter amount of time. Bitcoin's most significant investors are often the type of people that are more likely to take risks and are more comfortable with the complicated nature of cryptocurrency, which means that they are likely to continue to stick with this investment option through future ups and downs.

Why There Is Still a Case for Using Bitcoin

Predictions about ways that Bitcoin is likely to change in the coming months show that a bright future is still possible for cryptocurrency. Here are three reasons why continuing to use Bitcoin is likely a good idea!

Increased Regulation

Bitcoin and other forms of cryptocurrency have been significantly less heavily regulated than other investment options since their inception. Although this concept has had both benefits and drawbacks for experienced investors, the higher level of regulation that is predicted to come in 2023 has the potential to help stabilize the constant fluctuation of the value of Bitcoin and make choosing this investment method a somewhat less risky option for potential investors that are less comfortable with the quickly changing nature of today's cryptocurrency.

Global Adoption of Bitcoin

Although Bitcoin has already gained a reputation as an investment option that is available to people around the world, it has not yet reached the maximum level of worldwide use that we could begin to see in the near future. Investing with currencies that are only used in a limited number of countries certainly has drawbacks, but the idea of a virtual currency that can be used by anyone without the hassle of exchanging currency from country to country is quickly gaining traction. Bitcoin is predicted to continue to grow on a global scale in 2023, and this high level of potential use means that this type of investment still has the potential to recover from the challenges it has faced in 2022.

Disaggregation of Bitcoin Exchange

It's no secret that keeping too much power consolidated within one company or other entity can be devastating if something goes wrong, and Bitcoin is predicted to branch out and spread various elements of its exchange, brokerage, custody, and other areas among a larger number of key players in 2023. This means that a higher level of protection is coming from the potential dangers that can be associated with having smaller entities in charge of more than they should be, which means that the entire process has the potential to become safer for a wider range of users in the near future.

At Brown Investors, we are here to help you navigate the challenges and benefits of Bitcoin and other cryptocurrencies to make the best decisions for you. Take the leap into wealth building today by investing in our Cryptocurrency 101 course. Contact us today to start the process of investing with confidence!

IPOs: Why You Should Consider the Risks Beyond the Hype

Thu, 19 Jan 2023 11:18:26 GMT

The IPO market has seen an increasing level of activity in recent years. It has attracted many investors looking to buy shares in companies like Tesla or Facebook. There is a good reason for this hype, as it is immensely profitable to bet on the right stock when it first trades as an IPO. You get an opportunity to invest in a high-growth company early in its life cycle.

Tesla shares have skyrocketed while Google and Amazon stocks remain high. However, just because other companies have shown growth in the past doesn't mean IPO investment has no risks. Although the investment sounds enticing to an average investor, it doesn't always live up to the hype. The reality sometimes differs from the surrounding buzz.

What is an Initial Public Offering (IPO)?

An Initial Public Offering (IPO) is the process of a private company becoming publicly traded. It is a public offering where private firms sell shares to institutions, who then sell their shares to the public. Private companies schedule IPOs when investors feel good about their financial prospects and are likely to take risks with the new venture. They will list the shares on a stock exchange, making them available for the public to purchase.

Many investors think of IPOs as significant money-making opportunities. While they are undeniably exciting, understand that IPOs are risky investments that deliver inconsistent returns over a long time.

The Reason Companies Go Public

Companies choose to go public mainly to generate capital to help further their growth. Smaller companies use IPOs to raise capital for expansion, while large enterprises choose to go public because they need another source of capital. It's an opportunity for the public to buy shares in a company.

Companies sell shares to raise capital and use the proceeds to expand business or pay off debt. Going public also increases the liquidity of a firm. For example, Facebook debuted in May 2012 selling shares at $38 and now they trade at around $288.

The IPO also gives companies several secondary advantages, such as boosting a company's public profile. Organizations may want the gravitas that comes with being a public company, which helps them secure better terms from lenders.

Risks Associated with IPO Investing

IPO investing doesn't always have a happy ending since many IPO companies struggle. Most IPO companies are not profitable and lose money at the point when they go public. About 80% of US companies that went public in 2018 had negative earnings before their IPOs.

There is no guarantee of getting profits after investing in IPOs. It is an offering process with no guaranteed returns as far as stock prices. Even when a company's early returns are promising, price falls are risky. For example, Uber went public in May 2019 at a share price of $41.57 and currently sits below this share price.

An investor also runs the risk of receiving less amount than initially invested. There are many cases where the listed price of a share is less than the purchase price. External factors can affect the price, while other variables can determine the profitability of your investment. As an investor, you risk buying high if the IPO offering is set too high or the stock price jumps sharply after it trades. This happens when the stock is over-hyped or over-valued.

Most IPOs are upstart companies that have more risks than established corporations. They lack regulatory filings or earnings reports to research. This lack of transparent information can be a considerable risk.

Overall Synopsis

IPO investing can be rewarding but carries greater risk because of a smaller sample size of data. Perform due diligence when investing in an IPO as they have their share of risks involved, which you must address for stable fund growth. Ensure you do your research and avoid the temptation of getting caught in the moment's excitement. For example, determine if the offering price set by underwriters is reasonable or inflated.

When investing in an IPO, beware of the risks involved. It's not that all IPOs are bad investments; it's the fact that most aren't good. To find out the companies that you need on your watchlist, invest in the Brown Investors IPOs Explained investment guide. For even more exclusive stock picks and investment updates, join the Brown Investors Membership .

Why Healthcare is the Best in Withstanding Inflationary Periods

Thu, 12 Jan 2023 04:42:51 GMT

When inflation became a reality in the aftermath of the pandemic in late 2021, analysts argued that it would be transitory. However, over the past months, inflation has become persistent, hitting 7.1% in November 2022. The consumer price index has constantly surged at the fastest rate since the Great Recession, hitting 8.5% in July 2022 from 0.8% in May 2021.

Surprisingly, while consumers and other industries continue to feel the pinch of inflation, the healthcare sector has been significantly resilient to the changes. Since the demand for healthcare is non-discretionary, the industry's anti-inflationary nature makes it one of the best investment options with relatively consistent performance that can earn you substantial inflation-adjusted returns.

Healthcare Investing in General

You shouldn't be surprised that healthcare stands out in hedging inflation. The demand and the pricing power of healthcare are relatively immune from inflationary pressure. In addition, contracts between healthcare organizations and insurance companies last for three years. This implies that the contract will take relatively the same period to be renegotiated.

In addition, healthcare organizations pass the increasing cost of resources to insurance companies. In response, payers pass the cost to employers and consumers, cushioning the healthcare sector from recession.

As inflation takes a toll on other industries, investing in healthcare now is a good decision. Firstly, demand for health care remains constant or increases during economic downtimes — you're not likely to avoid medical care due to rising inflation.

Secondly, healthcare's unique nature has portrayed its resilience to financial pressure. For instance, the national health expenditure has increased by around 4% annually since 2016, and the federal government projects a steady increase of 4.9% annually in 2021-2028. In addition, while the overall CPI surged by 8.5% in the past year, medical care expenditure rose by just 4.8% in the same period.

Historical Trends for Healthcare Companies During Economic Recessions

While investing in many industries during inflation risks losing your finances, healthcare investing during economic downtimes shows constant profit trends for major investment companies, including the three detailed below. Another stock to take notice of, KALA Pharmaceuticals , doubled our community members return on investment. 2023 could be a great year for the right Healthcare investments.

McKesson Corp [Ticker: MCK]

MCK is one of the top three pharmaceutical distributors in the U.S., according to Deloitte's 2019 report. The company — with a market capitalization of $53.3 billion — is a healthcare service and information technology corporation.

MCK anticipates earning growth of 10.1% in the next five years. The company surpassed earnings estimates in three of the trailing four quarters and missed only once, with the average missed being 13%. In addition, the company's earnings are 7.1% against the overall industry's 4.7%.

UnitedHealth Group Inc [Ticker: UNH]

UNH is the largest single entity in the health insurance space on market capitalization in the U.S. The company's footprints in healthcare range from health technology, health insurance, and virtual care to data management.

The company is a good investment option — the balance sheet has shown great anti-inflationary qualities during economic downtimes. For instance, as companies across industries saw their balance sheet weaken amidst current inflation, UNH recorded revenue growth of 13%, from $71.3 billion to $80.3 billion in the past year. In addition, the company's operational revenues recorded a 19% growth in the same period.

Abbott Laboratories [Ticker: ABT]

ABT is a medical device company dealing in enteral nutrition products, medical diagnostic test kits, and generic medicine.

Investing with ABT promises higher returns in the current economic tension. For instance, the company stock in 2022 increased by 60% , a record increase from 2018. In addition, the company's revenue grew by 46% to $44.5 billion over the past year.

Plan Your Investment with Brown Investors

Whether you're a beginner investor or looking for expert guidance on your retirement investment during economic downturns, you must use reliable expert information to avoid risking your finances. Brown Investors are experts in bridging the financial literacy gap through education and investment resources to begin a cycle of generational wealth.

If you've invested in our Long Term Playbook , you would know that Abbott has been one of the highest compounding growth companies that is part of the S&P 500. To be in the know about stocks like these, join our membership and don't miss out on another investment like this!

Investing Using Fundamental Analysis vs. Technical Analysis

Fri, 30 Dec 2022 07:31:24 GMT

Investing is a subject that is often debated, and even the most seasoned investors will tell you their opinion on what the best approach to investing is. While fundamental analysis focuses on the financial data and market conditions surrounding a company (mostly quantitative), technical analysis includes the price and volume of certain stocks, which can help predict a stock's movement (mostly qualitative).

Both ways of analyzing stocks are important because they offer different insights into a company. In this article, we look at the importance of using both fundamental and technical analysis to help you gain insight into a company's performance.

What is Fundamental Analysis?

Fundamental analysis studies economic factors that drive a stock's price. These factors include the company's financial statements, management, and competitive environment. Fundamental analysts believe stocks should be bought when trading at a discount to their intrinsic value.

Investors who use fundamental analysis typically perform extensive research before making an investment decision to determine whether or not an asset is worth buying. This research includes studying current and historical market data, analyzing balance sheets and income statements, and reading news stories about the companies in question.

Conducting this type of analysis requires a high level of expertise that only some possess, which is why most investors choose to hire professionals who specialize in this area of investing.

What is Technical Analysis?

Technical analysis is the study of market behavior through price charts. Some traders use charts to identify trends, chart patterns, and signals. The charting tools used by technical analysts include bar charts, line charts, point-and-figure charts, candlestick charts, and others.

Technical analysts use these tools to determine if an asset's price is currently overbought or oversold. They also look at moving averages and relative strength index (RSI) indicators to determine if a trend is likely to continue or reverse.

Technical analysts often use support and resistance levels to help them determine when to buy or sell an asset. These levels are created by drawing trendlines on a chart that connect price highs or lows over time. Once the price reaches one of these lines, it can be expected to bounce off the line or continue downward until it hits another level of support or resistance.

When using technical analysis for investment purposes, it's important to remember that past performance does not guarantee future results. For example, if an indicator predicted a downturn in the stock market last year but prices continued to rise, it would be inaccurate for an investor to use this indicator alone.

The Similarities Between Fundamental and Technical Analysis

There are many similarities between the two types of analysis. Here are some of them:

Both provide a view of the market and help investors make informed decisions.
Both fundamental and technical analysis can be used to help identify new opportunities or improve existing positions in the market.
Both are used to evaluate risk and reward in an investment decision. For example, suppose you believe a stock will go up because it has underperformed its peers over the last 12 months. In that case, both fundamental and technical analysis can help you decide whether or not it's worth buying now or waiting until it gets closer to its trend line before making a purchase.
Both look at historical data when making decisions about future performance. Those who use fundamental analysis may be interested in how well a company has performed over time. Those who use technical analysis will examine daily price patterns to decide future performance. Both methods can be useful for investors who want more certainty about their investment choices.
Both types of analysts measure volatility over time using charts.

The Differences Between Fundamental and Technical Analysis

Both tools are useful but differ significantly in how they approach the market.

Fundamental analysts use historical data to forecast the stock market's future performance. In contrast, technical analysts use charts to identify price trends and make forecasts about the future performance of stocks.
Fundamental analysts do not rely on charts or technical analysis when making investment decisions; they base their decisions primarily on company-specific information such as earnings reports or sales figures.
Technical analysts rely heavily on chart patterns and indicators such as moving averages or Bollinger bands to predict future price movements. The most common types of technical indicators include moving averages (MA), relative strength index (RSI), and the stochastic oscillator (STO).

Bottom Line

Fundamental and technical analysis are two approaches to investment and asset management. Fundamental analysts rely on data related to an underlying financial instrument, such as the company that issued the security and the market in which it trades. They also consider their research when making investment decisions. Some fundamental analysts will conduct their quantitative research, such as market research or financial modeling, to identify undervalued assets or weak points. If you want to get started on the road to long-term wealth, take a look at our Investing 101 course which gives you the tools to get started. Have any questions? Feel free to contact our team.

Bull Vs. Bear Market: The Ultimate Comparison

Tue, 20 Dec 2022 15:47:09 GMT

'Bull' and 'bear' are two terms used in the investing world to describe the prevailing trends in the stock market. Both terms denote how the stock market is doing, whether it's going up or down in value. The bull and the bear are parts of the stock market cycle. Therefore, as an investor, understanding these two scenarios will help you make sound investment decisions that will positively impact your investment portfolio.

What is a Bull Market?

A bull market refers to a financial situation when the prices of stocks and tradable assets rise by at least 20% from a recent low over a sustained period. Bull markets usually occur due to a thriving economy and high employment levels. Such a market indicates that investors have faith in the government and the stock market. During a bull market, there is high investor confidence and more income for people to invest. Generally, bull markets are frequent and last longer than bear markets.

What is a Bear Market?

A bear market refers to a period when prices of stocks and securities fall by at least 20% from a recent high. Bear markets occur due to slow economic growth and high unemployment rates. During this period, investors' confidence is low, and they start looking for ways to diversify their investment portfolio in less risky assets. Even though not always, the downward trend during bear markets may be accompanied by a recession.

Identifying the Bull and the Bear

The best way to make money during bull and bear markets is by knowing how to spot when the stock market is appreciating or depreciating. This is usually the best time to enter or leave the stock market.

During a bull market, you can expect the following to happen:

Rising wages
Increasing discretionary spending
Increasing dividends
Rising corporate earnings
High employment rates

On the other hand, you can identify a bear market if the following occurs:

Declining wages
Declining corporate earnings
Declining asset prices
High unemployment rates
Decrease in discretionary spending
Companies and individuals filing for bankruptcy
Increased acquisition of distressed assets by wealthy companies

Ways to Profit in a Bull Market

Investors who want to profit from a bull market should invest in the rising stock prices using the following ways:

Long positions

A long position in the stock market refers to buying and holding a stock or security with an expectation that it will increase in value. During a bull market, you can profit by purchasing a stock or security at a low price and then selling it when it has reached its peak.

Call options

A call option refers to a contract between a buyer and a seller for the former to purchase a stock at an agreed price (strike price) until an agreed period elapses. In this contract, the buyer has the right but not the obligation to purchase the stock. On the other hand, the seller must sell the stock to the buyer if the latter exercises the call option.

During a bull market, it's likely for the stock price to rise above the strike price. When this happens, the buyer can exercise the call option, buy the stock at the low strike price, and then sell it at a higher price on the open market. By doing so, the buyer will make a profit.

Long ETFs

Almost all Exchange-Traded Funds (ETFs) follow a certain market average. As an investor, you can purchase a low-priced ETF if you anticipate the market average it follows to rise. For instance, if the Dow Jones Industrial Average (DIJA ) rises by 15%, your ETF will likely increase in value by almost the same.

How to Profit in a Bear Market

Bear markets are known to cause people a lot of stress. However, investors can still profit in a bear market through the following ways:

Short positions

A short position refers to when an investor borrows and sells a stock or security with the anticipation that it will fall in price. Investors do this intending to repurchase the stock or security at a lower price to cover the short position and make a profit.

Put options

A put option is a derivative that gives you the right and not obligation to sell a stock or security at an agreed price (strike price) before an agreed period elapses. If the stock price falls below the strike price, you can sell it at the strike price and make a profit. You also have the option to sell the put option itself and make a profit.

Short ETFs

Short ETFs, also known as inverse ETFs, generate returns that are inverse to the decline of a certain market average. Suppose you purchase an inverse ETF that follows the S&P 500 . If the S&P 500 falls by 20%, your short ETF will increase in value by approximately 20%.

Learn More with Us

As an investor, it's easy to profit in a bear market using put options, short ETFs, and short positions. The key is identifying a bear market and utilizing these investment tools to the fullest. For these and more investment tips, make sure you check out BrownInvestors.com .

A Trillion Dollar Market - Carbon Capture

Fri, 11 Nov 2022 17:45:08 GMT

Did you know atmospheric carbon dioxide levels are 50% higher than before the industrial revolution? Despite being a natural part of the planet's ecosystem, carbon dioxide can wreak excess havoc. Such extreme effects include:

Temperature spikes
Acidifying oceans
Extreme weather

Carbon capture is an effective solution to remediate the effects of global warming. What is carbon capture, and why is it important? This article gives a detailed overview of carbon capture and its relation to Warren Buffett and Occidental Petroleum.

What is Carbon Capture?

Carbon capture is a counteractive approach to reducing the amount of carbon emissions in the atmosphere. According to John Kerry, the Special Presidential Envoy for Climate , there is still a great need to suck carbon dioxide out of the atmosphere, a process requiring innovative technologies.

Carbon capture comprises trapping carbon dioxide in the atmosphere due to industrialization and injecting it deep underground to prevent further harm. Additionally, carbon capture can attain 14% of the global greenhouse gas emission reduction required by 2050.

A Brief History of Carbon Capture

Scientists proposed the first carbon capture plant in 1938. However, it wasn't much later that the first large-scale project to inject carbon dioxide into the ground was done in 1972. It was launched in the Sharon Ridge oilfield in Texas. In 1996, Norway launched the world's first integrated carbon capture project, known as Sleipner Carbon Dioxide Storage Facility .

Currently, there are about 18 operational direct air capture plants worldwide. Large-scale carbon capture, usage, and storage facilities trap over 30 million tons of CO2 annually.

Carbon Capture Market Size

According to Allied Market Research, the global carbon capture market was valued at $1.9 billion in 2022. Simultaneously, it is estimated to reach $7 billion by 2030, growing at a 13.8% CAGR from 2021-2030.

The increasing adoption of carbon capture technology is fueled by growing concerns regarding the extreme effects of carbon emissions on the atmosphere. Additional contributing factors to the increased adoption of this carbon capture include:

Massive government support
Increased demand for CO2 EOR techniques.

Governments worldwide (the US, the UK, the Netherlands, China, etc.) are setting up large-scale carbon capture plants to reduce their carbon footprints.

The impacts of carbon dioxide affect the entire economy and different markets. As such, carbon capture helps to reduce the ecological effects of global warming, thus allowing a healthy and functional business environment for other industries. The more investment and thought given to carbon capture, the more businesses and industries get influenced to implement ecological solutions geared towards sustainability.

Occidental Petroleum (OXY)–A Major Player in Carbon Capture

World-renowned investor Warren Buffett's interest in Occidental Petroleum is poised to increase the company's share value. Having come to the rescue of Occidental Petroleum in 2019 when the company was struggling financially, Buffett has recently received the go-ahead to acquire a 50% ownership stake in Occidental Petroleum (OXY).

Occidental Petroleum plans to raise margins and re-establish dividend payments with other ventures, such as carbon capture, instead of producing more oil and gas. The company plans to set up a $1 billion carbon capture plan in 2023. With over 100 years of experience in the industry, Occidental Petroleum is poised to be a global leader in carbon capture. Investors such as Warren Buffett are optimistic about the possibilities the company has to offer financially and ecologically.

Key Takeaways

Carbon capture is an effective way to reduce the presence and effect of carbon dioxide in the atmosphere. The reasons why eliminating carbon dioxide is important include:

Sustainability of human life. Carbon dioxide is lethal in extreme quantities and composition.
Sustainability of the planet and all forms of life. Carbon dioxide increases temperatures , placing extreme stress on plants and other life forms.
Reduce the effects on the atmosphere.

Taking proactive steps to support carbon capture technologies is a step towards sustainability. With governments and serial investors like Warren Buffett showing faith in carbon capture, it is only reasonable that the public embraces the technology.

Invest in Carbon Capture

Occidental Petroleum is making major strides toward leading the carbon capture industry. As a trusted company by Warren Buffett, Occidental Petroleum (OXY) is a promising venture for environmentalists and investors.

Join our Brown Investors Membership to obtain further information about Occidental Petroleum and many other companies.

Insider Trading and What It Can Teach Us

Mon, 03 Oct 2022 19:08:47 GMT

Have you heard the saying – We all have the same opportunities to succeed or fail? This sounds great, but as we know, it’s not always true. Investing in the stock market provides a means to build generational wealth, but this premise is based upon all participants having a level playing field.

For a moment, imagine if someone on the New England Patriot’s coaching staff was passing information to the opposing team – would Tom Brady have won those seven (7) Super Bowl titles? Well, in the stock market there are those who seek opportunities to cheat the system, via insider Trading. So, let’s talk about it…

What Is Insider Trading?

Insider trading is the practice of buying and selling stocks, bonds or other securities, based on material information that the general public does not have access to. Non-public material information is any news or knowledge able to impact an investor’s decision on whether to buy or sell a security, not made available to the public.

Imagine an employee of ABC Pharmaceuticals becoming aware his company will be announcing the release of a revolutionary drug to eliminate peanut allergies in (5) days and thus proceeding to purchase 10,000 shares of the company’s stock before the official public announcement. This is illegal insider trading, as the employee used non-public information, having the ability to impact the company's stock price to their advantage.

In other scenarios, insider trading is legal and very common, since insiders can buy and sell shares of their own company – so long as they follow specific timing guidelines and accurately report their trades to the SEC. An insider is generally considered to be a director, officer or someone who owns more than 10% of a company’s voting shares. However, for insider trading purposes, this person is additionally anyone who trades a company’s shares based on non-public material information.

Being knowledgeable of insider trading patterns can provide valuable insights into a company's direction. For example, if a large number of insiders are buying the company's stock, this could signal they believe the stock is undervalued and will increase in the future. On the other hand, if many insiders are selling the company's stock, this could be a signal they believe the stock is overvalued and will decrease in the future.

Past Example of Insider Trading

There have been numerous examples of illegal insider trading throughout the years, but let’s revisit one of the most famous occurrences – Martha Stewart and ImClone…

In December 2001, the Food and Drug Administration (FDA) announced it would not approve a new cancer drug called Erbitux from the pharmaceutical company ImClone. This was a huge deal for ImClone, as a major portion of future company growth was based upon the FDA approval of Erbitux. As a result, the company's share price dropped rapidly, with many investors experiencing losses. However, family and friends of then CEO, Samuel Waksal, were financially unharmed as Mr. Waksal instructed them to sell their shares prior to the FDA announcement…he even attempted to sell his own shares.

In fact, just days before the announcement, Martha Stewart sold nearly 4,000 shares of ImClone. At a time when the stock was still trading at a high level, and Ms. Stewart made nearly $250,000 on the sale. This was great timing for Ms. Stewart as ImClone’s share price plummeted from approximately $60/share to just over $10/share in the following months.

Ms. Stewart claimed to have a pre-existing sell order with her broker, but it was later revealed that her broker tipped her off that ImClone's stock was likely going to drop. And of course we know how the story ends - Ms. Stewart eventually resigned as the CEO of her own company, and was found guilty of insider trading, being sentenced to a minimum of (5) months in prison and fined $30,000. In case you’re wondering, Mr. Waksal was sentenced to more than seven years in prison and fined $4.3 million.

Final Thoughts

Understanding insider trading will assist in your investing journey, while illegal insider trading corrupts aspects of the stock market and leads many to serving jail time. Legal insider trading is always occurring, so pay attention to the stocks of which you are invested and when you see a large sell or purchase by an “insider”, ask yourself why and make sure to do the research to uncover the reason.

Investing always comes with risk, but research and patience will help you reach your desired financial destination. Want to know more about how stocks can perform in a recession? Check out our blog post How the "Lipstick Effect" Drives Sales During Recessions .

Why You Need Life Insurance Coverage

Tue, 20 Sep 2022 10:07:28 GMT

Death and disability are topics we typically hate to discuss, until we are forced to have the conversation, which is often too late. At my age, I’ve sadly experienced the passing of numerous friends and family. Death in itself is difficult, but it becomes devastating when families are tasked with having to borrow money for a proper funeral and drastically restructuring their lifestyle, due to the passing of the bread-winner. These events can transform a middle class household into a low-income household, with college aspirations often evaporating for the kids of the deceased.

This is why proper financial planning for death and disability is essential for those with dependent family members and life insurance offers an optimal plan. So, let’s highlight a few benefits of having proper life insurance.

Financially Protect Your Family

Life insurance is meant to protect your family’s financial future. Even if you have savings, it’s unlikely it would be enough to financially protect your family for multiple years. This is where life insurance comes into the picture, as it will provide money to your chosen beneficiary, upon your death. This benefit is typically provided via a term life, whole life or universal life.

Term Life Insurance

This type of life insurance offers coverage for a set period of time — generally 10, 15, 20 or 30 years. Coverage expires at the end of the term; however, most term life insurance policies offer optional riders that could allow you to renew or convert your policy.

Whole Life Insurance

This type of life insurance doesn't expire as long as you continue to pay the premium, while offering a cash value component that has growth potential. You can also borrow from the cash value, but loans or withdrawals may generate an income tax liability, while reducing the cash value and death benefit. Loans will also accrue interest.

Universal Life Insurance

This type of life insurance is similar to whole life , because it does not expire as long as you continue to pay the premium, while also having a cash value component. With a universal life policy, you typically have the flexibility to adjust the premium and death benefit. However, there must be enough cash value in the policy to cover monthly charges, if a lower premium is paid than the amount selected at policy issuance or if a premium payment is skipped. Also, increases in coverage are subject to underwriting.

Pay off Debt and Other Expenses

Another important reason for purchasing life insurance is to assist your beneficiaries in settling debts and expenses after your passing. This includes expenses such as mortgage, credit card, vehicle and student loans. Thus ensuring the debts accumulated during your lifetime, do not become the burden of your loved ones.

At a time when your loved ones are dealing with your loss, life insurance can assist in easing the financial burdens they may experience after your passing.

Obtain More Financial Security

Apart from beneficiaries, you also benefit from increased financial security by purchasing life insurance coverage. Individuals who purchase life insurance coverage do not have to wait until they die for their family to reap benefits. As certain policies offer investment planning, allowing owners to withdraw cash value. This benefit can be used for long-term care benefits, mortgage loans, or income after retirement.

Life insurance payouts are mostly tax-free for beneficiaries, allowing them to use the money for their financial goals. It gives beneficiaries additional financial security for plans such as starting businesses and additional education aspirations.

Business owners and partners can improve their financial security by obtaining life insurance. Partners can secure life insurance policies on one another, thus ensuring the business continues to prosper, in the event of the untimely death of one another.

Peace of Mind

Life insurance gives you peace of mind, with assurance that your family and loved ones will be well taken care of when you die. Although the payout cannot take the place of a loved one, it gives beneficiaries peace of mind by preventing financial hardship.

How a Recession, the Stock Market, and the Economy Relate

Mon, 15 Aug 2022 13:49:57 GMT

Ever wondered why the economy shifts periodically from periods of rapid growth, stagnation, and decline? It all revolves around the stock market, the economy, and financial trends within the markets.

The stock market reflects the economic conditions of a nation's economy. Understanding how the economy and the stock market work can help consumers develop habits that safeguard them during a recession or economic downturn.

What is the Correlation Between the Stock Market and the Economy (Recession)?

A recession is a macroeconomic concept that refers to a significant plunge in the economic activity of a specified region. Government officials, investors, and businesses track several economic indicators which can help affirm or predict the onset of a recession: the National Bureau of Economic Research (NBER) declares these officially. If projections indicate a looming recession, the stock market falls. On the other hand, consumers will shift their mindset regarding their money and spending habits.

A recession affects the economy in the following ways:

Stock prices plummet. Markets become volatile when share prices are constantly shifting. Investors, in turn, react abruptly regardless of the news and are more likely to withdraw their money from the stock markets.
The housing market takes a plunge. A combination of factors such as the rise in subprime mortgages, loose lending practices, and increasing home prices jeopardize the stability of real estate prices. Defaults and foreclosures crash the housing market, obliterating financial securities and reinforcing subprime mortgages.
Recessions increase the rate through which the workforce loses opportunities. It also results in lower incomes and wages and high unemployment rates. Other sectors that suffer in an economic downturn include economic opportunities, private capital investments, and education.

How Can You Earn Returns During a Recession?

An educated investor will assume a sound investment strategy at the onset of a recession by looking for corporations with steady business models and strong balance sheets despite severe economic downturns. Such companies may include defense stocks, good conglomerates offering essential consumer products, and utilities.

At the onset of a recession, consumers will spend less and shift their money to other investments. For example, a Netflix subscriber will stop spending money by going to the movies and instead stay at home while streaming their preferred films.

Price to Earnings (P/E ratio), Revenue Growth, and Debt

Fundamental analysis depends on information from corporate financial statements to formulate various ratios, such as price-earnings (P/E), debt-to-equity ratio, and revenue growth.

Investors use P/E to establish the potential for growth for stocks. You can calculate the ratio by dividing the market value price per share by the organization's earnings per share (EPS). The latter is the number of a firm's profits allocated to individual stocks, indicating a corporation's financial health.

The times-revenue method also helps you evaluate a range of values for a business because it draws from actual earnings from a given period. A multiplier provides a range serving as a sound starting point for deliberation.

Another figure that investors use to determine a business's financial soundness is the debt-to-capital ratio. It compares a firm's total long-term and short-term debt obligations with the cumulative capital provided by debt financing and shareholders' equity.

How to Survive a Recession

You can develop habits that will safeguard you from the effects of an economic downturn.

Even during a recession, consumers will continue to spend at retailers. For example, some people will go to dollar tree instead of luxury department stores in the US. Dollar tree increased its price point to $1.25 in August 2021: the costs have been rising because the company was trading at a lower P/E.

Other strategies that will help you become recession-proof include:

● Create an emergency fund

● Maintain a high credit score

● Diversify your investments

● Remain realistic about risk tolerance

● Make long-term investments

● Have multiple sources of income

● Live within your means

Benefits of a Recession

Investing during a recession could be a brilliant idea. Patient investors understand that stock markets such as healthcare outperformed other markets during previous recessions. As an investor, you should invest in consumer staples such as medical supplies, hygiene products, drugs, and food.

As an educated investor, you could also buy into dividends. Large-cap corporations with strong cash flows and balance sheets will likely hold stocks during economic downturns. These firms are better cushioned for economic slumps than smaller businesses with poor cash flows but are highly likely to issue dividends.

Let's Connect

Need help managing your 6-figure+ portfolio? Schedule a consultation with Brown Investors Wealth Management here .

More of a DIY investor? Become a patient and informed investor by starting one of our intro courses: Investing 101 - Brown Investors University or Crypto 101 here .

Web 3.0 and How to Capitalize on Innovation

Fri, 05 Aug 2022 20:47:23 GMT

Undoubtedly, the internet has revolutionized all spheres of our lives, from education and personal communication to how we conduct business. One of the latest internet waves promising a lot of new opportunities to companies has everything to do with Web 3.0 technology. Leading companies such as Coinbase and Apple are leveraging the new wave to enhance their brand, engage more prospects and increase their revenue. This article explains what Web 3.0 is and how you can capitalize on it.

What are Web 1.0 and 2.0?

Before we delve into what Web 3.0 is, it is imperative to recap where we have been: Web 1.0 and 2.0:

● Web 1.0: Web 1.0 refers to the earliest version of the internet, better known as the World Wide Web wave. Its origin can be traced to the Defense Advanced Research Projects Agency (DARPA), which came up with a global network representing the future of digital communication. Web 1.0 set the foundation for an ever-growing and evolving medium that has expanded to a massive platform with multiple uses. The early internet was mostly comprised of static web pages linked by hyperlinks without any forms, controls, or visuals. This web was non-interactive, with much user input taking place offline.

● Web 2.0: This was the second stage of internet development that ushered in a change from static web pages to dynamic user-generated content and more usability for end users compared to Web 1.0. This is the current state of the internet that has led to the growth of social media and transformed the digital era after the dot-com bubble died. In the new age of the internet, users enjoy a higher level of information sharing and interconnectedness. It allows internet users to actively participate in information sharing rather than just acting as passive viewers who only consume information.

What is Web 3.0?

Web 3.0 is the third generation of the internet characterized by the creation of a virtual world within the internet via websites like online virtual shopping malls. Web 3.0 allows users to interact more with each other and transact businesses, including buying products. Key features of Web 3.0 include:

● Semantic Web

● Artificial Intelligence

● 3D graphics

● Connectivity

● Ubiquity

What does Web 3.0 mean for businesses?

The core Web 3.0 technology allows companies to share content across apps and websites on multiple devices such as Pcs, tablets, and smartphones, thus conveniently bringing more business information to the user. The following are some of the exciting Web 3.0 technologies that businesses can use to their advantage:

● Decentralized block technology: Web 3.0 blockchain utilizes the principle of peer-to-peer connectivity to distribute data across nodes rather than fixed servers. The cryptography algorithms and integrated consensus enable users to choose the information to store, who can access such information, and whether they can change it. This empowers brands to eliminate middlemen such as data storage providers while allowing them to give more freedom and privacy to their clients. This translates to reduced operational costs and increased audience interest.

● NFTs deliver secure copyright: Nonfungible token (NFT) refers to a digital product on blockchain verified by an authenticity certificate. This technology makes product interchangeability impossible, meaning online buyers get precisely the product version they bought.

● 3D interactive web technology: User experience is at the heart of Web 3.0. Web 3.0's 3D interactive web technology revolutionizes user experience by offering virtual users immersive interactions where real word feelings come first. Brands that offer immersion through avatars in a 3D virtual universe tend to attract more consumers to their products and services.

● Web 3.0 social media: Compared to traditional social media, Web 3.0-powered social media delivers limitless business consumer networking. Businesses can leverage blockchain-powered social applications to build a dedicated community and nurture loyal customers organically while fostering strong brand awareness.

Leverage the power of Web 3.0 with Brown Investors Membership

Web 3.0 is the next big evolutionary step of the internet, promising decentralized infrastructure and enhanced privacy and security. The new wave of the internet has massive benefits for businesses, including increasing privacy and security, user data control, and delivering interactive customer engagements, among many others.

You definitely don't want to be caught unprepared as Web 3.0 unfolds in front of us. The best way to stay on top of the must-watch tech trends and stocks is to Join Brown Investors membership , where you receive top monthly stock picks, yearly playbooks on the hottest industries, and access to our online community.

Do you know Ben?

Sat, 18 Jun 2022 00:27:19 GMT

I want to share one of my favorite stories with you.

(There's an important lesson so read it again if you've heard it before)

During one very hot summer, the rivers ran dry. A thirsty crow found a pitcher with a little water in it. But the pitcher was high and had a narrow neck, and no matter how he tried, the crow could not reach the water. The crow was dying of thirst and the water was just out of his reach. Then an idea came to him. Picking up some small pebbles, he dropped them into the pitcher one by one. With each pebble, the water rose a little higher until at last, it was near enough so he could drink.

So what's the lesson?

Have you ever felt like the crow... straining and pushing with all your might to understand the crypto markets...

B ut it seems like the harder you push... you're just not... quite... close enough... to get it.

Frustrating, right?

I've been there.

After I failed repeatedly with all the “mainstream” methods… I finally figured it out: Just like the crow, the secret is to figure out a NEW way to bring success close enough so you can finally hit your goal. And like dropping pebbles in the water - tiny steps in a NEW direction can add up over time.

That's what I teach in my Cryptocurrency 101 course.

Because you know in your heart that if you keep doing what you’re doing now…

No matter how hard you try you’re not going to succeed without learning from someone who has already experienced and continues to experience success in this industry.

So try something NEW (like the steps I give you in Cryptocurrency 101 ).

Cheers to economic freedom,

Dr. Brittanie Hazzard Bigby

Creator of Cryptocurrency 101

P.S. Ben (AKA Benjamin Graham) is the famous author of The Intelligent Investor and calls to readers' attention that between 2000 and 2001, Amazon.com lost 85% of its value. The Intelligent Investor knows when to invest and Brown Investors believes this is prime time to invest in the crypto markets. We shared some tips to getting started with investing in crypto in this blog post - it's a small glimpse of what is covered in the Cryptocurrency 101 course.

$5 Gas and Rising...Here's How To Beat Inflation

Fri, 10 Jun 2022 17:23:11 GMT

Value Investing the Warren Buffett Way

Value investing is a strategy for investing in stocks that appear to trade for less than their intrinsic or book values. Value investors aggressively search out stocks that they believe are undervalued by the market. This technique assumes that the market overreacts to both positive and bad news, resulting in stock price changes that are unrelated to a company's long-term fundamentals. This overreaction allows the value investor to profit by purchasing stocks at a discount.

In the 1980s there was inflation. Several key industries collapsed and never recovered. This is when Warren Buffett, also referred to as the "Oracle of Omaha," became a value investor. Warren Buffett is one of the richest people in the world today. He is the most successful investor of the 20th and 21st centuries. Buffett adheres to several key principles and an investment philosophy that is widely adopted around the world. Here is how to do value investing the Warren Buffett way.

Learn the basics of value investing

When it comes to assets, value investing emphasizes paying cheap prices relative to their true value. The purpose of a value investor is to buy $100 worth of a company's stock for less than $100, preferably considerably less. Value investors look for and invest in firms that have intrinsic values that are significantly higher than the enterprise values represented by their stock prices. Buffett and other value investors believe that the market will eventually appreciate a company's true value, resulting in an increase in its stock price and a profit for the value investor. Learn more and click here.

Create a margin of safety

You require some room for errors when estimating the value and setting your "margin of safety". One of the principles of effective value investing is the margin of safety idea, which states that buying stocks at a discount increases your chances of making a profit later when you sell them. If the stock does not perform as planned, the margin of safety reduces your risk of losing money. Warren Buffett uses the same kind of reasoning. He only bought stocks when they are less than two-thirds of their intrinsic value. Hence creating a margin of safety to earn the best returns while reducing the downsides of his investment. This is how we discovered WPX(acquired by Devon Energy ) which has generated more than a 2,220% return on investment since the date of recommendation. Learn more and click here.

Don't follow the crowd

Value investors resemble contrarians in that they do not follow the crowd. They not only reject the efficient-market idea, but they also sell or stand back while everyone else is buying. They are purchasing or holding when everyone else is selling. Trendy stocks aren't bought by value investors because they're usually overvalued. Instead, if the financials look good, they invest in companies that aren't big brands. They also revisit well-known equities when their prices have fallen, thinking that such companies can recover from setbacks if their fundamentals remain strong and their products and services remain of high quality.

Buy a business, not its stock

According to Warren Buffett, successful stock investment is based on the underlying business. The ability of the company to generate greater earnings each year adds value to the owner. Buffett looks for a good business first, then buys it if the price is right. Businesses, in his opinion, can be split into two categories:

● Commodity-based firms

● Consumer monopolies

Buffett's investing technique is similar to that of a bargain hunter, as you've already noticed. It conveys a pragmatic, down-to-earth outlook. Buffett maintains this perspective in other aspects of his life as well: he does not live in a mansion, does not collect automobiles, and does not commute to work in a limousine.

The #patientinvestor does their research and looks for value stocks. Are you confused by the stock market volatility? By joining the Brown Membership you not only get access to our monthly stock picks but our new Investing 101 course. This course will teach investors how #billionaires invest and learn the fundamentals of what it takes to succeed. Contact us today, to learn more.

Bridging the Gap,

Brown Investors

P.S. If you have $100,000 to invest, and wish to have more assistance, contact our sister company Brown Investors Wealth Management or call 678.878.9905.

The Fed and it's Relation to the Stock Market

Mon, 23 May 2022 23:26:57 GMT

The Federal Reserve commonly referred to as 'The Fed,' is the central bank of the United States of America. Free-market societies such as the US tend to go through booms and busts, alternating economic growth and decline phases. Society prospers during the boom phases, but the economic downturns can be hard on ordinary citizens.

The Fed was established in 1913 to manage the nation's money supply and mitigate economic hardship during periods of economic contraction. Acting as the lender of last resort, the Fed would lend money to commercial banks to keep credit from drying up during an economic downturn. Since then, the role of the Fed has grown significantly.

Today, the Federal Reserve conducts monetary policy, regulates the nation's largest banks, promotes consumer protection, and provides stability to the financial system. The Federal Reserve is indeed a powerful institution, but there are limits to what it can and can't control. This post examines the purpose of the Fed and its relation to the stock market.

Inflation, Stock Market Prices, and the Fed

Prices for certain goods, most notably oil, energy, and food, go up and down all the time. Inflation occurs when prices rise steadily and broadly across the economy, eroding the value of cash. As a result, consumers have to spend more to maintain the status quo. The war in Europe has exacerbated inflation pressures, increasing oil, energy, and food prices (Russia and Ukraine collectively produce around a third of global wheat exports).

It's the Fed's responsibility to rein in spiraling prices, but they can't order oil, energy, and food prices to go down. Unfortunately, the Fed can't also keep Russia from invading Ukraine. What the Federal Open Market Committee (FOMC) — the group of officials from the Fed board and its regional reserve banks that sets monetary policy — can do is make banks more or less able to spend money.

As you can see, the Fed has no control over oil, energy, food, and how that relates to the stock market. Does inflation affect stock market prices? As inflation crumbles the value of the dollar, it can make it difficult for the market to appraise the current value of the companies that make up market indexes. Also, higher inflation usually leads to higher interest rates, increasing the cost of borrowing. The high cost of borrowing leads to low investment.

Don't Fear High Prices

Due to the market disruption caused by Russia's invasion of Ukraine, the price of Brent crude oil is about double what it was before the pandemic. However, investors still should not fear high prices. We've been here before. During the Iran-Iraq war between 1979 and 1981, the price of imported oil in the US increased twofold. Despite high inflation, the price of Exxon mobile continued to rise through the 1980s.

Prices for finished goods other than food and energy also rose significantly during that period. Interestingly, grocery store chain Kroger also maintained high stock prices in the 1980s despite the inflationary pressures. Due to sticky prices caused by inflation, food prices never went down. Prices continued to trend upward with the rate of inflation.

Wrapping Up

The Federal Reserve is about to embark on an inflation-fighting strategy, but it will take months or longer to feel its effect. That shouldn't discourage investors from making stock market investments. All you need is a plan to stay on top of the latest market trends, and you'll be fine.

To stay on top of the market trends with the current volatility, join our Brown Membership, where we keep you up to date on the latest. Not only do you receive monthly stock picks, but you will get access to our newest course Investing 101, along with Cryptocurrency 101. Contact us today or join at: https://www.browninvestors.com/stock-picks.

The Fed and Interest Rates: Do They Affect Growth Stocks?

Fri, 08 Apr 2022 18:10:09 GMT

The world is slowly recovering from the severe economic shock occasioned by the COVID-19 pandemic. COVID-19 hit the world by storm, and the Federal Reserve had to take action to mitigate the resultant economic damage. In line with its mandate, the Fed responded by printing more money and lowering interest rates to near zero. With a loose monetary policy in place, the Fed ensured that money kept circulating through the economy.

The loose monetary policy aimed to stimulate economic growth with stock investors gaining a bigger appetite for risk. In a world that was increasingly moving towards digitization of most operations, technology companies were an easy option for investors looking for the quick and high returns that characterize growth stocks.

In this article, we look at the implications of the COVID-19 pandemic; examine the role played by the Federal Reserve in setting up economic policies to mitigate the resulting economic damage, and how these policies affect stock market prices.

Role of the Federal Reserve

The role of the Federal Reserve is built upon two fundamental goals: achieving maximum employment and price stability. The dual mandate serves as the basis on which monetary and fiscal policies are drafted in response to economic shocks that threaten employment and price stability.

The COVID-19 pandemic resulted in some of the most devastating economic damage in modern history. Thousands of livelihoods were devastated thanks to the ravaging nature of both disease and a harsh economic reality that saw thousands of businesses close and millions of jobs lost.

To cushion the economy and mitigate further economic hardship, the Fed responded to the COVID-19 pandemic by drafting countermeasures in the form of a loose monetary policy. This was done by lowering the federal funds rate to near zero in a bid to encourage borrowing. The Fed also increased its holding of US government securities, a policy aimed at injecting cash into an increasingly cash-strapped economy. Further, the Fed introduced several new lending programs to have more money circulating in the economy and help support and sustain markets .

How interest rates affect stock market prices

What all these programs meant is that, despite the initial economic shock that the pandemic posed, people had more money available. For stock investors with a big appetite for risk, they could now increase their portfolio holdings to include volatile stocks, including growth stocks.

Falling interest rates also meant that businesses could access loans at better rates, leading to higher capital flows and, by extension, higher stock prices. With high capital flows comes an expectation for high rates of returns, which fuels a higher appetite for stocks in place of fixed-income investments such as bonds and US government securities. Such is what happened as a result of the Fed's quantitative easing measures.

3 years after the pandemic first struck, the world is slowly adapting to the new normal. This includes governments discontinuing most of the programs set up to cushion against a recession. As monetary policies tighten and rising interest rates go into effect, investors reduce risk and in turn move to defensive industries such as food, energy, and pharmaceuticals.

These are industries characterized by more stable earnings. Rising rates also mean more investors are likely to move to fixed-income investments, in addition to increased spending on value stocks. That said, every investment calls for careful planning to determine what could maximize the return of your investment.

Continue Your Investing Education

Curious about growth stocks? Check out the membership here and see how companies like Devon Energy were recommended and members gained a 500% return on investment. Brown Investors is here to support you with 24/7 access to our private community forum and so much more. If you're a long-term investor or want to be, you don't want to miss the Long Term Playbook to help you #staythecourse.

IPOs: Is It Time to Invest in Initial Public Offerings?

Fri, 11 Feb 2022 18:53:41 GMT

Despite the challenges brought by the Covid-19 pandemic, 2021 had the highest number of initial public offering (IPO) launches in history. Global IPOs rose by 64%, while the proceeds rose by 67% . Given that the last quarter of the year was the most successful, the trend is expected to continue into 2022 and beyond.

The trend creates an investment platform for both beginners and experienced investors. However, investors should take time to study the unicorns and their Economic Moat before rushing to invest in IPOs. Here you will learn the basics of IPOs and what has driven the success of companies like Coinbase to help you make sound investment decisions.

What are IPOs?

The term initial public offering, popularly known as IPO, refers to the process of allowing the public to own part of a private corporation for the first time. Most businesses start as small private companies owned by the founders and a few other individuals. As the business grows, the owners sell part of their stake to the public to raise expansion capital.

However, small private corporations must meet the standards set by the Securities and Exchange Commission (SEC) before they are allowed to offer their shares to the public. The main hurdle for most companies is to get to the unicorn status, which means the startup has reached a private valuation higher than $1 billion.

IPO Performance History

Like other aspects of business and investment, IPO trends experience their crests and troughs. In the recent past, a year-by-year analysis shows that 2008 had the least number of initial public offerings, while 2021 has the highest. It is good to note that IPOs tend to follow the global economy, which explains why the 2008 global recession affected public offerings.

Although the global economy was affected by the pandemic, it started recovering after vaccine rollouts in 2020. By 2021, the economy had been revamped to record a 64% and 67% increase in IPO launch and proceeds, respectively. Q4 was the most active, meaning the upward trend will continue into 2022, meaning you will have more investment opportunities in the coming years. However, you should take a look at the corporation's Economic MOAT before buying its shares.

What is an Economic MOAT?

Although initial public offerings are regulated by the SEC, corporations have the prerogative of setting the dates. To make the shares attractive, companies post their IPO after positive performances on their bottom line. However, the company may not maintain its performance if it has weak economic moats . An economic moat is a competitive advantage that helps the corporation maintain an above-average performance in profitability.

A good IPO is one offered by a company that is not only an industry leader but one that has enough economic moats to keep it ahead of its competitors. However, IPOs from such companies may be highly valued to deny you an opportunity to sell the share for a profit in the secondary market. If you are experienced in the buy and hold strategy, buy low-priced stocks that have the potential to grow. Coinbase is an example of a corporation whose successful IPOs can stand the test of time.

What is Coinbase?

Coinbase is a leader in consumer-facing cryptocurrency exchanges that had one of the most successful IPOs in 2021. The initial public offering closed at $328.28 per share and is expected to reach $500 within a year. The economic moat for Coinbase is its security features. Currently, Coinbase is one of the few cryptocurrency companies that has not been hacked. With the security guarantee, the company will continue to expand its market share and revenues. Coinbase may, therefore, be one of the best IPOs for investment options.

Contact an Expert

Right now is a beneficial time to look into investing in IPOs. For more information on what could be the next Coinbase IPO or what industries you want to be watching, check out our IPO Playbook for stocks that could give you a big win over the next year.

Momentum Stocks: A Beginner Investor’s Guide for the New Year

Mon, 10 Jan 2022 15:33:59 GMT

A new year brings with it new beginnings and hopes. It's also an exciting moment for you and most people to set your new year's resolutions. Unfortunately, sometimes all the energy and charisma you put into the activity starts to wane as the year goes on. This can be discouraging if you hope to secure your financial freedom.

That aside, it is never too late to plan an investing strategy that enhances the growth and value of your investments. You also have what it takes to gain momentum during the year to achieve your financial goals.

Long Term Investing in the New Year

Long-term investing is a great way to start and maintain momentum because it is incremental in how it works. This brings us to the four popular types of investing strategies to earn returns.

One of them is momentum investing, which involves investors analyzing and understanding the market trends and not company performance. Here, the investor buys securities that show a continually rising trend while selling those that are showing low returns.

The second is growth investing, which is common among high-risk investors as the stocks are not safe from market volatility. Growth investors look into companies with higher-priced stocks hoping they will further gain higher value.

The third is value investing, which is picking stocks that are below book value or intrinsic value with the expectation they will rise in value in the future. It's generally a long-term, buy-and-hold strategy. Warren Buffett asserts that intrinsic value is a logical way to determine how attractive investments and businesses are.

The fourth is dollar-cost averaging, which helps to temper the impulse of selling shares when markets drop. Instead of buying a lump sum of shares from a tech company, you can slowly and over time buy stocks using a fixed amount of funds. A good example is investing in a 401k for retirement wealth.

However, before you start, you need to be clear on factors such as your investment goals, financial situation, type of returns to earn, and risk profile.

Why Momentum Investing Can Work Based on Your Strategy

Every investor hopes to beat market volatility, which is a culprit in undercutting the value of assets. With momentum investing, you get to buy stocks as they rise in value and sell them when they start to drop. It's like jumping off a ship before it sinks. While it involves considering some technical aspects such as entry and exit strategies, and equity selection, it helps preserve capital. It's also important to choose liquid securities as they are easily converted to cash.

Traders and analysts also rely on momentum indicators, which are tools used to follow up on the speed or rate of stock price changes. These are moving averages, trend lines, and average directional index.

What are Momentum Stocks?

Brown Investors' definition is "a stock that is outpacing other stocks within the peer group as well as the index, and continuing to rise higher over a shorter period."

These stocks tend to show high performance through a rise in stock prices over 3 to 12 months. They are also those stocks that perform beyond analysts' expectations, indicating potentially high momentum returns in the coming weeks or months. In addition, momentum stocks have a low float, which is a small number of shares that are being publicly traded. This can range from 10 to 20 million shares.

How to Invest in Momentum Stocks

Momentum investors continue to buy more from companies as they arise. They seek to take advantage of the upward and downward trends of stock prices. In the first place, it can be very risky, but with an effective strategy, you stand to gain great returns. Here are steps to take to increase chances of success:

● The type of stocks or securities you choose matters. It involves screening the performance of shares such as those trading in the highs.

● Do not ignore the trends as they indicate the strength of stock prices. This involves applying technical tools referred to as technical analysis, such as moving averages, to point out the current trend of securities. If the stock is at or above the moving average, then it's an upward trend.

● Timing is also critical during buys and sells to avoid losses. This calls for coming up with an exit strategy where you time when to trade to make profits.

Past Recommendations of Momentum Stocks

Several momentum stocks in the market have performed well. These types of stocks tend to show better than expected returns, and some experts view them as suitable for long-term investing.

One of the top companies Brown Investors has recommended in the past is Sally Beauty Holding, which is gearing up for a strong performance in the next year. Reporting revenues of over $3.5 billion yearly, the company's stocks promise a profitable portfolio. Despite being low-key in the stock market, it recently showed a double-digit share price of over 10% at the NYSE.

Another candidate is Party City, which, based on recent trends, is a promising stock pick. The party goods retailer had a share price rise of 6.2% , where 14,410 shares traded at $5.62 from $5.29.

Key Takeaway

It's possible to make money with momentum stocks. However, it's better to be cautious as it can be momentary. Make sure you get your timing right to avoid losses. If you want to discover the next momentum stock, check out what companies will help drive momentum in your investment portfolio for the New Year.

Happy Holidays, the Metaverse is here!

Thu, 23 Dec 2021 15:15:43 GMT

Meta and the importance of their pivot

Facebook's announcement to rebrand as Meta left many users confused as to what this actually meant. The name of the social media platform Facebook will not be changing, but founder Mark Zuckerberg's new philosophy on Facebook's role in the metaverse is quickly evolving. Here is an overview of what Facebook's rebranding means for the company and why investing in the metaverse can be a worthwhile strategy!

What Facebook's Rebranding Means

Although Facebook's rebranding to Meta only affects the parent company as a whole, rather than the name of Facebook itself or any of the company's other social media platforms and apps, the move does change the overall direction of the company to encompass more of what may eventually be possible for future technology.

Facebook, Instagram, and other apps that are owned by the company now known as Meta have increasingly added various options that involve virtual reality and augmented reality in recent years, rather than sticking to the basic text, images, and video of earlier versions of the social media platforms. The more complex metaverse reflects Zuckerberg's intent to continue pushing the company to become something more vital in the lives of users than basic social media. No longer happy with the basic status updates, online chatting, and photo sharing that once defined Facebook, Zuckerberg and Meta are pushing the limits of what may be possible for the digital universe and its place in the real world.

Effects of Facebook's Rebranding on Cryptocurrency

Cryptocurrency has been gaining traction as a potential legitimate form of currency among tech enthusiasts over the past several years, but it has not quite caught on for the general population. Yahoo's Yaёl Bizouati-Kennedy recently explained that Facebook's shift to the metaverse may result in a positive change when it comes to typical views of cryptocurrency by serving as a gateway to Meta users that are not yet comfortable or knowledgeable of the subject matter.

According to CNBC, the value of Mana, a cryptocurrency closely connected to the idea of the metaverse, increased by over 400 percent in the days following Facebook's official rebranding as Meta. While Mana currently exists within the virtual reality world of Decentraland, the rapid boost of awareness that Meta has brought to the idea of cryptocurrency could have a significant impact on the overall acceptance of the concept of using some form of cryptocurrency to purchase items in the real world.

Decentraland explained that Facebook's emphasis on online interactions, games, and use of digital currency within those games and other aspects of the platform may be helping more users warm up to the idea of using cryptocurrency as a mainstream alternative to credit or debit cards for digital purchases in the future.

Technology Implications of the Metaverse

With Facebook’s rebranding to Meta, Microsoft announced they too would apply special focus to the metaverse space. So, while Meta relays a vision of the metaverse allowing enhanced engagement across education, work and various social contexts, Microsoft relays an immediate focus on the virtual office component. Imagine a world of AR glasses and VR headsets, as being the norm. The metaverse was not started by Meta or Microsoft; however, these are two of the most prominent companies of our generation to quickly pivot, in an effort to enhance their position of leadership and ownership of the internet’s next phase.

At Brown Investors, we prioritize connecting our clients with the most promising companies to create long-term investment opportunities. Contact us today to learn more about Brown Investors company insights and our exclusive Cryptocurrency Course.

Did you miss our latest Instagram Live about the current market and cryptocurrency? Be sure to listen to that here !

First House: Buying Yours Using Brokerage Account Savings

Tue, 12 Oct 2021 19:04:06 GMT

First House: Buying Yours Using Brokerage Account Savings

Buying a first house is something every family saves up for. Some save up for the down payment, some save to buy the entire property in case - skipping the mortgage and interest payments. When you have saved up enough to make your move, you begin the house hunt. You watch available homes appear and disappear from the market, take virtual tours, schedule live tours, and eventually plan to close on an inspiring house that has everything you need.

But let's step out of the romance of the home buying experience and talk about finances for a moment. When you're buying a house, you need somewhere to put your savings as you save up and you'll need a solid investment plan in terms of property value. Buying a home is a one-property real estate investment, and the value you get back when you sell the house will be determined by smart decisions today.

A Sellers' Market Poised for New Buyers

Right now is a strong time on the market to buy your first house, at least until the national interest rate starts rising from its legendary pandemic drop. It may be a sellers' market, but only because buyers are clamoring to take advantage of the current buying opportunities.

Low Interest

The interest rate for a 30 year mortgage is averaging now between 2.5 and 3.5 depending on the lender and circumstances. This is at a historical low, where interest rates were closer to 16% in the 80s, 10% in the 90s, 7% in the 00s, and 5% in the 2010s. We expect to see the interest rate lift back toward 4% in 2022 but right now, you stand to pay the least in interest for the mortgage itself.

Rising Home Prices

Home prices are also on the rise, which creates challenges today but is great news for property values in the future. A short housing inventory (not enough homes for all the buyers) means that demand is driving home prices and construction can't keep up. A single-family home is expected to continue to rise in value over the next ten years, especially since the primary housing shortage solution will be quickly built apartments and condos.

Real Estate Pricing and Inflation Home Values

Look for Homes

● In neighborhoods with a steady property value increase

● In regions seeing steady high demand for homes

● Priced modestly calculating for its previous listing price times inflation since that year

Home values are a critical part of the real estate industry. Preserving and improving home values is what winds HOAs so tightly and what drives real estate investors to flip homes as the markets shift or hold on to value-skyrocketing gems. You, too, could have a home whose value increases more every year, but first, you'll want to beat the inflation rate.

The inflation rate slowly pushes up the monetary value of homes over the years. Inflation means that our money is worth less per dollar because there are so many dollars but the market value remains the same. Every year of inflation increases the home's numerical value by its assayed value times the inflation rate. Home sellers will calculate inflation along with their capital gains tax on the numerical increase of the home's value.

The Benefits of Using a Brokerage Account for a First-Time Home Purchase

A brokerage account is an investment savings account best used for mid-term savings. The unique value of a brokerage account is that it has no deposit or withdrawal limitations and no tax exemptions. This leaves a brokerage account flexible to handle a portfolio of investments and make returns on your savings without limitations like retirement or income tax concerns.

Brokerage accounts are great when you are saving to buy your first house because you can continue building on your savings until you are ready to - at any time - withdraw your savings to use as a downpayment or even a cash purchase on your first house.

Earn On Your Home Savings

Saving for a house, you count every month. You may have a savings plan that stretches two to five years before you will be ready to buy, but a simple savings account has minimal returns even in that long a time. A brokerage account can provide you year-on-year returns that increase your home savings on top of the deposits you set aside for your future downpayment.

No Early Withdrawal Fee or Tax Complications

You can pull your down payment or cash purchase for the house as soon as the numbers are right and you find the ideal property. There is no early withdrawal fee as with retirement savings accounts and no need to worry about income tax complications for pulling a large sum from your savings to buy the house with.

Diversify Your Investments

Lastly, you gain the chance to diversify your investments. First, your home savings can go into a well-balanced portfolio to earn returns on top of your savings for the house fund. Second, the home itself becomes part of your diverse investments as you become a real estate owner in addition to a managed brokerage investment account.

One Stock to Watch: BRK.B

Real estate is going through a boom right now as families previously stuck inside for lockdown are free to house-hunt and close on available properties. Even with a housing inventory shortage stirring buyers to a frenzy, many stock options are poised to benefit from the real estate boom. One stock we want to spotlight today is BRK.B or Berkshire Hathaway. This highly diversified public corporation is poised to benefit investors. In 2021, its measured year-on-year (YoY) reached 29.08%.

Right now is a beneficial time to invest in real estate and purchase your first family home. Contact us today for more useful investment and financial insights in the world of today.

Investing: Top 5 Investing Myths Not To Believe

Tue, 14 Sep 2021 16:09:30 GMT

Investing: Top 5 Investing Myths Not To Believe

It is time to stop believing in myths about investing. They only instill fear and delay your investment journey. Believing in facts rather than myths will make you a more successful investor.

Here are 5 commonly propagated myths you need to dispel.

Myth 1 – There is a Minimum Amount of Money Required to Start Investing

There are multiple ways to invest and there's no minimum amount of money to start. Anyone can open an E*TRADE brokerage account for free. You can start with a small amount and invest monthly. Look at it as a way of paying yourself first.

By investing monthly, you get a compound effect. The central theme for compounding is time. The more time there is, the more the returns. You earn a percentage gain not just on your principal amount, but your interest also earns a percentage gain. Let's say, for instance, a 25-year-old man puts $2,000 savings in an investment account for one year at a 7% annual rate of return. In the first year, he will earn $140, giving him a new balance of $2,140. In the second year, the annual rate of return will be calculated at $2,140, earning $2,289.80. If he doesn't add to his initial investment of $2,000 for the next 40 years, by age 65 his savings will have compounded to $29,948.92.

There is also concern about the cost of opening an investment account. It's important to note that there are individual brokerage accounts that offer a $0 commission to trade such as Vanguard and Ameritrade . This is an account you can use to buy and sell securities like stocks, bonds, and mutual funds. Even if you are required to pay a fee, it is not very high. Another way to invest is through a retirement account such as a Roth IRA or Traditional Retirement accounts. The biggest advantage to these retirement investments is you can save on a wide range of investments and enjoy some tax benefits.

Myth 2 – You Need a Lot of Time to Start

Time should not be a limitation when you're starting to invest. Whether you are starting your investment journey in your 20s, 30s, 40s, or 50s, you still have a chance. Let's take the example of Mike who is a 55-year-old hotel manager. Assuming Mike is at a point in his career where he earns enough to set aside $5,000 every month in an investment account, earning a 7% annual rate of return for the next 10 years. When he reaches 65 years, he will receive $865,094.41.

In addition, you don't have to spend 100 hours researching to get started. There are multiple resources to educate you more on different investment strategies. You can choose active investing, which involves buying and selling assets frequently to make profits. There is passive investing where, instead of selling often, you hold onto the assets and wait for long-term gains. Both types of investing have their pros and cons, which depend on the goals of the investor. You can decide to be a long-term investor, a short-term investor, someone that invests in mutual funds or individual companies by buying stocks according to your risk profile and financial objectives. There's a style of investing for everyone.

If you are time-constrained, you can get guidance from a financial advisor through a service like Brown Investors Wealth Management or use a subscription service that identifies stocks that are good buying opportunities, like Brown Investors. Leveraging a service helps you to "shortcut" the research and analysis part and provides more certainty around your decision. They will also be on the lookout for any risks and technical issues such as rates and fees.

Myth 3 – You Have to Come from a Wealthy Family or a Certain Financial Background to Invest

Many people may invest because they have parents who did, but it doesn't have to be that way. Investing is about your mindset. A positive mindset will see opportunities, while a negative mindset will see impossibilities. While the environment shapes people's view of money, no one is limited in gaining financial intelligence with the endless opportunities and resources available.

Investing is open to everyone, particularly for black and brown people. This is in the face of the outstanding wealth gap among racial groups in the USA. According to a 2019 survey by the Federal Reserve , there was a comparison of the median wealth of white families at $188,200, with black families at $24,100 and Latin families at $36,100. This exposes a deep gulf in America's social class. However, this resonates with the key mission of Brown Investors' commitment to growing generational wealth through stock market education. The Brown Investors' focus is to bridge the knowledge gap and uplift its clients to play on the same level as guru investors in the market like Warren Buffett or Mohnish Pabrai.

If your capital is limited, choose a small amount to invest every month as mentioned earlier. You can invest as low as $50 for a diversified portfolio with ETFs. You can also work alongside an experienced expert such as Brown Investors to help you pick high-growth stocks, expand your knowledge, and grow a high-performing portfolio.

Myth 4 – There is Only One Way to Invest

Investing is not a one-size-fits-all. There are many different investment types to choose from; individual stocks, cryptos, mutual funds, index funds, bonds, and real estate. Considering index funds, they are usually recommended because they are low risk and perform well in the long term. Another option to consider is cryptocurrency, which has great profit potential but still needs more investor education . It is important to note that each asset class has its risks, benefits, and tax matters to consider. However, it is advisable to adopt a simple investment strategy while gradually building your portfolio.

You should also find an industry that interests you and become smart in that asset class. If you jump onto every "hot" stock in the market, you will soon spread yourself thin. As a conscious investor, you should be strategic about what you invest in. This will inspire you to learn more about what you're investing in to make smarter decisions.

Myth 5 – You Have to Trade Frequently to Make a Return

You do not have to buy and sell stocks every day to be successful. Day trading is very risky and requires experienced professionals who can make quick decisions due to market volatility. Reports show that only 10% of day traders are successful.

A buy-and-hold strategy is a solid strategy . This is one way to build a strong portfolio that will generate good returns in the long term. It is different from active investing, as an investor buys stocks or other securities and holds them for longer before selling. Warren Buffet is one of the biggest endorsers of the buy and hold investing. Overall, trading frequently opens you up to more mistakes. It is not for everyone.

Key Takeaway

The mantra for investing is to learn and study the what, why, and how of investing. There will always be myths and preconceived notions, making investing intimidating. However, it is best to start now with a small amount rather than not to invest at all. If you are still unsure what exactly to invest in, check out our stock pick membership, where we give you monthly stock picks that have a high chance for growth. Contact us for more information.

Market Crash: These Pro Tips Will Help You Survive the Next One

Thu, 19 Aug 2021 01:09:26 GMT

The world is in a crisis; a global debt crisis that pre-coronavirus amounted to $197 trillion, with $22 trillion belonging to the U.S. There has been an upsurge in global debt owing to governments which has directed people's attention towards handling and mitigating the effects of the global pandemic and the suspended economies. In the U.S. alone, millions who've lost their jobs will have to apply for relief, and government bodies will deal with a looming immigration crisis and a reduction of funding to noble causes, such as global warming.

Not completely unexpected, economists and financial institutions saw the debt crisis coming. A World Bank Annual GEP report confirmed that the current global debt crisis had signs similar to the previous major global debt crises. An increase in global debt and past economic trends all point to a looming market crash that will have an impact on investors. Nevertheless, there are multiple strategies that Brown Investors recommends to prepare.

Signs of a Declining Market

The first step in preparing for a market crash during a debt crisis is to first see the signs of a declining market. Because all market crashes are apparent, these signs will prepare you so that the next market crash won't catch you unaware.

An All-Time High Global and Corporate Debt

The first thing to look for is global debt. The current global debt stands at $281 trillion , which is 355% of global GDP. This amount will only continue to rise due to outside factors such as Covid-19. Additionally, a recent UNCTAD report shows the global corporate debt stands at $75 trillion, double the amount recorded in 2008.

According to a recent CBO report , the U.S debt stands at 102% of GDP, with a fiscal deficit of $2.3 trillion. During this time, foreign countries such as China have accumulated U.S treasury securities that have amounted to $1.08 trillion , 4% of the total U.S debt.

Loose Monetary Policies

The second thing to look for is a loose monetary policy. The U.S. Federal Reserve implements various monetary policies during different economic moments. For example, during an economic downturn, the Fed will implement a loose monetary policy to increase the money supply and stimulate the economy.

For the average person or small business, you can identify the signs of a loose monetary policy such as the availability of credit and decreased interest rates on loans and credit.

Sophisticated analysis is crucial to gauge when to implement a loose monetary policy accurately. If not done right, it could result in currency devaluation, high unemployment, high inflation, or an overheated economy , in turn resulting in a market crash such as the junk bond market crash.

Short Term Behaviors of Credit Markets (Chance for A Credit Crunch)

The final thing to look at is the credit market. Financial institutions may face strict measures such as increased capital requirements from regulatory bodies or suffer market losses due to borrowers defaulting on credit. When this happens, the financial institutions increase their lending rates to distribute lending risk and cut back lending, resulting in a credit crunch.

A credit crunch can decrease borrowing, growth, and expansion, causing numerous businesses to shut down. In addition, during a financial crisis, a credit crunch curtails economic recovery, leading to a market crash.

How to Hedge Against a Market Crash

While you can lose a lot in a market crash, the following ways can minimize the effects of the market crash on your investments.

Diversify Your Portfolio

When investing, you should look to diversify your portfolio by owning several investments across different industries. Instead, diversify your portfolio by mixing various assets, such as shares, cryptocurrencies, and commodities. This will help to reduce risk while maximizing profits.

This doesn't mean you should over diversify. Investment experts such as Warren Buffet confirm that over-diversification can lead to minimal returns on your portfolio. So, the rule of thumb, limit your investment in a single stock to a 10% allocation.

Put Options

A put option is a contract that gives you the right, but not the duty, to sell an underlying security, say shares or bonds, at a predetermined price (strike price) within a specified time (on or before the contract's expiration). Put options increase their value as the value of the underlying stock decreases, and that's when you can sell and make a profit.

Exchange Traded Fund (ETF)

An ETF is an investment fund made up of assets, such as bonds and stocks. ETFs track market indexes, such as NASDAQ or the Dow Jones, and can be traded during the day as securities exchange at fluctuating prices. By buying into ETF's you become better diversified and allows you to be a passive investor.

Are You Ready If the Market Crashes Again?

A market crash can leave your investments in tatters. If you are a first-time or even a seasoned investor, these signs will guide you into hedging your assets against a market crash. For more invaluable investment advice see what our founder has to say about getting started with investing and understanding market dynamics to optimize your portfolio (even in the midst of a crisis or major event). Check out her guest spotlight on the Connecting with Careers podcast today!

Index Funds 101: Expert Advice for Investors

Tue, 27 Jul 2021 15:39:48 GMT

Financial planners and some of the world's leading investors like Warren Buffett recommend index funds for investing. Whether you're just starting in investing or you're nearing retirement, index funds can be one strategy to increase the odds of achieving your financial goals and elevating your portfolio performance.

Index funds allow you to invest in a diverse range of stocks with minimal fees and less risk. In this blog, we discuss index funds, their benefits, and some of their drawbacks.

Index Fund: What is it?

An index fund is defined as a mutual fund that tracks the performance of a specific market index, including the S&P 500 Index . Index funds are passively managed and generally try to match the composition of their benchmark index (measures a mutual fund's overall performance) for even greater diversification.

Index funds are a substantial way for investors who don't want the hassle or expense of researching individual stocks and bonds to gain exposure to broad market segments like U.S. large-cap stocks, international stocks, small-company stocks, emerging markets stock, or even bond indexes.

Benefits of Investing in an Index Fund

As someone who is just starting out investing, index funds are a way to better your financial security later in life. Below are the benefits of investing in an index fund :

They're relatively easy to manage, when compared to actively managed funds , and help investors maintain a low risk investing strategy.
They have a higher total return compared to actively managed funds.
Index funds are diversified, minimizing your exposure to risk from one company or sector's fluctuating performance.
They are also tax efficient because they don't require regular rebalancing or constant trading to maintain the desired asset allocation.

Drawbacks of Investing in an Index Fund

Just like any other investment, Index funds do come with their drawbacks, and often considerably less returns than investing in individual companies. These drawbacks include the following:

As mentioned above, you may get lower returns over time because Index funds have lower turnover and expense ratios. Index fund expenses are typically a percentage of assets, meaning index funds can be more expensive to hold because they must allocate less money to active management.
Index fund managers invest in stocks, which means they are exposed to the same risks as investors of individual stocks, such as downside market risk and event risk.
With an index fund, you have no control over holdings, which means you have no control over the performance of your Index fund.
Index funds are also not immune to management fees, which can eat away at your returns in several different ways and make it more difficult for Index funds to outperform stocks with low or nonexistent trading costs.

Considerations Before Committing to an Index Fund

Before you commit to an index fund, here are tips to help you make the best decision:

Is the index fund industry strong or is it declining - investing in a strong fund can help you grow your money drastically compared to a declining and failing industry.
Look at the average rate of return for the index fund - an index with a good average rate of return is better than one with a lower average.
Before exiting an index fund, have an exit strategy in place . Ensure you understand the cost and penalties of exiting.

The BI Takeaway

Investing in an index fund is one way to make your money grow, but it isn't the best. Investing in wonderful companies that outperform the market will get you to your "finish line" quicker depending on your goals. Ultimately, it is up to you to understand the pros and cons of investing in an index fund to determine what's the right fit. Remember, the best way to make a sound decision is by obtaining education from investing experts like Brown Investors . If you want more insight into index funds, whether this fits into your investing strategy, and how you should start, engage with us on Instagram, Twitter, or Youtube @browninvestors, or sign up for a consultation here .

P.S. Brown Investors does the research for you, and we've nailed winning stock picks to help our clients generate EXCEPTIONAL RETURNS from individual companies traded on the stock market year after year. Check out the blog below and see a snapshot of past performance.

How Social Media Influences The Stock Market

Mon, 12 Jul 2021 19:57:22 GMT

For a very long time, retail investors were mostly ignored in the stock market. Their contributions did little to make a stock go up or down. This began to change with the rise of online apps, like Robinhood, that made it easier for retail investors to understand the stock market. As small investors became more financially literate and vocal on the internet, they began to share information on which stocks would be best to buy.

What is shorting stocks?

Before we get into how social media can impact where people put their money, let's discuss a few key terms. First, what does it mean to short a stock? Shorting is when you borrow a stock, sell the stock, and then buy it to return it to the lender. If the price went down since you borrowed the stock, you could keep the difference. In essence, you are betting that the stock will continue to drop.

How does Wall Street use shorting in the stock market?

An example of shorting stocks is when many large investors shorted AMC and GameStop. Accordingly, to investing principles, the bet that these stocks would decrease made logical sense. With GameStop's retail presence dropping consistently and the decrease in movie-going habits due to the outbreak of the pandemic, the market would expect both companies to be impacted negatively in terms of financial performance. On December 8th, 2020, GameStop's stock plummeted, encouraging more investors to short it. 

With that decision, a group of investors who believed shorting a stock to be unethical, met on a social media page on Reddit called Wall Street Bets and decided to do something about it.

How has social media impacted where people put their money?

The combination of apps where small investors could invest in the market like Robinhood and social media sites where people come to share ideas around what stocks to buy, such as Wall Street Bets, Public, and JoinCommonStock, has continued to grow and has disrupted the way that Wall Street does business.

In the example above, many large Hedge funds had shorted positions in GameStop and AMC. As a result, small investors leveraged an opportunity with social media by talking to each other to fight back against the shorting efforts of large hedge fund managers. In buying large amounts of GameStop and AMC stock, they defied ‘typical’ investing logic and artificially inflated the share price for AMC and GameStop, causing stocks to surge by nearly 50% at one point. As the investors all bought stock, the stock price of AMC and GameStop artificially began to climb inside a bubble hurting people who had shorted the stock financially. By increasing the value of the stock, the investors who shorted the stock now had to pay the new price, which was much higher.

Wall Street Bets, and the ability of those investors to drive the increase in share price of GameStop and AMC are not the only way social media affects the stock market. Something similar happened with Elon Musk. Many people follow him on various social media platforms. His backing of Bitcoin and dogecoin caused those virtual currencies to rise by 20% in just one day; some investors stopped doing independent research and turned to Reddit or Twitter to discover where to invest next. This led to social media having extraordinary power over the stock market. It also allowed influencers to inflate stock prices artificially and then get out before the price dropped.

What are the positives and negatives of social media investing?

Despite the losses that some investors incurred, there is a positive side to social media investing.  More people than ever feel empowered to invest in the stock market, and the ability to monitor stock performance is increasingly becoming more accessible.

Every upside, however, has a downside. It is effortless to create stock bubbles on social media, like GameStop, and when that bubble pops, this can destroy small investors. Another downside is the assumption that everyone's perspective is vetted equally and is data backed. Social media can make us forget that just because someone is an influencer we admire doesn't make them an experts on stocks. 

In short, investing is both an art and a science; we should be looking to understand what we are investing in and how we expect it to perform. Following the investment strategy of others can lead to the creation of an investment strategy that is inconsistent with your financial goals and potentially more or less risky than one might bargain for.

How can we help you with your investing needs?

Join our community as we take the guesswork out of investing and do the research for you. Don't rely on social media or influencers, instead take the advice of our experts that are trained to create a strategy consistent with your financial goals and risk tolerance. We don't fall for the hype. Instead, we follow the facts; click  here for more information.

Pinterest Spotlight

Mon, 21 Jun 2021 15:34:34 GMT

Are you keeping your eyes pinned to this winning stock? Pinterest (PINS) has been consistently growing since we first recommended them back in July 2020. This company still has a long runway and if you are patient and willing to wait you will get the most bang �� for your buck.

Pinterest is currently up 238% and has taken a dip from its 52-week high of $89.90. If you are already in this company this is your chance to stockpile before it continues its growth trend. This advice also goes for those who haven't gotten on the train yet ��

If you want to learn more about how Pinterest performed this quarter make sure to check out the letter to the shareholders.

If you don't have time for that here is the most interesting part that is piquing our interest from the earnings call ...

Here's what Pinterest CEO, Ben Silbermann had to say

[Growing User Base] We're confident in our strategy and excited about the investments we're making. First, more people are using Pinterest to inspire and plan their lives than ever before. Our monthly active users grew 30% to more than 478 million users globally with strong growth coming from Gen Z, a persistent trend that we've seen for several quarters.

[Reasons for Growth] We're seeing a lot of strength in our business, but it's important to note that since the pandemic began, we've seen a correlation between stay-at-home orders and engagement on Pinterest. Pinterest has always been popular for home improvement, rescue collection and lesson planning. And naturally, many of us did more of these things during our time at home, which brought more people to Pinterest in 2020.

[How Pinterest Beat Expectations] First quarter revenue growth was propelled by strong momentum from mid-market and managed small advertisers, who are increasingly finding value in our conversion-focused ad products and the automation of our ad stack. We expect to grow revenue about 105% year over year in Q2"

Here's Brown Investors Take

Pinterest saw a high amount of growth over the past year due to COVID and more people spending time online. While the amount of engagement may go down slightly as things open up, we believe Pinterest has built a strong foundation.

Pinterest will continue to be the go-to spot for all things DIY as the years go on. This is why, even with a small decrease in user activity due to restrictions being lifted, we are confident in their ability to grow.

The company has also begun to find its niche when it comes to bringing in paying clients. "In Q1, Pinterest helped advertisers of all sizes and objectives create demand and drive sales. Our platform has become particularly effective for mid-sized and smaller advertisers seeking conversions; during the quarter, revenue from these marketers contributed nearly 50% of total revenue, and attributed conversions on the platform nearly doubled year over year." According to the shareholder's report.

We want to hear your thoughts on this make sure to join our Membership Forum today!

Investing Wisely: Why Buying The Dip Is A Great Strategy For Improved ROI

Tue, 15 Jun 2021 02:27:31 GMT

For responsible investors, there are countless opportunities to evolve your strategy to improve your returns. One such strategy often discussed, but frequently misunderstood, is buying the dip. Buying the dip occurs when one purchases an asset that has dropped in price , with the presumption this is a short-term drop that will ultimately result in gains. While this may sound like an intimidating strategy, it doesn't have to be when you're equipped with certain fundamentals.

When Should You Buy The Dip?

While the market can be unpredictable, there are several helpful fundamentals in determining whether you should buy the dip.

Only buy the dip on companies that you've researched. It's important to understand the market history of the company you are committing to buying. This ensures you have a more thorough understanding of the asset's performance, and whether you are looking at a dip, or something more ominous (like an impending bankruptcy or crash). Further, if the company has favorable recommendations associated with it, a price drop could indicate a clear dip and a good opportunity to make a profit .
If the market is selling, but there are no fundamental shifts in the company, it's a good time to buy. This indicates that the company has a strong positioning in the market as a whole. When the market starts buying again, this bodes well for your investment.
Buy only after having a clear plan. It's important to be clear on an entry and exit point. Understand how the market and company are trending overall to dictate this, and don't be afraid to use additional tools like price action to help you make your ultimate decision.

The greatest benefit of buying the dip is the opportunity to make a tidy profit off of normal changes in the market or the behavior of other investors. It can also decrease the asset's net average price for an investor, presuming that the asset sees the expected upturn. This is called dollar-cost averaging, which is a strategy to reduce short-term investment volatility. Once again, it is vital to understand the likelihood of upturn based on market and company conditions at large. So how does one determine whether they are looking at a dip or company failure?

Is This A Dip or Is the Company Failing?

There is rarely a clear answer on whether a price drop is a dip or indicator of impending company failure. However, some key indicators will help you identify a struggling company. Here are a few:

Management concerns . This often indicates the company might be headed down a temporary or prolonged path of volatility. What could be perceived as a dip is more likely a reflection of the actual value of the business.
The market is in a secular downtrend or economic conditions are poor. While this is not necessarily a reflection of the company itself, the company may be unable to buck a long-term downturn in the market. Further, some companies will fail in a downturn, depending on their strategy and tactics for managing through this time.
The company is under scrutiny and receiving negative press . As was seen in the financial crisis of 2008, no company is truly too big to fail. Even blue-chip stocks can mismanage to the point of their own implosion, and it will often be made clear by the overarching feedback that is coming from institutional investors and analysts.

Use the tools available to you to help effectively manage your risk when buying dips. Most importantly, don't panic if you're already in and the price drops. Notwithstanding any major red flags, keep your money where it is. Being patient is vital to smart investing!

Investing Effectively Starts with Knowledge

Arming yourself with available information and tools makes you a more effective and sharp investor. While buying dips appears daunting at first, you can mitigate risk and secure good returns using the tips above. Want to know more? Check out our website for more investing tips, including our Stock Up guide, or contact us for more information.

Shareholder Reports: How to Read an Annual Report and Why it Is Vital to Investors

Mon, 07 Jun 2021 13:09:45 GMT

An investor with a responsible strategy pays attention to their assets. Still, while an investor with a responsible strategy is someone who pays attention to their assets, following news on a company you are invested in is often not enough. Annual shareholder reports, also known as just annual reports, are an excellent tool to get past the distracting noise of third-party bias and PR spin, but many investors neglect reading these vital documents. Shareholder reports give you a window into the functioning of a company and its management. This raw look at the performance, goals, and challenges facing the company is often the most transparent view you can have of your investment and should be required reading for any investor who takes their positions seriously.

What is an annual shareholder report?

Every year, most corporations will compile a comprehensive report of their performance, revenue, goals, expenses, and plans. This is provided to shareholders for total transparency. This is separate from form 10-k that corporations must file with the US Securities and Exchange Commission (SEC ). While both reports will have detailed information on company performance, the 10-k is designed to audit compliance and is often hundreds of pages. Shareholder reports are designed to be read by shareholders, and so are much smaller and typically contain infographics and charts to make them more comprehensible for investors.

Where can you find a shareholder report?

Most investors seek to understand the financial and operational activities of companies, which is why shareholder reports are easy to obtain. Typically, a company will list the most recent, if not all, shareholder reports on its website with other investor relations material.

What does a shareholder report look like?

A shareholder annual report contains a lot of information but usually begins with a letter to the shareholder. This will be a general overview of how management feels the past year's performance was versus key performance benchmarks and previous goals, as well as a projection of future goals and strategies. After this will come a detailed profile of the business, usually followed by detailed financial analysis and data.

Shareholder reports are surprisingly digestible, as the board of directors and management are speaking directly to investors. In Berkshire Hathaway's annual shareholder report for 2020 , for example, chairman of the board Warren Buffet explains in lay terms why he has chosen the particular strategies he has. Warren Buffet is a respected authority in the financial world, so this example can provide great insight for readers about finance.

The shareholder report for Berkshire Hathaway tells investors 3 important things;

What happened during the year
Why it happened
What are the plans to improve

Investors can hear the company's perspective on the gains, losses, and results of fund management decisions during the year. Explaining the methodology and approach enables shareholders to make more informed decisions about their investment strategy and short to long term positions in the company".

Why read a shareholder report

Annual shareholder reports give a direct look into a company's overall strategy, vision, and execution against key performance indicators. Detailed metrics about performance and execution of goals help inform shareholders how capital is being leveraged to encourage growth and returns on that investment.

They give a more transparent view of how the company is run. As an investor, your money funds the operations and therefore you have a right to certain information regarding your investment. Without the vital information from shareholder reports, making wise investment decisions is more difficult. Investing in off-market trends simply isn't enough to give you a full picture. Investing in a company is investing in the actual leadership team that makes that company work, and you need to understand how that dynamic functions.

Learning how plans are executed within a company can give you valuable insight into the potential future, and thus the fair market valuation of the company value of the company. Through this information, you can make better forecasts or predictions about whether a company is over or undervalued and why, which can alert you that it may be time to change your position and buy more or sell off.

Wise Investing Through Thorough Research

Understanding what you're investing in is the first step to making more wise investments. At Brown Investors, we utilize data like shareholder reports regularly in our analysis to serve as input to a comprehensive investment strategy. If you have any questions about how to understand or obtain shareholder reports for your investments, feel free to contact us today. Financial independence starts with wise investing, and it is our honor to help expedite that journey.

The Best Platforms to Use for Crypto

Tue, 01 Jun 2021 14:07:40 GMT

Cryptocurrency is a digital currency that uses cryptography to keep transactions secure. Bitcoin was the first cryptocurrency to use this technology back in 2009. Thanks to Bitcoin, thousands of new cryptocurrencies were able to come into the market, with a new one being created every day.

Cryptocurrencies use decentralized ledger technology instead of centralized systems such as banking. As a result, different platforms such as Coinbase, Binance, Crypto.com, and Voyager have been developed for buying and selling cryptocurrencies.

Investing or trading in cryptocurrencies can be initially challenging and dangerous, due to volatility and various scams. When trading in digital currency, the first concern should be security and safety. Whether you intend to purchase and hold for the long term, want the ease of use, or are looking for frequent trading options; below are the platforms we recommend for getting you started.

Coinbase

Coinbase is by far the most popular and well-utilized platform for trading cryptocurrencies. Due to its ease of use, it is used by numerous beginners, as they find their entry into the crypto world. Coinbase is a fully authorized and registered platform, certified to operate in more than forty U.S states. It has reliable and convenient support and charges a base rate of 4% for all transactions.

Crypto exchange platforms are marred with controversial exchanges and fake coins, but with Coinbase, it's different. It features a more specific set of standards, chooses coins from blockchain projects, and proactively evaluates existing coins. To understand this further, here is a more detailed video about Coinbase.

Additionally, Coinbase is currently the largest cryptocurrency exchange in the U.S. by trading volume.

Binance

Established in 2017, Binance has become the largest cryptocurrency exchange in the world by trading volume. It offers free deposits and charges 0.1% on every trade. It has a massive number of users because it provides a wide range of cryptocurrencies, including Bitcoin, Ethereum, Binance coin, Zcoin, and Litecoin.

The Binance trading platform is best for people looking to invest or trade in a wider variety of crypto altcoins as it has the highest altcoin trading volumes. On the flip side, Binance is currently not supported in thirteen US states, including New York, Alaska, Vermont, and Washington. In addition, it doesn't support most traditional payment methods and doesn't offer comprehensive daily market analysis.

Crypto.com

Since its inception in 2016, Crypto.com has gained an enormous customer base rate of over ten million users with over one hundred cryptocurrencies. A unique feature of this platform is the more Crypto.com coins you stake, the more benefits you accrue on the exchange.

This platform is appropriate for anyone looking to trade, store, spend and save crypto. As an all-inclusive exchange platform, you are allowed to complete all of these actions at affordable rates. Crypto.com also offers numerous coins unavailable to U.S. residents on other popular platforms, such as DASH, STRAT, and USDM.

Voyager

The Voyager trading platform connects you to more than fifty cryptocurrencies and offers up to 9% Annual Percentage Yield (APY) on several assets. This is a good platform for investors who want access to a wide variety of digital coins, without running multiple accounts.

You can trade the crypto with more than fifty currencies, thus no need to sign up for multiple exchanges. The downside of using Voyager is it's not available on the desktop platform, lacks direct crypto to crypto trading, and is unavailable in New York.

Conclusion

Crypto trading can be challenging at first and can bring about high risk if you don't do your research first. Coinbase is a great place to start for anyone new to the crypto world. As you become more crypto knowledgeable, you will likely find yourself using multiple platforms, to increase your investment options.

Feel free to contact us for more information on cryptocurrency trading and investment, or join the Brown Investors membership forum . We are focused on bridging the financial literacy gap through education and investment resources for generational wealth.

Ethereum and Other Cryptos: How to Get Started in Investing

Mon, 24 May 2021 13:55:19 GMT

Lately, there's been growing interest in the digital asset space. With recent developments in the crypto market — from PayPal allowing users to purchase crypto on Venmo to Tesla accepting Bitcoin as payment for cars, and the dramatic surge of Dogecoin — the cryptocurrency craze is in full swing and is rapidly becoming mainstream.

Wild fluctuations in the price of cryptocurrencies, such as Dogecoin's record-breaking rise, present an opportunity for significant gains if you have the stomach for the risk. It doesn't cost much to start owning or investing in cryptocurrency, but it can be a little intimidating. In this article, we'll cover everything you need to know to start investing in cryptos such as Ethereum, Bitcoin, or Ripple.

Before you start investing, you need a good understanding of cryptocurrency — and the underlying Blockchain technology. If you are not fully conversant with the subject or feel a little bit rusty, here's a short course to bring you up to speed.

Where to Invest in Cryptocurrency

The first step to investing in crypto is choosing an exchange. A digital exchange is a platform that facilitates buying, selling, and holding digital assets. Opening an account allows you to trade cryptocurrencies. It's akin to opening a traditional investment account, but instead of stocks, bonds, ETFs, Mutual Funds, etc., it's cryptocurrencies and other digital assets.

There are many crypto exchanges to choose from, but Coinbase and Binance are the most popular among beginners. Currency services offered by platforms vary. For instance, Coinbase allows traders to purchase crypto using fiat currencies. Fiat currency is government-issued money that is not backed by a commodity such as gold or silver, but by the government of issuance.

The U.S. dollar and Euro are examples of Fiat currency, thus allowing you to get started right away on fiat accepting platforms. Coinbase provides everything you need to get started and is the first choice of many.

Binance, on the other hand, will only allow users to fund their accounts and trade with digital currencies. This platform does not offer any fiat trading at all. This currency service is known as cryptocurrency trading. However, Binance offers a more extensive selection of cryptocurrencies to trade with. While Coinbase is widely regarded as being more beginner-friendly, Binance is more suited for more advanced users.

How to Create an Account to Invest

Once you've chosen a cryptocurrency exchange, you need to create an account to start trading. Many crypto exchanges, including Coinbase, Binance, Crypto.com, Gemini, etc., offer a simple user interface and various cryptocurrencies to choose from. To create an account with a crypto exchange platform, fill out the information form, wait for approval, connect a method of payment, and you're all set.

ID verification is almost instantaneous; however, sometimes it takes days for the crypto exchange to clear and approve your account for use. For instance, Coinbase's accelerated ID verification only takes a couple of minutes, but it could take about five business days to grant full access to the platform.

Investing

You need to have a sound investment strategy to make money trading crypto. If you are new to trading cryptocurrencies, start by researching the cryptos listed in the trading section at Coinbase. Due diligence is imperative when investing in crypto. Before you invest in a digital asset, look at the website of the company behind it to ensure that the development is competent, reputable, and transparent.

For instance, the official Ethereum website is https://ethereum.org/en/foundation/ . Another critical factor to look into when investing in crypto is the use case. Make sure that a coin has a unique, logical purpose before you invest in it. The whitepaper can also shed some light on the project - so make sure you read it. When you are finally ready to make your purchase, don't put all your eggs in one basket. Pick several coins that you believe to be good investments.

Put the bulk of your money in established coins such as Ethereum, Bitcoin, and Litecoin. You can invest the rest in riskier investments to diversify your portfolio. You don't need to commit thousands of dollars to invest in crypto. If the price of the crypto you wish to purchase is too high, you can always invest a total sum of money in small increments over time. This investment strategy is known as Dollar-cost averaging (DCA).

Investing in cryptocurrency can be an intriguing prospect for your portfolio. However, getting started can be intimidating if you don't have the necessary information. Contact us or join our membership forum to get the inside info on cryptos and what is about to pop.

DBVT Spotlight

Wed, 12 May 2021 18:55:09 GMT

Peanut allergies are wrecking lives throughout the world. This is where DBV Technologies (Ticker: DBVT) comes into play, which is why we initially recommended in November 2020. This is a company focused on saving and changing lives through immunotherapy. DBVT is working to combat several allergens; however, their spotlight product is the Viaskin Peanut patch, which is designed to counteract peanut allergies.

The rewards of investing in DBVT will be huge; however the risk resides with DBVT's obtainment of FDA approval, which has alluded them to this point. The two primary areas of concern identified by the FDA are patch adhesion and the need for patch modification. Note the POSITIVE, of the FDA relaying no concerns regarding the clinical success rate of the Viaskin Peanut patch.

Here's a snapshot of the letter recently written to shareholders:

Dear Fellow Shareholders,

DBV Technologies was founded on the belief that children with food allergies, their families, and the allergists who treat them, need and deserve multiple treatment options. We believe that our lead product candidate, Viaskin Peanut, has a profile that is important to many families and allergists, and our primary goal is its potential approval in the United States and European Union.

On August 3, 2020, DBV received a Complete Response Letter from the FDA regarding the BLA for Viaskin Peanut. The FDA indicated it could not approve the Viaskin Peanut BLA in its current form and identified several issues, including their concern regarding the impact of patch-site adhesion on efficacy. The DBV executive management team, supported by a comprehensive working group of internal and external experts, immediately began crafting a plan to address the FDA’s concerns and clarify a clinical and regulatory path forward for Viaskin Peanut in the United States. We submitted the plan to the FDA in the fourth quarter of 2020, and in January 2021, the FDA provided clear guidance on a well-defined path forward for a modified Viaskin Peanut. I am very pleased to report that DBV continues to make significant progress, in dialogue with the FDA, in advancing the clinical and regulatory development plan for a modified Viaskin Peanut.

I am also pleased to report that the European Medicines Agency (EMA) review of the Marketing Authorization Application (MAA) for Viaskin Peanut is progressing according to our expectations and consistent with our pre-filing exchanges with the EMA. In the fourth quarter of 2020, DBV submitted the MAA, and the EMA confirmed the application was sufficiently complete to begin their review. We expect to provide further updates as the EMA’s review progresses.

Looking ahead to 2021 and beyond, I believe DBV is strongly positioned for the future. We remain steadfast in our commitment to bring Viaskin Peanut to potential approval in the United States and European Union, and we are driven every day by our foundational belief that children with food allergies, their families, and the allergists who treat them, need and deserve multiple treatment options - Michel de Rosen

Conclusion

This shareholders report shows us that the company is getting closer FDA approval and by reading the shareholders report we are able to make more informed decisions on the company. To get more in-depth analysis like this make sure to join the BI Membership today!

Capital Gains and The Benefits of a Buy and Hold Strategy

Mon, 10 May 2021 13:10:07 GMT

Buy and hold refers to a passive investment strategy where an investor buys a stock or other type of security such as an ETF and holds them for an extended period. Typically, buy and hold stocks almost always outperform the market regardless of the short-term price movements and technical indicators.

Today, we will examine the benefits of using a buy and hold strategy:

What are Capital Gains?

A capital gain is the profit you make after selling your asset, such as a stock investment. Capital gain is calculated as the total sale price less the original cost of the asset. To understand the benefits of a buy and hold strategy, we must first understand what capital gains are.

Capital gain tax refers to a government fee imposed on investors' profit after selling some assets such as stock investments or real estate property. The capital tax only becomes due after you sell your investment, meaning that you won't owe any tax as long as you continue to hold on to your investment.

What Is the Difference Between Short-Term vs. Long-Term Capital Gains?

There are two types of capital gains that you can be taxed under. The first one is short- term gains, which is the gain that occurs when you hold onto an asset for less than a year. The second type is long-term capital gains which is any asset that has been held longer than a year.

The Tax Implications of Short vs. Long Term Capital Gains

The federal government imposes taxes on short- and long-term capital gains, but the tax implications differ substantially. Long-term capital gains are taxed according to graduated thresholds for taxable income at 0%, 15%, or 20%. While short-term capital gains are taxed as ordinary income, which is dependent upon your tax bracket.

The main benefits of holding a company at least 1yr + 1 day are:

Cost savings: Long-term capital gains are generally always taxed at a lower rate than short-term capital gains. The current long-term capital gains rate stands at 20 percent in the highest bracket. However, you can qualify for a 15 percent rate or less. Notably, married taxpayers earning $80,000 and filing jointly will pay a 0 percent capital gains tax rate for the year 2020.

Risk reduction: The passive investing strategy reduces the "manager risk." The "manager risk" is the risk that you take when you actively manage your portfolio. In essence, when you go for long-term capital gains, you reduce the risk of human error.

Simplicity: Buy and hold investing is an effortless strategy that blends well with other beneficial techniques such as index funding and dollar-cost averaging.

When to Avoid Your Long-Term Strategy for Short-Term Gains

There are times when a short-term investment strategy is more attractive than long-term gains.

These include:

Changes in the company: If there are changes in the parent company, including changes in management, product or service line, and regulatory issues, it may be wise to go for a short-term strategy. These changes may affect the company's bottom line in the long run.

Price vs. Value: If the stock price has exceeded the perceived intrinsic value, it may be an excellent time to sell. This is a good strategy when looking to rebalance your portfolio. Rebalancing involves selling a bit of what has done well and reinvesting elsewhere to decrease exposure to the area that is performing over a given period. Rebalancing also helps keep your portfolio on track with the original mix of investments.

You have a Better Option: If you need urgent funding for what you perceive to be a better investment, you can sell your stocks and use the money to finance your new investment.

Key Takeaway

Research looking into historical asset class returns reveals stocks have outperformed almost all other asset classes. If trading in stocks is in your plans, consider a buy and hold strategy that offers several benefits. With this strategy, you are sure to get an opportunity to ride out some of the usual market fluctuations to generate a better long-term return. If you need help getting started, contact us today .

Managing Stock Portfolio during Inflation and Hyperinflation

Fri, 23 Apr 2021 14:17:23 GMT

Managing a stock portfolio during a time of high inflation is daunting for both novice and experienced stock market investors. During an economic crisis, investors tend to realize they have a lower risk tolerance than they anticipated. This can lead to them selling their stocks for a loss, instead of waiting patiently for the stock to rise.

If you're just getting started in the stock market, or you've been active for a while, we understand how it feels to worry about your portfolio shrinking due to inflation. The good news is, we're not just going to sit and watch you lose what you've worked hard for.

That's why at Brown Investors, we've put together this informative guide about inflation and managing your stock portfolio during an economic crisis.

So, without much ado, let's jump right in !

Inflation Vs. Hyperinflation: What are They?

For starters, inflation is the steady increase in consumer commodities prices—goods and services—in an economy. According to a report by Investopedia, when this happens, it leads to a decrease in money purchasing power at a specific period.

Like inflation, hyperinflation leads to an increase in the cost of living. The only difference is that it affects the economy at a higher level. During hyperinflation, the prices rise rapidly and are always out of control. In other words, it's a rapidly rising inflation at unsustainable rates.

How Inflation Affects Stock Prices

Inflation and hyperinflation need to be kept under check for the overall good of the economy. The two have both positive and negative impacts on the economy. This is to say, while some sectors of the economy will benefit from it, some will be crippled.

That's why savvy economies strive to balance inflation at manageable rates. Below, we're going to dive deeper into how the phenomenon affects stock prices.

Share Price and Effect of a Market Correction

Inflation implies that one would need more than the usual amount of money to afford the goods or services. As the value of the currency drops, the prices of commodities go higher at an unsustainable rate. This potentially affects the value of stocks in the long run.

Ideally, inflation has both its merits and demerits, depending on what side of the coin you are. For instance, an increase in daily consumer commodities increases the cost of living for the average person. Also, anyone holding cash (currencies) will suffer a drop in the value of their portfolio. On the contrary, tangible assets like stocks and real estate see an increase in value.

More often than not, hyperinflation is more devastating than normal inflation. Therefore, most developed economies lay down strategies to avoid this.

According to the US Bureau of labor statistics, the federal government is always working on maintaining inflation at manageable rates. To measure the inflation rate, the Fed uses the consumer price index and strives to maintain the rate below 2%.

When prices rise to unsustainable levels, a crash is inevitable. Normally, the crash can be temporary or lasting for several days, weeks, and months. Mostly, the fall is always between 10- 20%, and according to Forbes report, this suffices for a market correction.

When share prices get to unsustainable levels and the bubble bursts, tech companies, and the housing market suffer the most. This is evidenced by the dot com and housing market bubbles that occurred in the late 90s and early 2000s.

As you can see, during a market correction, stock prices decline in value. Since this can last for a while, it puts your stock portfolio at risk. The best way to survive market correction is to have a diversified portfolio. Guess what? This can only work if you're a disciplined investor.

Managing Stock Portfolio during Inflation and Market Correction: Final Thoughts

From time to time, inflation and the consequent market corrections will be unavoidable. Since worrying or hoping aren't a strategy, we recommend that you buy and hold.

Managing a stock portfolio on your own can be daunting; we get it. But we want you to know that we got your back always. If you're concerned about inflation, Contact us or subscribe to our newsletter and join our membership because we're steering members toward key investments that hedge against inflation.

The Top Stock Investments from March

Thu, 15 Apr 2021 17:00:27 GMT

March is officially over and it is now April! We had a great time getting you caught up on all of the budding industries such as 5G, Cryptocurrency, and Cannabis. We even made sure to talk about a more stable industry, retail. If there is one thing March Madness taught us, it's how to GROW! These brackets have all completely dominated.

While March Madness is over, you better believe, we are not. Spring is just heating up ��. As we get ready to GROW together, here are a few industry resources we have prepared just for you.

Crypto:

Check out our IGTV on how to get started in the space.

Make sure to also check out out our in-depth guide on cryptocurrency .

Cannabis:

Learn how the legalization of cannabis will grow your stock portfolio here

Retail:

Watch our IGTV live to learn about retail industries such as beauty that continue to grow while other industries fall.

Make sure to also read our blog post about the lipstick effect and how it impacts investors.

5G:

Learn what 5G is and how the future of tech from one of our favorite blog posts!

If you haven't guess by now. Brown Investors believes in all 4 industries. And you better believe... we have skin in the game.

Out of the 4 industries though, the retail industry had a slam dunk. Game Stop has grown by over 1700% since we first recommended it, Stitch Fix has grown by over 130%, and Party City has grown by over 210%. �� For this reason we are giving them the championship trophy for March Madness 2021.

Check out our track record below ��‍♂️! It’s truly unmatched

If you want more information on what specific stocks to invest in within each industry, join the membership , where we prepare our members to win big

People who sign up get:

3-5 Winning Stock Picks Recommendations Every Month
Interactive Community Forum for Near Real-time Communication with our CEO & CIO
Bi-Weekly Office Hours
Industry-specific playbooks

March Madness may be over but the games will continue, so keep your eyes on the Prize (Financial Freedom)

I have a Brokerage Account, So What's Next?

Fri, 02 Apr 2021 15:08:31 GMT

Opening a brokerage account is the first step towards building your investment portfolio. A brokerage account is an investment tool that enables you to buy and sell various investments such as ETFs, mutual funds, bonds, and stocks.

Let's look at what you can do with your new brokerage account and the types of investment options available for you.

What can I do with a brokerage account?

A brokerage account gives you access to the world of buying and selling stocks for profit. However, a brokerage account can also help you start saving for future goals or retirement. Unlike retirement investment accounts, such as the 401(k) plans and Roth IRAs , this type of account offers a lot of flexibility. Ideally, you can withdraw your savings at any time and use the funds for your shorter-term goals.

Importantly, with a brokerage account, you can trade more than a dozen investment products:

● Common stocks and preferred stocks

● Bonds such as the U.S Treasury securities, saving bonds, agency bonds, tax-free municipal bonds, and corporate bonds

● Mutual funds, including the index funds

● Exchange-traded funds(ETFs)

● Real estate investment trusts(REITs) like hotel REITs

● Cryptocurrencies like Bitcoin

● Money markets and certificates of deposits(CDs)

● Master limited partnerships (MLPs)

How do I pick stocks/How do I pick good stocks?

As a beginner, it may not be advisable to start trading all the investment products listed above at a go. A great way to begin is investing in stocks. Now before picking any stocks, you must do your homework. Your immediate goal is to find good value for your money.

Review where you currently spend your money; however, don't just invest with blind faith. Do extensive research and review particular company fundamentals to determine viability. You can use a reliable picking service like Brown Picks to know the type and exact stocks to invest in.

Here are a few things to guide your choice of stocks:

Trends in earnings and growths

Check whether the company's earnings have generally increased over time. Trends in company earnings can be a good indicator of its overall performance. If you notice even small regular improvements over a period, it can be a positive indicator of the company's overall health. However, you also want to look at earnings growth in comparison to value, in determining a worthwhile investment.

Industry strength

You can also look at the industry represented in the market to establish future growth potential. With the general industry performance in mind, look at where the specific company you want to invest with fits in. Start by comparing its performance with competitors of the same size and market capitalization during the same period. Comparing the company's performance with that of its peers can provide insights into the stock's overall value and whether it is worth your investment.

Debt-to-equity ratio

Most companies are servicing some debt. Ideally, you can use the debt to equity ratio as an indicator of the company's financial health. A low debt to equity ratio depicts the company using a lower amount of debt vs shareholder equity for financing, while a high debt to equity ratio depicts the opposite. More debt typically signifies more risk; however, it does not always mean the company is being run poorly, as it can vary amongst industries. The best way to find this number is by dividing the total company liabilities by the total amount of shareholder equity. A generally accepted optimal ratio is 2.0; however, it varies by industry.

Check price-earnings ratio

The price per earnings ratio helps determine how well a stock's price is doing relative to its earnings. The P/E provides crucial insight into a stock's market value as it indicates whether a stock is undervalued or overvalued. You can find the company's P/E ratio by dividing its share price by its earnings per share.

How many shares of a stock should I buy?

There are several factors to consider when deciding the number of shares in a given stock to buy. The most significant deciding factor is the amount of capital you have. Where feasible, you should aim at buying a minimum of 100 shares of stock in a given company.

How many companies should I have in my portfolio?

The number of companies in your portfolio will depend on many things, including the amount of money you have available to invest/portfolio size and your specific diversification needs. As a general rule, you should hold 10 to 20 stocks in your portfolio. The idea is to diversify your investments as much as possible; however, your level of diversification is tied to the money one has available to invest. Therefore, some will have a portfolio of 5 to 10 stocks, while others might have a portfolio of 25 to 30 stocks.

Diversification allows you to reduce your exposure to unsystematic risks . This is the risk associated with a particular company or industry. Studies reveal a well-diversified equity portfolio may effectively minimize the unsystematic substantially while giving you the same expected return level of a specific portfolio.

Key Takeaway

A brokerage account offers several benefits, including access to the stock market and other investment products. You can use your brokerage account to buy and sell securities like stocks, bonds, and mutual funds while saving for the future. If you have any questions or need help getting started, contact us today .

How Marijuana Legalization Can Impact The Economy

Mon, 29 Mar 2021 15:26:30 GMT

We've come a long way from the simplicity of Ronald Regan's, "Just Say No." Marijuana legalization seemed impossible less than a decade ago, but now legal cannabis is quickly gaining momentum in states all across the U.S. This phenomenon leads many to wonder if cannabis stocks are a promising investment.

Read on to learn more about how marijuana legalization can impact the economy, and what that might mean for your wallet.

Are cannabis stocks a good investment?

February 2021 saw a major spike in cannabis stocks after a couple of slow years, as it seemed like federal legalization was on the horizon. Last month, Senate Majority Leader Chuck Schumer and Senators Ron Wyden and Cory Booker released a statement conveying that decriminalization of marijuana is a priority for the Senate.

Cannabis stocks have always been seen as unpredictable, but experts have stated they expect to see major growth in the upcoming months of 2021 and early 2022. As more states legalize recreational marijuana, bordering states begin to feel pressure to do the same. Also, recreational marijuana can provide major tax benefits that local government does not want to miss. These different factors may be a potential catalyst for the overall cannabis industry.

What to Look for in Cannabis Stock

Several cannabis stocks have emerged in recent years, and it can be difficult to decide which stocks might pay off in the long run. Nobody can know for sure what the future holds in the stock market, but there are a few factors you should consider when choosing a cannabis stock.

Take a look at who is running the show at companies you are considering investing in. Does this person, or do these people, have a track record of building businesses that see steady growth? Is there evidence that the management team is knowledgeable about the industry?

Spend some time investigating the company's financials too, especially its financial trends over time. Any company can experience spikes in growth, but the best investments are in companies that consistently show advancement over months and years instead of days or weeks.

Finally, learn more about a company's competitive position, and its growth strategy, before you invest. Are they forming key partnerships to expand their brand? Will they use new technology to increase their profits?

These are just a few questions you should ask before investing your money in a cannabis stock.

American vs. Canadian Cannabis Stocks

Both American and Canadian cannabis stocks have experienced growth in recent months, though Canadian stocks ultimately outperformed American ones. American and Canadian cannabis stocks differ widely in a few key ways.

Because marijuana is legal in Canada, and some companies do business in America, these companies can sit on U.S. stock exchanges. On the other hand, U.S.-based cannabis companies sell their stocks through over-the-counter markets in Canada instead of on an official exchange. Check out CNBC's piece on this topic, and speak with an expert to learn more about how these structures could affect you if you were to invest.

Risks of Investing in Cannabis

Like anything in life, investing in cannabis comes with some risks and drawbacks, including the following:

Federal Law in the U.S.

Cannabis is currently legal in 35 states for medical purposes and 14 states for recreational purposes. However, it is not yet legal on the federal level, so the possibility exists the federal government could impose federal law at the state level. This is not expected to happen; however, it's always important to be aware of all risks when investing.

Over the Counter Stocks

When U.S. companies participate in stock exchanges like the New York Stock Exchange or NASDAQ, they have plenty of regulations and requirements they must follow to maintain their membership. Some of these requirements include regular financial filing and minimum shareholder size.

Companies offering over-the-counter marijuana stocks do not have to meet these requirements, which can put you, and your finances, at risk.

Fraud and Scams

When investing in anything, avoiding fraud and scams must take priority. Many sketchy schemes exist in the world of stocks, and cannabis remains no exception. Purchasing stocks with a trusted investor can help you avoid fraud that can end up costing you thousands of dollars.

How to invest in cannabis stocks

If you're interested in investing in the cannabis industry, ask about our Cannabis Guide. At Brown Investors, we seek to provide financial literacy and advice to everyone, regardless of their income, to help them achieve financial freedom.

If you'd like to learn more about who we are, and how we can help you, please contact us today!

Top Industries to Invest In

Fri, 26 Mar 2021 12:15:14 GMT

Our March Madness Industry Picks

We are already 3 months into the year and the stock market has been a wild ride, especially this month (There's a reason why they call it March Madness).

This isn't a bad thing though, it's actually super exciting because it gives us a chance to get you caught up with all the big things happening in the market.

Instead of the Basketball Power Index (BPI), we are here to give you the Brown Power Index (The best-performing stocks out there). For this reason, all throughout this month, we are committed to spotlighting companies that will lead you to the championship.

Brown Investors has already done the hard work of finding these winning companies, so you don't have to.

With March Madness alive and well, we want to highlight the four regions - North Region (Retail), South Region (Cannabis), East Region (Cryptocurrency), and the West Region (5G).

The clock is ticking, and we wanted to help you stay informed on what's happening in one of the biggest regions. The Retail Region or in other words, GameStop.

We know it is old news, but the news doesn't ever get that old when the frenzy continues.

GameStop is a great company that hits the fundamentals set in place, but it is wayyyyy overvalued. The reason why the price has continued to grow so quickly is because of a projected squeeze. A lot of analysts out there have been throwing the term short squeeze around, but the possibility exists that GameStop is in for something much bigger, an infinity squeeze.

To get more information on an infinity squeeze Click Here and read about a similar situation with Volkswagen.

But the truth is that we will only know the final score on GameStop, when the 4th quarter buzzer sounds. Brown Investor's Guidance is to sell GameStop because we are never too greedy.

Now let's talk about the Cannabis Region. Two winners currently rising to the occasion are Curaleaf and Cronos, with Cronos being up 48% since our initial recommendation in January and Curaleaf being up 37%. Both clearly have their eyes on the championship...

However, its always wise to watch out for the underdogs, this is why we also have our eyes on Fire and Flower. It may have a lower win ratio right now, but we see this stock coming through in the clutch and when the final ball drops, they might come out on top.

On to the Crypto Region, where we have placed a lot of analysis time. Be sure to check out the Cryptocurrency Guide, in addition to the IGTV live .

Our two big picks for this region are Riot Blockchain, which is up 188% since our initial February recommendation and GTBC which is up 51%. For only a month and a half, those are some pretty nice numbers.

If you want to know more about the West Region(5G) and our 2021 Brown Picks make sure to join our Members Access today!

How Do I Start a Brokerage Account for My Child

Tue, 16 Mar 2021 19:49:54 GMT

Let’s Face It, Kids grow fast and time flies quickly. Don’t race against time. Instead, plan for the future and allow time (compound interest) to work on your behalf. If you've been thinking about teaching your child about growing money through investing or are searching for a way to save more money for his or her future, opening a brokerage account can be the perfect way to get started. If you're looking for a modern way to help your child learn about saving for the future, it's never too early to start teaching him or her about investing. Most of us grew up placing an allowance or gifts of money into a piggy bank, but just imagine if that piggy bank was a brokerage account — allowing your money to make money. At Brown Investors, we believe every penny counts, so let's transfer a few of those piggy bank funds to a new brokerage account for your son or daughter.

How Can a Brokerage Account Benefit My Child?

When done right, investing can result in your baby, child, or teen having more money saved by the time they are ready to head out into the world than simply leaving all their money in a savings account. Although he or she won't be directly responsible for making final investment decisions, teaching children about how to invest and the benefits it can have from an early age can also be an important stepping stone for helping them learn to make the most beneficial financial decisions when they are older and get excited about the idea of making their money work for them.

Types of Brokerage Accounts

As a parent, you'll want to maintain control over where your child's money goes until he or she is old enough to make smart financial decisions. For this reason, choosing a guardian or custodial brokerage account is a wonderful option. You'll also want to take into consideration whether your child is earning any money or whether you'll be working with a limited amount of funds that you deposit.

Custodial Brokerage Accounts

The Uniform Gift to Minors Act (UGMA) and Uniform Transfers to Minors Act (UTMA) are great accounts for children who are not earning a significant amount of taxable income. The UGMA account is limited to a few specific types of assets, while you can put any assets in an UTMA. This money belongs to your child as soon as you deposit it in the account, and you won't be able to withdraw it yourself later unless it will specifically be used for your child. You'll open this account in your name, and control will be transferred to your child at age 18 or 21, depending on the state you live in.

529 Plan and Coverdell ESA

These two types of accounts are specifically for starting a college fund for your child. In certain circumstances, funds from these accounts can also be used prior to college--the 529 Plan allows money to go toward K-12 private school tuition, while funds from the Coverdell ESA can also be used for a variety of other educational expenses. Both options also offer investment opportunities. The 529 Plan provides a specific list of approved investment portfolios, while the Coverdell ESA gives you and your child a bit more flexibility.

Let’s face it, you’re busy raising kids so let us help save you time and visit Brown Investors. Our sole purpose is bridging the financial literacy gap to begin cycles of generational wealth. We are happy to assist you in this journey. Visit our website today to become a member or contact us with any questions you have about opening a brokerage account for your child!

What Does 5G Mean for You As an Investor?

Sat, 13 Mar 2021 00:47:35 GMT

The 5th generation mobile network, more commonly known as 5G, has started rolling out to many Americans who have newer smartphones. The technology promises to deliver very high data speeds, low latency, high reliability, and increased availability. That all sounds great, but what does it mean for you as an investor? Here is what you need to know about investing in 5G.

Why You Should Invest in 5G

Many investors are looking to find the next big innovation in the tech industry and this technology has the potential to make many savvy investors very wealthy. Since 2018, 5G has been slowly rolling out through telecom companies such as AT&T, Verizon, and T-Mobile. In order to take advantage of 5G, a consumer or business must have a 5G enabled device. These devices are just now starting to come out.

The leading US smartphone manufacturer, Apple has just announced their first 5G capable device, the iPhone 12. As any tech investor knows, Apple has a significant impact on the technology industry, and iPhone users are much more likely to upgrade their device to the latest device compared to Android users. With the release of the iPhone 12, a surge of 5G consumers will crop up. With this upcoming jump in adoption, 5G can be a very attractive technology to invest in.

Pay Attention To The Political Aspects

One thing you need to watch for as an investor in 5G, is the political component involved. The United States and China are currently undergoing a battle over the 5G technology. Chinese tech giant Huawei has been a hot topic in the cybersecurity world as many experts believe Huawei can pose a threat to national security if allowed to provide 5G cell towers in the United States.

Last year, Donald Trump the former President signed the Secure and Trusted Communications Act, with the goal of protecting our networks in the case of national security, and specifically 5G. This year our newest President, Joe Biden, vows to invest heavily into 5G and other technologies by proposing an accelerated research and development investment of $300 billion over 4 years to create millions of new jobs and propel the United States further in technology innovation worldwide. The proposal comes with the goal of not allowing China to surpass the United States in research and development, as they are currently on pace to accomplishing.

Understand the Risks

Anytime a new technology emerges, it poses a risk to investors. If the technology is successful, investors will enjoy the benefits, but like all new technology, there is no guarantee. In addition to the aforementioned political component and concerns surrounding national security, many believe 5g poses a health risk. While this may or may not be true, it can greatly affect the outcome of the 5G technology and whether or not it ends up being a worthy investment.

Groundbreaking new technology can be an exciting time for an investor, but it's not an easy thing to accomplish successfully. Paying attention to current trends in the technology industry, watching the presidential election closely, and understanding the risks of investing in something that has been a controversial topic over the years can greatly help you in your goal of being an accomplished 5G investor.

For more tips on investing in 5G, contact us today. Learn what #1 stock is poised to benefit from 5G! Here's a little secret — that stock isn't AAPL. We have our eyes on a company that's under the radar and set to take off over the next several months.

Stocks 101 : Everything You Need to Know About Investing in Stocks

Sat, 13 Mar 2021 00:41:02 GMT

Are you planning to invest, but you feel intimidated by the technicalities involved? Worry no more, as you've come to the right place! Educating yourself on where to put your money is the first step to a successful investment.

Investing comes with risks and uncertainties. However, starting somewhere is a must. Even the most iconic investors that you look up to had to start from scratch, which is learning. So let's lay the foundation and start your investing journey.

What are Stocks?

A stock or share is a financial instrument that represents ownership in a company or corporation. It represents a proportionate claim on the company's assets (what it owns) and earnings (what it generates in profits). Stock ownership implies that the shareholder owns a slice of the company.

Now, your slice is equal to the number of shares held, in proportion to the company's total outstanding shares. For example, an individual or entity that owns 1,000 shares of a company with 10,000 outstanding shares would have a 10% ownership stake. Just know most companies have outstanding shares that run into the millions or billions."

In layman's terms, stocks are a way of building wealth. This means that you invest your money in a company's shares issued in the stock market, thereby becoming an owner. It's that simple! Individuals invest in stocks of successful companies, while for companies, this is a way of raising funds.

Even after investing in a company's stock and being an owner, you don't have to participate in the daily affairs of the company. However, you maintain your right to vote in meetings if you choose to. Most investors hardly attend meetings or vote. Their primary aim is to earn from their investment, which may be achieved in two ways:

Share dividends paid from a company's revenue.
Profit from the sale of appreciated shares.

How Stocks Work

Companies need funds for growth investment, new product launchings, and expansion. Issuing shares is one of the ways companies meet this need, and that's where you, as an investor, come in.

When shares are issued in the stock market, they can freely exchange hands amongst investors. Therefore, the inconvenience of getting stuck with a non-performing investment is eliminated.

Steps for Successful Investment in Stocks

The following thought through steps provides a comprehensive guide to existing investors.

Determine your Goals and Risk Tolerance

Set realistic goals and avoid comparing yourself to already successful investors. However, emulate them and let them hold your hand in this journey.

Risk tolerance is critical, as it's the ability to withstand losses when your investments perform poorly. Ask yourself…how much of a drop in the market can I stomach? If your tolerance is low, you should consider a conservative investing approach. For example, a greater portion of your portfolio might be in low-risk bonds and a smaller portion in higher-risk stocks. Knowing your risk tolerance helps create a game plan, which will, in many ways, lead your investment journey.

Research and seek advice on the best brokers before risking your hard-earned cash. Once satisfied, open a brokerage account with the best stock investors in the market.

Choosing of Account

To invest in stocks, you need an investment account, and there are different types to choose from. For the hands-on investor, this typically means a self-directed brokerage account – this is where you control your future earnings. Other investors might seek assistance through a Robo-advisor. Each is an option, as both allow you to open an account with very little money. However, an online brokerage account likely offers your swiftest and least expensive path to buying stocks, funds, and other investments. Just remember to evaluate costs (trading commissions and account fees), investment selection, and investor research tools when evaluating your broker of choice. With a broker, you can open an individual retirement account (IRA), a taxable brokerage account, or even a custodial account. Yes… it's a good idea to start your child's investment journey early. If your child has no taxable income, consider opening a custodial brokerage account under the Uniform Gift to Minors Act or Uniform Transfer to Minors Act."

There are different accounts investors can choose from. Compare costs associated with each account and opt for the one that meets your needs. Most firms have accounted for children; thereby, you can choose to make a future investment for them.

The stock market is associated with risk. Never risk more than you can afford to lose. Research shows that investors who start small have a higher chance of growth than investors who start big.

Invest in What You Understand

Choose your stocks wisely to avoid disappointments. Thus, a great way to start is by evaluating where you spend your money. Is there a particular service or product you find yourself regularly purchasing? Do you have a keen interest or above-average knowledge of the automotive, video gaming, or any other industries? Take time to evaluate your answers to each of these questions."

Hire the services of a reliable investors advisor who will recommend how to diversify your portfolio.

Now it's time to do the research, as you want to develop an intimate understanding of the companies you choose to invest in. Remember…when you purchase a slice of the pie, you're instantly a proportional owner of the company – it's important to understand where you place your money. Educate yourself by visiting the company website, reviewing the financial statements, and reading various articles to determine if the company is worthy of your investment dollars.

Know When to Buy or Sell

Buying low and selling high is a fundamental rule of investing. However, many fall victim to the herd mentality. This means purchasing or selling with the herd. Take a moment to imagine a herd of elephants running wild and the resulting effect – I'm sure you get the point. This is why it's important you do the homework and identify what you believe the stock is worth (a stock's price target). Aside from doing your research, relying on analysts' price targets or the recommendations of financial newsletters can be good starting points, as long as you remember, these are only the opinions of others. Knowing when to buy or sell is a personal decision, made easier when you've done the homework and continue to educate yourself upon your current or future company."

Selling when prices go up and buying when prices go down is the fundamental law in any investment. Keep on educating yourself on the performance of the stocks you've invested in to know the right time to buy or sell.

Conclusion

Investing in the stock market has contributed to generational wealth for numerous families. If they're willing to set aside the time, why should it be any different for you? The key is getting started, so use the above steps to start or improve your investment journey."

With the above easy steps, anybody can invest in stocks and make good returns.

If you plan to invest, or you're already investing in stocks, but need more advice, feel free to contact us today, and we will be more than willing to assist.

Investing Vs. Gambling: Which Style Suits You?

Fri, 05 Mar 2021 03:57:52 GMT

Is investing the same as gambling? Which investing style suits your needs? Both involve some level of risk, and sometimes they can be thought to be similar. However, in reality, they are quite different. Typically, investing lasts a lifetime, while gambling is short-lived.

To help you decide the best place to put your capital this piece tackles the key differences between these two options. Keep reading to learn more.

Risk involved

Investing and gambling involve some level of risk. However, with investing, the level of risk can be reduced by diversifying your portfolio and spreading your capital across different asset classes such as real estate, stocks, and equities. That way, when one asset class is exposed to risk, the others help minimize the potential losses.

That is not the case when it comes to gambling. Risk cannot be spread, and that puts your entire capital in jeopardy. All of it is exposed to risk.

Different frames of viability

In investing, you have to wait for a specific period before you start receiving your investment gains. Some asset classes will pay off earlier than others, and there is nothing wrong with that. Generally, long term investors are willing to take on more risk for higher rewards than short term investors.

To be sure about the nature of rewards to expect, it is important to ensure you have complete information on all potential investment options. This is because both short-term investments and long-term investments reward differently and at different times.

Your investment can also become an alternative income stream — for example, when you start receiving monthly interest payments. Not to mention you could also benefit from capital gains.

Gambling is a one-off event. You place a bet and expect to have your gains immediately after the event. And please don't confuse short-term investing with gambling. They share some similarities but aren't the same thing.

Besides, the gains of a gambler come in a lump sum. Once you get the initial gain, that is all — no further income stream as it is with investment.

Game of chances

Gambling is a game of chances. You can win or lose, and the possibilities of losing are always high if not careful. That increases the level of risk as you don't know what tactics your opponent will use. Essentially, to win in gambling, you must remain focused and, most importantly, be ready to act first.

With investing, the chances of all parties winning are higher. For example, if stocks in a certain exchange increase, all investors receive capital gains. The best thing with investing is that you aren't forced to focus on the other investors' move to gain. You only need to remain focused on your strategies.

Access to key information

With investing, you have access to all information you need to make an investment decision. Information on the various types of investment is easily accessible, and you can use it to establish future performance and gain insights on which investment option is most appropriate. This privilege to access this information makes it easier to reduce the uncertainty and mitigate risks surrounding investing.

Meanwhile, with gambling, there is little information out there to count on. This is because gambling agencies aren't allowed to reveal any information to you. Just walk into any casino near you and try to gather information. Often you will have access to the general information, which means you go in blind hoping for the best. You won't know what happened an hour, a week, or a month ago to be able to make a sound decision.

Bottom line

Both investing and gambling have the possibility of risk and win. However, investing is a less risky option as it allows you to diversify hence minimizing loss. On the other hand, gambling is a game of chances— you rely on luck.

For that reason, you are better off choosing an option that doesn't force you to rely on luck. Need help to get started on the right foot? You can contact us or head over to our member site as we teach members how to invest in great companies that are yielding double and triple-digit returns.

How the "Lipstick Effect" Drives Sales During Recessions

Fri, 05 Mar 2021 03:57:11 GMT

With the U.S. experiencing a slight recession in 2020, it's easy to assume the beauty industry would take a big hit. However, this is far from the truth. The "Lipstick Effect" claims lipstick sales actually rise in times of recession, but why? Let's take a look at this theory and if it holds up.

What is the Lipstick Effect?

The "Lipstick Effect" is the theory that when the economy is on a downturn, consumers nix high-priced items and instead opt for smaller indulgences, like lipstick and other cosmetics. It goes on to state that makeup and other self-care items are purchased with the intent to pamper the consumer and keep up their self-confidence during difficult times.

A study summarized in Psychology Today claims this theory is much more ingrained in men and women's consciousness than previously thought. The research suggests that in times of crisis, women's brains are hardwired to look their best in order to attract a suitable mate. Amid economic downturns, as financially secure mates are less available, evolutionary theory offers that there may be more competition, and therefore more incentive to boost attractiveness in order to acquire a reliable partner.

Recessions and cosmetic companies

Time and again, the cosmetic industry showed recessions don't seem to affect them all that much. The 2008 recession, which was one of the biggest economic downturns since the Great Depression, didn't cause cosmetic giant L'Oreal from losing money. In fact, the brand saw its sales increase 5.3% during that tough year. With the government called upon to bail out various financial institutions, increasing revenue during that time was a major feat.

The lipstick effect trend goes further back than 2008 too. During the Great Depression, when millions were jobless and industrial production was cut in half, cosmetic sales increased . The same thing happened during the recessions of 1990 and 2001 — manufacturing jobs steadily decreased, yet jobs in the cosmetic sector went up.

The 2020 recession

The financial situation in the U.S. was officially dubbed a recession by mid-year , but this time it had a very different look from the ones of the past. First off, this one wasn't caused by financial factors instead, it was due to a health crisis (COVID-19). Second, the shutdown that took place because of the global pandemic happened rapidly and quickly caused many to seek unemployment benefits.

The 2020 recession might be named the "cosmetic effect" instead of the lipstick effect, simply because the global pandemic and mask-wearing have decreased the need for lipstick. The market for cosmetics is still booming, it's just changing based on the realities of daily life. With more people working from home, self-care is more prominent. Skincare products, even men's grooming products, have seen an increase in sales. With mask mandates throughout the country, women are focusing more on their eyes, boosting mascara, eyeliner, and eye shadow sales.

Second-quarter 2020 sales for beauty chain Ulta Beauty took a dip of 26.3% as stores remained closed throughout June. While stores had to contend with capacity and social distancing restrictions, by the end of the year, they started reopening their salon and brow services. Towards year-end, the stock price started to rebound from the lows it reached in the first and second quarters of 2020. Coty, Inc., a multinational beauty company, had similar results, with its net revenue falling 22% during its June 2020 year-end.

If you want to learn more in-depth about the lipstick effect and how it is impacting the industry, make sure to watch our IGTV here where we talk to a professional in the space!

Brown Investors is dedicated to educating you about the stock market and how investing is the way to secure your financial future. If you have any questions or are looking for more information, please contact us or visit us on Facebook or Instagram .

Path to $1,000,000+

Wed, 03 Mar 2021 17:41:57 GMT

Would you pay $10,000 today in return for $1,000,000 tomorrow?

Easy question, right? Not exactly...

If you invested $10,000 in a company today and the share price dropped 50%, it's not so easy to stomach the drop. However, if any lessons have been learned, those lessons of wealth creation are often discovered with the power of patience.

2020 was an unpredictable year but the fundamentals of investing remained the same. The fundamentals such as:

1. Buy companies that you understand

2. Wait patiently for the share price to reflect the company's true value

3. Focus on companies with growing revenue, low debt/restructuring of debt then allow compound interest to work in your favor

Sounds simple but so many investors get caught up in the news and price targets and the list goes on that the fundamentals are lost and so are the potential profits.

Did you know 10,000 shares or a combination of any the companies featured in the charts is worth a minimum of $100,000 -$1,000,000 today. If you had bought 10,000 shares of Pinterest, Stitch Fix or GameStop when we first recommended them to members here and held until January, then you would be looking at $1,000,000 in your investment portfolio in less that a 12 month period. Wow!

That should be exciting, right?

Patience is POWER (<= watch this $$$)

If you watched the video above, I hope you can feel the energy because there is so much power in patience.

And if you're still not convinced, keep reading...

If you had bought Coty at $2.89 and held on to it, your initial investment would have more than doubled.

If you had $5,000 (732 shares) invested in Gamestop at $6.83 when we first recommended it in September and sold at its peak then your portfolio would have increased 50-fold by selling in January at it peak.

Coty and Gamestop while profitable in different ways show two important sides of holding and selling. With Coty, it is a growing company that is below its intrinsic value. So it would be a great example of staying the course with the power of patience.

On the other hand, when Gamestop grew to over 3,000% this was a quick win and a lesson from Warren Buffett "Be fearful when others are greedy".

Cue the confetti: TIME TO SELL!

Companies trading well above their intrinsic value can be dangerous territory especially when you're unsure of where the top may be.

Essentially, buying and holding is equally as important as knowing when to exit. Check out the Stock Up Guide we provided to Members in November 2020 as you continue your investing journey because the best investment advice ever received is that "PATIENCE IS POWER."

What is Cryptocurrency?

Thu, 25 Feb 2021 00:58:55 GMT

Financial literacy is not an education you can get in most schools, yet it is some of the most important information you can learn. Increasing your financial education can put you on the right track to meet your financial goals.

Brown Investors wants to help bridge that gap for you and increase your financial education. For example, cryptocurrency is one of the least understood investment methods, but investing in it could be the key to your investment success.

What Exactly is Bitcoin?

Think of Bitcoin as digital currency. There is no physical money associated with it, and exists online only as a way to securely make payments and investments. The value of Bitcoin does change, making it a volatile investment strategy, but one that could payoff if you are patient. Like the stock market, investing in Bitcoin is something you should do over a period of time, and not pull out all your money solely because you see a spike or dip in pricing.

Making use of peer to peer technologies, Bitcoin has become the easiest, safest, and quickest way to make payments online.

Pay Online Securely with Bitcoin

You can now use Bitcoin on such platforms like PayPal, Square, and Cash App. If you have been victimized by a hack and had to replace your credit or debit cards, you might be on a mission to find a more secure online payment method — Bitcoin is an option. While you can easily make payments with this type of currency, it also keeps your personal information anonymous and protected, meaning hackers cannot get your credit card and banking information, saving you headaches down the road.

Bitcoin Could Surge if Dollar is Devalued

From an investment point of view, keep an eye on Bitcoin. As inflation increases, the value of the dollar decreases, but the value of Bitcoin is only going up. With Morgan Stanley predicting a 10% drop in the dollar within the next year, Bitcoin is likely to hold its value or see an increase. There has never been a better time to get in on Bitcoin, as the value of your investment stands to soar in the coming months and years.

The world is becoming more and more accepting of Bitcoin as a payment method, so this is a good time to not only learn about Bitcoin, but cryptocurrency in general.

Other Cryptocurrency

Oftentimes, you will see the term "Bitcoin" used instead of the word "cryptocurrency" kind of like we sometimes say "Kleenex" when we should say "tissue." While Bitcoin is the most popular cryptocurrency, there is another that you should be aware of as well. Ethereum has gained in popularity in recent years.

Ethereum is the second most popular cryptocurrency behind Bitcoin, and another great currency. The biggest difference is that Ethereum uses its own programming language and Bitcoin does not. Like Bitcoin, it is used as a digital currency, make payments, and store value.

When you invest in stocks, you typically diversity your portfolio, thus you should carry the same mindset, if you choose to invest in cryptocurrency.

What's Next?

For more information about Bitcoin and cryptocurrency, continue to follow Brown Investors on our social media platforms — Instagram and Facebook. We regularly share links and pointers to help increase your financial literacy, so you can make educated investment decisions.

For those of you who like to read, check out this white paper by Satoshi Nakamoto , as it too can help you gain a better understanding of Bitcoin. Reach out and contact us today as our team is standing by ready to answer any questions you have about cryptocurrency!

Post-Election Recap: BI Outlook

Tue, 05 Jan 2021 18:47:54 GMT

What's on the horizon post-election?

With the election over, I often find myself contemplating what is on the horizon. I'm frequently asked, "What's next?"

Numerous businesses closed forever and millions have lost jobs. Companies that managed to stay afloat are counting huge losses.

However, many businesses had an opposite experience, many would even call them "recession-proof." But not exactly in the sense that they weren't hit. But more like, they fared better than you anyone else would expect.

There are industries that thrive when their counterparts are dwindling. And most of these industries are what you would term service industries.

Here are some of the industries that did well this year and are coming out strong post-election:

Beauty Industry

When considering investing in an industry, few people think of the economic endurance of the industry. And it only hits them when it's too late to turn back.

While it's true that no industry is fully recession-proof, it is also true that some are more resilient than others. And you can say this about the beauty industry.

During financial difficulties, few people would consider indulging in luxury services. But most people try to pamper themselves to some degree, simply for a mild escape from the rigors of everyday living.

The economic theory of the lipstick effect is truer than most can ever imagine. It will surprise you to note that people typically increase their supply of beauty products in depressing times.

Services such as barbering and eyebrow shaping can withstand almost any difficulties. Can you picture a society of overgrown hair and eyebrows?

Beauty companies such as ULTA and Sally made it through the recent depressing times with no sign of being in the same world we all live in. The sales of both companies improved this year and will continue to do the same.

The entire cosmetic market is set to grow by at least 6% in the coming years.

Food and Drinks

People need to eat whether there is war or peace. In both good and bad times, people will not do away with eating. It's a necessity for our survival, after all.

Although more people started making their meals during the recent financial difficulties, it didn't put restaurants out of business. Take outs and deliveries were still an option.

Restaurants such as Chipotle almost tripled in profits for their digital orders and are one of the companies looking forward to coming out strong post-pandemic and the coming years.

Surprisingly, even candy and sweet companies thrived. Who would think that so many people turn to sweet treats for comfort?

Grocery stores also make the list of those that thrive. It's impossible to ignore how many people flocked to the local store to add supplies. Although most did so in a panic, the stores made more sales than they had in years.

It reached a point where demand exceeded supply. But luckily, the situation did not last long.

Energy

Although the economy is volatile, the energy industry always manages to stay afloat. When oil companies did not fare as well, renewable energy did. After all, people still need to light their homes and power other aspects of their lives.

Marijuana Industry

Indeed it's been wonderful a year in this industry. And although the marijuana industry is not recession-proof, it's worth a feature in this article.

Many states are legalizing marijuana for either recreational or medicinal uses. And in most cases, it's legal for both. Soon, a lot more states may create policies that allow its lawful use.

Marijuana legalization was on the 2020 presidential ballot in at least five states. And of course, Marijuana. The next obvious step is for the states to create regulations and policies which will provide vendors with permits.

Tech and Implications of Biden Win

The tech industry has shown dominance that people once lauded. Now, not so much. There are several antitrust issues that the former president wanted to address.

While there are more pressing issues at hand, this is still a matter that has investors on their toes. Reining in the tech giants will not be an easy task. And reforming the decades' old laws may also be a challenge.

Current law protects tech giants (like Twitter) from being liable for the posting of others. Penalizing Twitter and other platforms alike for hate or racist postings means reforming the law. However, will Biden be a proponent of this effort?

All in all, it's too early to tell what is cooking in the president elect's mind.

Bottom Line;

The future looks brighter post-election. And everyone hopes that it stays so. Although some industries are more economically resilient than others, many of the affected sectors are on the pathway to recovery.

Be sure to follow us on Instagram or check our offerings page to sign up for the next webinar!

Getting Started with the Market

Wed, 23 Dec 2020 12:43:01 GMT

At 9:30 am, Monday – Friday, the proverbial ringing of the bell signifies the opening of the stock market and it’s off to the races. So if you’re ready to get started, but feel intimidated by the technicalities involved or are simply unsure where to begin… Worry no more, as you've come to the right place! Educating yourself on where to put your money is the first step to a successful investment.

Now, investing comes with risks and uncertainties. However, starting somewhere is a must, as even the most iconic investors had to start from scratch, which is learning. So let's lay the foundation and start your investing journey.

What are Stocks?

In the basic premise, stocks are a means of building wealth. You purchase shares of a company, thereby becoming an owner, with the goal being to increase your wealth via share appreciation and/or dividend payouts.

Companies need funds for growth investment, new product launchings, and expansion. Issuing shares is one of the ways companies meet this need, and that's where you, as an investor, come in.

Steps for Starting Your Investment Journey

1) Determining your Goals and Risk Tolerance

Remember to set realistic goals, not comparing yourself to others. Investing is a marathon, not a sprint.

2) Choosing an Account

To invest in stocks, you need a brokerage account, and there are different types to choose from. If your focus is retirement, an IRA is generally your best bet. However, if you want the freedom to withdraw funds as needed, you likely want a traditional brokerage account. And of course, you can open multiple accounts to fit your varied needs.

When evaluating your future broker of choice, compare pricing (trading commissions and account fees), investment selection, and investor research tools. Each plays a pivotal role in your investing experience, so do your research and ask questions. Several brokers even have a demo version of their respective trading platform, which allows you to make the best decision possible.

3) Investing in What you Understand

Now it's time to do the research, as you want to develop an intimate understanding of the companies you choose to invest in. Remember when you purchase a slice of the pie, you're instantly a proportional owner of the company – it's important to understand where you place your money. Educate yourself by visiting the company website, reviewing the financial statements, and reading various articles to determine if the company is worthy of your investment dollars.

4) Knowing When to Buy or Sell

Buying low and selling high is a fundamental rule of investing. However, many fall victim to the herd mentality. This is why it's important you do the homework and identify what you perceive a company to be worth or simply the valuation of the respective stock (a stock's price target). Aside from doing your research, relying on analysts' price targets or the recommendations of financial newsletters can be good starting points, as long as you remember, these are only the opinions of others.

Knowing when to buy or sell is a personal decision, made easier when you've done the homework and continue to educate yourself upon your current or future company.

Conclusion

Investing in the stock market has contributed to generational wealth for numerous families. If you’re willing to set aside the time, why should it be any different for you and your family? The key is getting started, so use the above steps to start or improve your investment journey.

Don’t let fear delay your journey to financial freedom! We believe the only difference in guru investors and ordinary people, is the know how to take capital small or large and multiple it with compounding returns. The purpose of Brown Investors is Bridging the Gap in financial literacy.

If you plan to invest, or you're already investing in stocks, but need more advice, feel free to contact us today, and we will be more than willing to assist.

No Tricks, All Treats: Seasonal Stocks Positioned for Takeoff

Sat, 31 Oct 2020 16:45:19 GMT

Tis' The Season - This Will be Scary Good

Hello Brown Investors,

"Trick or Treat, Smell My Feet, Give Me Something Good to Eat!" Bring back any childhood memories of trick or treating in the neighborhood? Even though children may or may not trick or treat this year due to the ongoing pandemic, seasonal stocks are certainly a great treat for investors in our community. If you attended our August webinar, we mentioned Federal Express and showcased data around the company. Visit Yahoo Finance or Seeking Alpha to obtain additional information, as having a better understanding of the data, will ultimately aid you in making the best possible decisions. Take a closer look at some of the opportunities awaiting you.

Seasonal Stock

When it comes to investing, understanding trends is just as essential as understanding the financial elements. Seasonal stock reflects an influx in demand for products or services for a certain time frame. In many ways, this is a classic case of wanting to work smarter vs. harder. Here are a few places to get started when it comes to the fall and seasonal stock.

Federal Express

Federal Express is one of the most well-known business names in today's day and age. The delivery service company, better known as FedEx, has been an important part of the business industry since 1971. With the holidays swiftly approaching, delivery services are getting busier. From online shopping, to holiday-themed care packages, there are an abundance of reasons individuals find themselves interacting with Federal Express during this time of year. Now more than ever, given the circumstances surrounding COVID-19, people are relying on Federal Express. People who may have used the holidays as a time to visit or get out to shop are most likely seeking alternative options, and many of those options are going to involve Federal Express.

Bed Bath & Beyond

Bed Bath & Beyond is another amazing place to turn for seasonal stock at this point of the year. Bedding, kitchen, dining, and home decor are just a few of the categories customers have the chance to explore. The store that is known to have everything a home could ever need, definitely tends to get much busier when college students return to campus. Many freshmen spend the first few weeks or even months, making shopping runs and placing online orders to hectically purchase all the things they didn't think of or simply forgot. Since the global pandemic may have altered the timelines of both students and universities, it is safe to say colleges can expect an unusual volume of students beginning their housing contracts for the spring semester. These are just a few reasons Bed Bath & Beyond is an excellent place to begin with seasonal stock.

Party City

Party City is a beloved staple of the holiday season. Party City prides itself on making "unforgettable moments,” and they most definitely have the supplies to do just that. Halloween costumes are one of the biggest attractions during this time of year, and even though many people might not be trick-or-treating; many families are still celebrating at home. Speaking of home, decorating the house is another activity that so many people enjoy. For these reasons, Brown Investors would be wise to consider this option.

Connect with the Brown Investors Team

Learning about seasonal stock is game-changing. When working with seasonal stock, investors have a new opportunity to grow their portfolio. Email admin@browninvestors.com if you'd like to gain access to our top 2 resources for understanding seasonality. Access your membership at www.browninvestors.com and check out the seasonal stocks we're eyeing now. Brown Investors truly understands the importance of investing and are here and happy to help with all of your seasonal stock needs.

2020 Election - Will it Shake the Market

Wed, 30 Sep 2020 15:05:55 GMT

If you watched the September 29th presidential debate, I'm sure you walked away with a mixture of disbelief, concern and astonishment regarding the level of conduct on display. I personally wanted to "scream" for President Trump and former Vice President Biden to stop with the insults. Because like all Americans, I'm heading to the polls with varied emotions due to social unrest, an economic downturn occasioned by the COVID-19 pandemic, and a myriad of other issues. And as an investor, I'm sure you're wondering what you should be doing; so allow me to give you some information...

What Investors Need to Know About Politics and Market Performance

There is no denying that presidential elections affect an investor's regular life by impacting financial markets. A keen look at the past 75 years through Democratic and Republican administrations reveals that a superior market performance cannot be attributed to either of the political parties. Politics has some influence, but since political administrations by either party have seen economic expansion and good financial market performance, it is not entirely predicated upon the winner of a presidential election.

While political patterns between the presidential election's winners and the market's performance continue to be drawn, as an investor you should be more concerned about tightening the nuts in your investment goals irrespective of the outcome of the November polls.

How Investors Can Make Sound Investment Decisions Amid the Presidential Election's Uncertainty

What's next after the presidential elections? What does a win by either side portend for my investment? These are arguably the biggest questions rocking every investor's mind in the run-up to the presidential elections. With all the events taking shape as we edge closer to the presidential election, you might tend to feel apprehensive about making new investments.

Uncertainty ensuing from the result of the presidential election affects the financial markets; therefore, having access to the right investment knowledge and advice is vital. Enhance your investment understanding by accessing our spot-on investment resources to bridge any financial literacy gaps you might have during these anxious times for investors.

What History Can Teach Us About the Impact of US Presidential Elections On Markets

If history is something to go by, then S&P 500 Index data dating back from 1928 to 2012 shows that past elections have impacted stock market returns. Remarkably, more positive market performance than negative has been witnessed over the last 23 presidential elections, meaning that stocks tend to gain more often.

However, in certain years when there were extraordinary circumstances such as the nation being at the brink of war, a financial crisis, or a depression, market performance went down. With the COVID-19 storm still a very real prospect for the country, the implications of a win by either President Trump or former Vice President Biden remain to be seen. Consequently, if you want to feel more secure about your financial future, investing in the long-term could be a more unwavering endeavor.

To Invest or Not to Invest

Should I continue with my investment plans now, or should I defer? The answer to this question lies in the results of your investment. Studies show that partisan investors compare unfavorably to bipartisan investors. Additionally, the more time and investment you expend in the market, the bigger the bite you take out of the progressive financial performance apple. Over time, US markets have always withstood whatever result the presidential race throws at them, and thus as an investor, you are better off proceeding with a strategic investment strategy regardless of who wins the race to the White House.

If you are dealing with thoughts on whether to pull out completely or put your investment on hold, don't overthink it. The best thing you can do is to stay the course. Though the presidential election poses some short term volatility, staying the course and remaining upbeat about the investment decisions you've made thus far is the right choice. Drawing back on your investment journey could cost you tens of thousands and maybe even millions down the road, when investments will not be on shaky ground.

Bottom-Line

Remember that you will live with the investment choices you make today. Therefore, you should strive to strategically make excellent investment choices. At Brown Investors, we believe that now is always the time to make money, and we are committed to helping you get your investment decisions right. Every great company has to weather volatility at some point and that's why we are rallying and helping investors in the BI Community stay the course. Want to learn more? Check out and take advantage of our socially conscious investing offerings by getting in touch with us today .

Bridging the Gap!

Brown Investors

School's Back in Session: Here’s All You Need to Know About Stock Splits

Sun, 20 Sep 2020 20:30:07 GMT

BI Family...2020 has been a year for the ages and will not be forgotten anytime soon.

A lot has happened this year. The market crashed in the first quarter, which presented an incredible buying opportunity for those of you in our community. Stamps and WPX were quick wins for Brown Investors with 100%+ gains.

With all that's happened, we recognize there's still so much confusion around how to profit and grow your investment in today's climate. From IPOs to stock splits, some of these terms are still unclear. This is why we're writing this special edition newsletter because something incredible recently happened. You guessed it! Two companies you likely have heard of are now trading at a much lower price because of a stock split; Tesla 5:1 stock split and Apple 4:1 stock split.

What are Stock Splits?

Stock splits are corporate actions by a company's board to increase the number of its outstanding shares by dividing them into multiple shares. This, in turn, reduces the share price without affecting the company's market capitalization or the value of a shareholder's stock.

So, why would a company decide to perform a stock split?

A stock split commonly happens when a publicly-traded company's stock increases in value too much that new investors are unable to buy the shares. At this point, the quoted market price per share becomes too high, affecting the market liquidity as fewer people can purchase the shares.

Stock splits are usually calculated through a 'ratio' arithmetic. For example, the Tesla stock split was a 5:1, while the Apple split was a 4:1. These ratios show how the shares were split; the Tesla stock had every share divided into five, while the Apple split had every share divided into four.

What Happens in a Stock Split?

A stock split does not make the current investors richer, at least not right away. The investors will have more shares, but the shares will have less value, which means that an investor's total value will not change at all.

The stock split is, however, positive news for an investor. Even though their investment will not change, announcing a stock split shows that the company's board wants to attract new investors by increasing the number of shares in the market and reducing the price per share. With the price reduction, it is easier to move your stock in the current market as more people can afford it.

In theory, the increase in demand due to the price drop will be matched by the increase in supply due to more shares available in the market. You are, however, bound to make a handsome return on your portfolio if the stock continues to appreciate.

Reverse Stock Splits Explained

Companies perform reverse stock splits to boost their stock price by reducing the number of shares outstanding. The company cancels its current outstanding stock and redistributes fewer shares to its shareholders in proportion to the shares owned before the reverse split.

If a company offers a 10:1 reverse split, it will cancel its shares and reissue a share for every 10 shares previously owned. If a shareholder owned 1,000 shares before the split, the shares are revoked, and they only receive 100 shares after the split. The total value of the shares held by a shareholder would, however, remain the same, just like in a stock split.

Reverse stock splits are usually done after the company's stock price has dropped significantly to prevent the company from being delisted and to maintain its reputation. It is usually bad news for the investors, but it may cause the price of a company's stock to rise from the level of over the counter trade to a significant stock exchange level trade.

Want More Investment Tips?

Join our membership today to learn more and access companies that are still great buying opportunities. Be sure to follow us on social media or check our offerings page to sign up for the next webinar!

Kids, College and Debt...Why start a brokerage account?

Tue, 12 May 2020 11:38:53 GMT

We have good and bad news, friends. Let’s start with the bad.

Here it is…

for those of you with school-aged children, school is out for the remainder of the year.

What we once knew as normal before COVID is no longer...

The good news is that now is the perfect time to explore custodian brokerage accounts for your kid(s). Your kid(s) will be sure to give some extra sweet kisses for helping them start early.

It is important to know your options when you begin to invest in your child’s future. There are several different options to choose from, and pros and cons to each. Brown Investors is happy to help you understand these options and make an informed decision!

529C Plans

The U.S. Securities and Exchange Commission defines a 529C plan as a tax-advantaged savings plan designed to encourage saving for future education costs. They are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code.

Peterson’s, a leading educational services company, has noted the pros and cons of a 529C plan.

PROS:

529C plans are tax-deferred investments so your withdrawals will most likely not be taxed unless the amount distributed is greater than the beneficiary’s adjusted qualified education expenses, according to IRS Publication 970. You will be taxed if there is money left over after your children finish their education.

The money that you contribute to your child's 529C plan can be transferred from state to state, so your child can be free to consider out-of-state schools. The funds can also be transferred from family member to family member in case one of your children decides not to pursue higher education.

In most states, your 529C contributions will be invested in stocks and bonds to try and grow faster than a regular savings account. Some plans offer an automatic investment option, which withdraws a certain amount of money each month from your checking or savings account for an easy, hands-free investment plan.

CONS:

The money invested into 529C plans has to be used for college tuition. If you withdraw the money with the intention of using it for something other than college tuition, you will be penalized by 10%. Your state and federal government will tax the earnings on your account in your current tax bracket.

Although you can contribute as much as you want per year to your 529C account, be careful that you’re not saving too much. If you have a surplus of money in the account after all your children finish college, that money might be penalized and taxed by your state and federal government. It’s better to underestimate tuition costs and save an amount equal to the cost of four years of college at an in-state, public college.

Before investing in a 529C plan, make sure to research on where your money will be invested and the risk level of the investment. If you move your money from the fund without paying for education, you’ll be subject to that 10% penalty.

Advantages of a Brokerage Account Over a 529C Plan

Another, more flexible investment option for college tuition is a brokerage account. Depending on the state you live in, you can use funds deposited in these accounts before your child turns 18 or 21 for any purpose that benefits your child (like buying clothes for school).

Once your child reaches the right age, they can use the money in their brokerage account for any purpose without consequence.

Brokerage accounts function like a regular investment account, so you have more investment options to choose from (exchange-traded funds (ETFs), mutual funds, individual stocks or predesigned options, to name a few).

Unlike a 529C account, brokerage accounts do not offer many tax advantages. Any growth when you take funds out of the account or dividends may be subject to income taxes. However, since these accounts will belong to your children, they will be taxed at their tax bracket.

Similar to a 529C account, friends, family members, parents, and guardians can contribute to brokerage account. These accounts are both considered gifts and are subject to gift tax.

If any one person’s contributions exceed $15,000/year in a brokerage account, they will be subject to gift tax. (Married couples can contribute $30,000 together annually without getting taxed).

Brokerage accounts become the child’s irrevocably and can’t be used by a parent in any way except to benefit the child. They are also weighed more heavily than 529Cs when it comes to financial aid and Federal Student Aid calculations.

Compound Interest & Albert Einstein

Albert Einstein is quoted as calling compound interest “the eighth wonder of the world” and “the most powerful force in the universe.”

“He who understands it, earns it,” Einstein said. “He who doesn’t, pays it”.

Investopedia defines compound interest (or compounding interest) as an interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan. It will make a sum grow at a faster rate than simple interest calculated only on the principal amount.

In short, compound interest is the interest you earn on your money, plus the interest it has already accrued.

For example, if you start off with $1, and that doubles every day, how much would you have after a week? A month?

Each day your money would double - so on day two, you’d have $2, day 3, you’d have $4, and day 4, you’d have $8. At the end of a week, you’d have $64. After a month, you’d have over $530,000,000.

If you stick to a long-term strategy of investing and saving, you’ll be allowing the power of compounding to do a lot of heavy lifting as you build wealth. Start planting seeds for the future one coin at a time and your funds will grow to meet and exceed your future goals.

Start Now to Build College Savings

Have you ever wished you could help your children build a nest egg before college setting them up for better financial results, create increasing revenue to pay for school, remove the burden of student loans, or even create a financial future where your kid(s) can buy back the block? This may sound like just a dream, but there is a practical path to making it a reality — especially NOW in a time of huge change, crisis, and uncertainty — and I want to share it with you… Here’s the thing: never in our wildest dreams as Brown Investors did we really see why investing in the stock market yields generational wealth when investing is done properly. Seeing our founder graduate from Princeton University completely debt-free was one of the many proof points why every child should have access and every parent should have the right information when building up college savings.

Get started today for your future of tomorrow.

Meet Our Founder and Build Wealth

Tue, 12 May 2020 11:38:53 GMT

Born when her parents were just fifteen years old, Arianna Brown - Founder of Brown Investors - grew up navigating two different lives.

After her birth, Arianna’s grandparents helped raise her while her parents attended well-respected universities and attained success early in their respective careers. Although Arianna’s parents and grandparents worked equally hard to support her, their different levels of access to financial acumen affected their ability to build wealth and advance economically.

Growing up in vastly different financial circumstances was challenging, but it was not until Arianna attended Princeton University that she discovered why the income difference between her grandparents and parents made her uncomfortable.

While at Princeton, Arianna learned about the great financial disparities between black and white families in the United States. She began to think more critically about the racial underpinnings of the wealth gap and the various ways it can manifest across generations within a family.

Arianna realized that her discomfort with her family’s financial dynamic was due to the stark contrast between her grandparents’ and parents’ lives. This helped Arianna discover her passion for stock market investing. An interest of Arianna’s for several years (she began to invest in her Roth IRA at eighteen and day trading at twenty-two), she went on to graduate from Princeton with highest honors where she studied political economies in Latin America.

Leaving Princeton with an investment portfolio larger than most hard-working Americans, Arianna was able to marry her passion for communities of color with her financial acumen culminating in the launch of Brown Investors LLC in 2020.

So here we are and we're excited to have you as a part of the Brown Investing community. Investing is a lifelong practice so embrace the journey.

Below are just a few of our favorite resources to help you get started.

1. Investopedia - We call this the dictionary for investors. Be a sponge!

2. Seeking alpha - Visit seekingalpha.com and connect with investors around the world!

3. TDAmeritrade.com - Open up a brokerage if you don't already have one with our preferred broker for individual investors.

Cheers to building wealth! A little goes a long way...#BrownTruth #BuildWealth