Investing

Here’s What You Should Know About Nikola Stock

July 8, 2020 By Tamila McDonald Leave a Comment

Nikola – the second alternative energy vehicle company to enter the mainstream named after inventor Nikola Tesla – began making waves early this year. Investors believe that the company is worth adding to their portfolio. The stock has had several jumps since trading began on June 4. However, many people aren’t overly familiar with Nikola stock. Nor are they aware of the company as a whole. If you’re considering investing. Here’s what you should know about Nikola stock.

Nikola’s Offerings

Founded in 2015, Nikola focuses on the production of alternative energy vehicles. mainly zero-emission hydrogen-powered trucks. These range from pickups to semis. The potential impact on the transportation sector is significant. There are also possible positive effects on the environment due to a reduction in carbon emissions.

Initially, three trucks were developed. Two of the trucks were intended for potential mass production within the United States and European markets. However, the company did branch out. They added battery-powered variants to its lineup.

The Hydrogen Fuel Battle

By and large, hydrogen-fueled vehicles didn’t appeal to the masses when it came to passenger vehicles. There was very little headway when it came to adding fuel stations, for example. While electric vehicle charging stations were also an uphill battle. More progress was ultimately made in that arena.

But Nikola feels that hydrogen power makes sense. at least from a commercial perspective. By focusing on main trade routes, refueling stations could be placed strategically. The company also believes that for long-haul trucking, it’s superior to battery version due to faster refueling times. Plus, battery packs are heavy. The added weight harms a battery-powered truck’s efficiency.

Existing Deals and Projections

Nikola has already received some sizeable orders for their vehicles. For instance, in 2018, Anheuser-Busch requested hundreds of alternative energy trucks. The company also partnered with Nel to get fueling stations in place. Bosch is working with Nikola to develop truck parts.

Last year, Nikola and European truck manufacturer Iveco settled on a joint venture. This move added more fuel to the fire. By next year, Nikola expects to have at least 600 trucks delivered. They also have a plan for doubling output for the next few years following.

By 2024, Nikola expects revenue numbers near $3.2 billion. That’s based on selling 7,000 battery-powered and 5,000 hydrogen-fueled trucks.

Nikola Stock Prices

Nikola (NKLA) hasn’t been available for long. But it’s already made some headway. After starting with a price in the mid-$30s, the stock’s value jumped. It crossed the $83 mark at one point. Although, it has mainly been drifting between the upper $50s and low $70s.

When the company received its first rating in mid-June. It was quickly labeled a buy. However, the company isn’t expected to make any money during the upcoming year. Many of its truck designs are still in the prototype phase. This includes the newly hyped Badger pickup.

But many believe the company has a significant amount of potential. Particularly since it plans on tapping the transportation, consumer vehicle, and even Powersports markets.

New Ventures Come With Risk

As with all new ventures, there is a risk involved. It isn’t clear whether Nikola will meet its targets. Particularly those associated with production and presales on the consumer vehicle end. This is especially true while the COVID-19 pandemic is still in play. An event that’s created financial hardships for many and put limits on production facilities, group gatherings, and more.

Plus, it’s hard to determine what a reasonable price for Nikola stock looks like. As the company seemed to enter the market at a smart point and may have already reached an ideal zone in the eyes of investors. At least at this stage.

Ultimately, Nikola stock is fairly new. So there isn’t much history to review to figure out whether it’s a wise buy. But, for investors who have faith in alternative fuels or enjoy green investments. It’s worth keeping on the table. If the company can live up to the hype (and its projections). It could be, as some experts put it, “the next Tesla.” However, there is no guarantee. So risk-averse investors may be better served heading in a different direction.

Is there anything else people should know about Nikola stock? Share your thoughts in the comments below.

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5 Tips on How to Short a Stock

June 30, 2020 By Trey LaRocca Leave a Comment

The market has been extremely volatile as of late. As a result, there are many people making ridiculous amounts of money day trading. Day trading, or shorting a stock, is essentially the act of buying and selling a stock in a very short amount of time. This sort of trading is high-risk and is more akin to gambling than investing.

That being said, it can make for much quicker gains than other types of stock trading. The issue is, it doesn’t take very long to lose a lot of money. This is due to the types of stocks people short. To make sure you don’t fall into some major losses, we have a few things you should know. Here is how to short a stock:

Set a Conservative Goal

If you are trying to keep yourself as safe as possible, it is important to set a goal for your gains from the outset. When buying a stock, decide on a percentage gain you are looking to make from it. Once you have chosen this percentage, stick to it. If and when the value of the shares you purchased reaches that goal, sell immediately. Don’t hang on and try to wring extra money out of it, as this is the way that people most often experience losses. On low-value stocks that people like to short, it takes only a few seconds for values to drop astronomically. So, if you are looking to make 5 percent, sell at 5 percent. Most people consider 5 percent gains a good goal for the year. Don’t lose money trying to beat it in a single day.

Set a Stop-Loss Around 1-2 percent

Due to the volatility of shorted stocks, it is important to use technology to your advantage. Most brokerage apps allow you to set a “stop-loss”. Stop losses are values at which your brokerage will automatically sell your shares. These make sure that you don’t look away from your phone and lose 10 percent of your portfolio. For most casual day-traders, you are betting almost your whole brokerage account on each trade. So, set a stop loss of only one or two percent of the current value of the shares when you buy them, and you will ensure that your losses never get worse than 1-2 percent. this will lose you a lot of shares, and you may miss out on a few upswings, but the security is worth it.

Only Short 3 Times Per Week

This one has less to do with strategy, and more to do with the statute. In the United States, you will usually be marked as a “Pattern Day-Trader” if you buy and sell four or more times in a rolling five business-day period. Once you are flagged under these PDT rules, you are required to have $25,000 in your brokerage account to short a stock again. This is obviously an instant disqualifier for many, and so we recommend you keep it to 3 each week.

Join a Group

There are many day trading communities out there. Many of them use live chats to call out what stocks are looking good, which are most volatile (which leads to the fastest gains), and when certain stocks are spiking or falling. This can all be extremely helpful information and can maximize both your gains and your security when shorting stocks. Information is king in the stock-shorting game, and joining a community with a live chat like this is a great way to maximize your information.

Don’t Short a Stock

My best piece of advice for most people who want to short a stock is simple: Don’t. Why do I tell most people not to short stocks? Because most people lose money shorting stocks. In fact, according to the stock trading firm eToro, 80 percent of people lose money doing it. Unless you are going to be as safe as possible, follow this advice exactly. Don’t get involved in day trading. I’ve written another article regarding your personal ability to become a day-trader, even casually. It all comes down to discipline and the effects of a loss on your life. Make a smart decision, and be responsible.

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3 Critical Things You Should Know Before Investing in Gold or Silver

June 29, 2020 By Susan Paige Leave a Comment

Any investment should not be taken lightly, even if you have lots of money to spare. Yes, it’s risky, and you should only spend the money you’re willing to risk it. However, you can manage the risk of losing money when you learn about your investment.

How to Invest in eSports

June 18, 2020 By Kathryn Vercillo Leave a Comment

A desire to invest in eSports has been growing across the nation for awhile now. With many people stuck at home due to COVID-19 restrictions, that interest has boomed. After all, more and more people are home playing video games. Simultaneously, more people are seeking innovative ways to make money from home. It’s a perfect combustion – and perhaps the perfect time to learn how to invest in eSports.

What is eSports?

Competitive gaming is also called eSports. In other words, people compete at video games. This is a 21st century sporting event. If you haven’t gotten into it yourself, then you might not see the appeal. However, eSports is a growing industry that has really started to boom in the past few years. It’s predicted that the eSports will top $1 billion in 2020 for the first time, a prediction that was made even before COVID-19 caused a surge in online gaming viewership.

eSports and COVID-19

While regular sporting events are suffering during the COVID-19 pandemic, eSports are soaring. These competitive video game tournaments can be done and viewed entirely alone from home. Therefore, they are the perfect form of entertainment in the era of coronavirus.

Twitch is one of the most popular platforms for eSports competitions. It’s a platform that has gained a lot of attention in the past few months. Personally, I’ve seen quite a few performance artists suddenly take to Twitch to share their work. due to COVID-19, more people are discovering this platform. As an extension, more people are discovering eSports.

By the way, Twitch is owned by Amazon. Therefore, as Investing News points out, the you invest in Amazon, you technically invest in eSports. While this isn’t a direct way to invest in eSports, it can certainly be a start for people who are a bit risk averse. If you’re just dipping your toe into this industry, that’s where you can start.

How to Invest in eSports Companies

If you want to invest in eSports, then there are a few big names that you need to know. Many people know the names of the most popular games in eSports. For example, perhaps you have heard of Call of Duty. However, fewer people know the names of the companies behind each game. To invest in eSports, you need to invest in the stocks of the company producing the games. Therefore, you need to learn those names.

Top Companies to Invest in eSports

If you are specifically interested in certain games and the companies that produce those games then you might want to invest directly in their stocks. For example, let’s say that you do love Call of Duty. You might enjoy watching players compete at an elite level. Having some money on the game, in the form of investments rather than betting, could make it even more fun for you. Therefore, you might invest in Activision Blizzard (ATVI), which is the company that makes the game.

Top Gaming Companies in eSports

Here are the top gaming companies that you might be interested in if you want to invest in eSports:

Activision Blizzard (ATVI) not only makes Call of Duty but is also the company behind World of Warcraft, Overwatch, and several other popular games.
Electronic Arts (EA) is particularly known for sports games like Madden and FIFA.
Take-Two Interactive (TTWO) is best known for the NBA 2K games as well as Grand Theft Auto.
Tencent Holdings (TCEH.Y) is known for Fortnite, League of Legends, and Honor of Kings.

Other Top Companies in eSports

If you think that eSports is a growing trend, and you want to invest, but you don’t necessarily care about gaming itself, then you might want to think about the bigger picture. In order for gaming to work, certain things are needed. For example, NVIDIA is known for making the best computer chips for gaming. As more and more people are gaming at competitive levels, NVIDIA’s stock value rises. Therefore, you might want to invest in their stocks. NetEase and Logitech are two other popular companies for such investments.

You can even invest in companies that advertise during eSports games. For example, Ameritrade’s The Ticker Tape mentions that Intel and Coca-Cola are two companies in this arena.

Invest in eSports Through ETFs

If you don’t want to invest directly in the companies but instead want to invest more generally in eSports, then you’ll want to look into ETFs. ETFs specifically related to eSports are a new, but growing, area. The Shadow League names the following ETFs to look into further:

ESPO ETF
GAMR ETF
HERO ETF
NERD ETF by Roundhill Investments
VIDG ETF

The Shadow League points out that ETFs like this allow investors “to tap into the potential of esports and invest not just in the genre, but in the players that have a stake in the entire industry.” In other words, you’re not just investing in a specific game or tournament but rather the entire industry including hardware, product sponsorships, and other tangential aspects that go into the larger arena of eSports.

Should I Invest in eSports?

Now that you know how to invest in eSports, you might ask yourself if it’s the right thing for you to do. If you absolutely love video games and this is something that you can get passionate about then it could definitely be fun for you. However, if you’re looking at it purely from a financial perspective, you need to think about it all very carefully.

The most important thing to realize is that this is a young and growing market. Therefore, there is a lot of potential to make significant money in the years to come. You can get in on the ground floor now. Learn how to invest in eSports. Get savvy at it. Then you might see a windfall.

That said, it’s also a risky market. We don’t know where it’s going. It’s a young market. The players in it could change rapidly. Therefore, if you are risk averse when it comes to investing then you might not want to go this route right now.

How to Invest in Water

June 12, 2020 By Tamila McDonald Leave a Comment

Water is a critical resource. Without it, life as we know it would perish. Along with being a crucial commodity, water can also be an excellent addition to your portfolio. If you are wondering why you should add it to your portfolio and how to invest in water, here’s what you need to know.

Why Water Belongs in Your Portfolio

While it may not seem like water is rare, as it covers about 71 percent of the Earth’s surface, the vast majority (coming in above 96 percent) of that is saltwater. That means, by comparison, very little of the planet’s water is drinkable without desalination, which is an expensive process on a large scale.

Plus, some of the freshwater, about 2 percent, isn’t readily available. Overall, only about 1 percent of the water is potentially ready for human consumption.

By investing in water, you can benefit from the potential scarcity. If water shortages occur, there is the possibility of significant gains. Otherwise, water isn’t likely to become less valuable, barring an unprecedented breakthrough. That means, as a worst-case scenario, water could give your portfolio a degree of stability, which may be ideal for more conservative investors.

How to Invest in Water

If you are trying to figure out how to invest in water, you have a few options. Each one has its own benefits and drawbacks. As a result, you should reflect on your needs, current portfolio mix, financial goals, and risk tolerance before you choose an approach. That way, you can align your investment with your preferences, ensuring you are making the right move for your financial future.

Here is a look at the potential opportunity to invest in water.

Utility Companies

Some water utility companies are listed, allowing you to invest in them directly. American Water Works Co. is one such example, showing up with ticker symbol AWK. Aqua America (WTR) is another such option.

When you use this approach, you are buying stock in a single company. If you already have a diversified portfolio, this could allow you to invest in water while still mitigating your risk. However, if you aren’t diversified, investing in individual companies is the riskier approach, as you are essentially putting a lot of your proverbial eggs in one basket.

As with any investment, you’ll want to research the utility before you move forward. That way, you can make sure you understand its current state, allowing you to determine if it is the right option for you.

Bottled Water Companies

The bottled water market has been growing. By investing in companies that sell bottled water, you can add water to your portfolio, though in a somewhat indirect manner. Additionally, most bottled water sellers also have other beverages under their company umbrella, which may create a form of diversification, at least from the product offering standpoint.

Three of the biggest bottled water producers are the Coca-Cola Company, Nestle Group, and PepsiCo. By investing in one of the larger companies, you are technically investing in water, too.

Water Filtration and Purification Companies

Another somewhat indirect approach is to invest in water filtration companies. Like bottled water, many water filtration brands are owned by larger organizations, most of which are listed. For example, Clorox Co owns Brita. The PUR brand belongs to Helen of Troy Limited, while Everpure is part of the Pentair PLC range of products.

On the purification side, DowDuPont Inc is a big player. Mainly, the company works on nanofiltration and reverse osmosis tech, both of which can make water safer to drink. Another option in this niche is Siemens, which could also be an investment opportunity worth considering.

Water Index Funds and ETFs

There are a variety of index funds and ETFs that focus on water-related stocks. Usually, the fund holds stocks in a group of companies, though some may feature as little as two. Some of the options in this category include:

Bloomberg World Water Index
Dow Jones US Water Index
First Trust Water ETF
Invesco Water Resources ETF
ISE-B&S Water Index
MSCI World Water Index
PowerShares Global Water Portfolio ETF
S&P 1500 Water Utilities Index
S&P Global Water Index

Even though index funds and ETFs come with a degree of diversification automatically, you still want to research the fund’s history. Not all of them are as successful as their counterparts, so it’s worth spending some time to explore its performance before you jump in and invest.

Water Mutual Funds

There are also mutual funds that focus on water. Again, these provide a degree of diversification automatically, though the amount of which varies from one fund to the next. Here are a few potential investment opportunities that fall in this category:

AllainzGI Global Water Fund Class A
Calvert Global Water Fund Class A
Pax Global Environment Markets Fund Institutional Class

Broad Index Funds, Mutual Funds, and ETFs

Some broader index funds, mutual funds, and ETFs also have water-related stocks among their holdings. The difference with these is that they also feature a mix of other companies, potentially across numerous sectors.

The benefit of this approach is a higher degree of automatic diversification. Essentially, you are investing in small pieces of a wide range of companies when you purchase these funds, a move that could reduce your overall level of risk.

However, this also makes choosing an option more complex. Some funds feature dozens of companies, and it can take time to research every stock to see if the fund is right for you.

Additionally, you’ll need to track down a broader index fund, mutual fund, or ETF with a connection to a water-related company. When it comes to bottled water, that may not be a challenge. However, for utilities and other water-related stocks, that could require a bit more time to research.

Making the Water Investment

Once you know which water investments you’d like to make, you’ll need to purchase the right stock, index fund, or ETF. Usually, you’ll do this through a brokerage just as you would with every other stock. Just look up the investment and proceed with the purchase per the usual process.

If you don’t have a brokerage, you may want to explore one of the many online options. Many of them are easy to use and come with companion smartphone apps, allowing you to manage your portfolio from essentially anywhere.

Have you ever invested in water or another critical resource? Tell us about your experience in the comments below.

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How to Buy Disney Stock for Under $100

June 5, 2020 By Tamila McDonald Leave a Comment

While many companies are still operating under the shadow of the coronavirus pandemic, companies like Disney are making a comeback. Since Disney stock took a tumble during the early phases of the pandemic, many investors thought that jumping in now was a wise move. However, if you only have $100 to invest, snagging Disney stock is challenging. Luckily, it isn’t impossible. If you want to buy Disney shares for under $100, here’s what you need to know.

The Current State of Disney

Disney owns Marvel, Star Wars, and a slew of its own properties. Plus, the launch of Disney+ gave the company some protection, even as it was forced to shutter its amusement parks for a period.

It’s no secret that closing the parks hurt Disney. A major source of cash essentially evaporated overnight. Plus, the company had to shell out money to secure the properties while they remained vacant, essentially turning some of the “happiest places on Earth” into money pits.

Now, Disney is moving forward with a reopening plan, signaling possible improvements in its financial future. While it may be slow going, especially when factors like social distancing remain in play, fans of the park will likely return. Additionally, loosening restrictions as states reopen could allow movie and television production to move forward, as well as returns to movie theaters, all of which can help secure Disney more revenue.

Disney Stock Buying Options

During the pandemic, Disney’s stock did fall below the $100 mark. However, it did rebound and ultimately crossed the three-figure threshold again. As of May 28, a share in Disney was running near $116, for example. Since the company is continuing to make forward progress, there’s a decent chance that a sub-$100 price won’t happen again unless something significantly changes.

However, that doesn’t mean a person can’t own a piece of Disney for less than $100. Here are some options that may work.

Fractional Shares

Through an online brokerage like Robinhood or Betterment, you may have the ability to buy fractional shares in Disney. With fractional shares, you can buy less than one full share of an eligible stock.

For example, if Disney’s current stock price is $120, but you could only afford to invest $60, fractional shares would let you get half of a share of Disney stock.

When you purchase fractional shares, you don’t necessarily have purchase halves, thirds, or quarters of a stock. Instead, you buy a fragment of the stock based on the amount of money you can invest. As a result, this approach is incredibly flexible, allowing you to get pieces of companies with higher stock prices immediately instead of having to save up and buy a full share.

Monthly Commitment

If you are open to buying Disney stock directly from the company, you can get started for less than $100. Disney partnered with Computershare to make it possible. And, with a monthly commitment of at least $50 a month, you can purchase a piece of Disney without having to spend $100 all at once.

Now, for this option to work, you do have to make at least four consecutive $50+ investments. Otherwise, the price of entry is $200 upfront. But, it is a way to invest in Disney if you can’t spare $100 in a single month, making it a sound option for new investors who are starting slowly or anyone who doesn’t have a lot of money to spare at a time.

ETFs and Indexes Featuring Disney

Many ETF index funds have Disney among their holdings. For example, the Motley Fool 100 Index has the Walt Disney Company among its holdings (as of May 28, 2020), and so does the Vanguard S&P 500 ETF. While the latter costs more than $100 a share, the former doesn’t. In fact, you could get around three to four shares of the Motley Fool 100 Index fund for under $100, depending on the price at the time of the investment.

There are hundreds of other funds that carry Disney as part of their holdings. By investing in one of those, you are investing in Disney, albeit in a roundabout way. By focusing on lower-cost funds, you can get a piece of the mouse for less than $100.

Wait for a Price Drop

While it doesn’t seem likely, it’s always possible that Disney stock could fall below $100 again. During the early weeks of the pandemic, when state closures were relatively new, Disney stock did drop under $100, even hitting near the $85 mark at one point.

However, since states are reopening and moving toward recovery, the pandemic probably won’t cause another decrease of that level. That means counting on a price drop likely isn’t the best approach, as there’s a reasonable chance it won’t happen again unless another crisis negatively impacts the company.

Is Now a Good Time to Invest in Disney?

Right now, many analysts consider Disney a “buy.” There’s a decent chance the stocks price will continue to rise, just as it has been over the past couple of weeks. Whether it will fully rebound to pre-COVID levels isn’t clear, but the potential is there.

Just keep in mind that investing always comes with risk. While most analysts believe Disney will recover from the recent downturn, that is never guaranteed. Consider whether you are comfortable with the level of risk before investing and do some research. Then take action accordingly. That way, you are well-informed and doing what seems right to you, which is usually the best approach when deciding whether or not to invest your money into any company.

Do you own Disney stock? Were you able to snag it for under $100? Share your thoughts in the comments below.

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