Investing

Your New Source for Top Daily Stock Picks

June 9, 2021 By Susan Paige Leave a Comment

Long story short: if you’re not following Money Machine Newsletter’s daily stock ideas, you’re leaving money in the market. [Read more…] about Your New Source for Top Daily Stock Picks

AMC Stock Continues to Fluctuate Thanks to Retail Investors

June 6, 2021 By Luke Williams Leave a Comment

AMC Entertainment Holdings Inc. stock has been the talk of Wall Street lately as it continues to gain value thanks to retail investors across the country. This has been good news for AMC, as the company has been able to sell a large number of shares, recently netting $587 million from a sale.

The company had been close to bankruptcy in the middle of the pandemic, so the recent influx of interest in the stock has helped them recuperate tremendously. AMC is planning to sell even more shares in the future, with the potential to sell up to 25 million in 2022.

In the five days leading up to June 4th, retail investors put $345 million into AMC, which was a massive increase of 328% compared to its monthly average. As the stock price continued to increase, the company warned potential investors that buying the stock could result in losing their entire investment. Following this warning, the stock lost momentum and began to fall in price. However, it may not be long before it rises again thanks to these retail investors.

Retail Investors Fueling Surge

The recent surge of interest in stocks such as AMC can be attributed to the rise of retail investors gathering on social media and committing to a select few stocks. These investors previously made headlines earlier in the year, when they were responsible for pushing the Gamestop Corp. stock prices to vastly high levels. However, the fun these investors are having may not last for much longer.

While these investors have been pumping money into their unanimously chosen stocks for some time now, interest has started to fade as the process is no longer new and exciting. This disinterest will likely result in these stocks becoming far less volatile for potential investors. The possible returns may not be as large, but the chances of investors losing their entire investment thanks to extreme volatility will be much smaller.

Curious Buyers Beware

An investment in AMC Entertainment Holdings Inc. may seem like a good way to make money at the moment, but this investment could potentially come at a high cost. The stock has been very unpredictable as of late, and there is a good chance that any investment could prove to be a misguided one. Many of these retail investors are driven by the desire to “stick it to the man,” so to speak.

They do not invest based on the analysis of the current market, but instead on their desire to cause chaos in the market. Due to this style of investing, it’s hard to anticipate how the stock price will rise and fall. The same goes for other stocks that have been the target of retail investors as of late, including Blackberry and Gamestop Corp.

Many of these stocks seem to be companies that are currently in desperate financial situations; however, there really is no way to know for sure where these investors will go next.

Final Thoughts

The stock market can be an unforgiving wilderness. Situations such as the AMC surge and the Gamestop stock boom can seem like quick ways to make money for potential investors. While this can sometimes hold true, oftentimes investing in these stocks can lead to huge losses. Time will tell if the recent AMC surge is the end of the recent uptick in “meme” stocks or if it is a sign of things to come.

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Weekly Financial Wrap: AMC Stock, Small Business Employees, and Biden’s Tax Plan

June 6, 2021 By Luke Williams Leave a Comment

AMC Collects $587 Million in Sell-Off

AMC Entertainment Holdings Inc. has continued to make headlines after staying in the news all spring. AMC was able to sell off a large number of shares after seeing a surge in price, collecting $587 million on the sale.

Surge Due to Repeated Media Coverage

This surge is the result of this stock becoming the focus of retail investors around the world, especially those on the Reddit Group “Wall Street Bets.” If you plan on purchasing any AMC shares, be warned that it is highly volatile.

SA will discuss this more on Sunday’s edition.

U.S. Small Businesses Can’t Fill Job Openings

Small businesses across the country are reporting job openings that have yet to be filled. The National Federation of Independent Business reports that in May, 48 percent of small business owners in the United States have unfulfilled job openings.

This number is an increase from April, which saw 44 percent of small businesses report having unfulfilled openings. As a result, many small business owners have begun offering higher wages in an effort to attract new workers. If you are looking for full-time or even temporary employment, now is a great time to find a job at a small business close to you.

Coal Faces Global Spike in Demand, Leading to Higher Prices

While coal is seen as an environmentally damaging resource, its demand is starting to see global increases. Many prominent coal miners across the globe are currently dealing with production issues — further fueling the renewed demand the resource has received.

Safety-Related Setbacks

Unsafe work practices resulting in deadly mining accidents in Beijing have contributed to lower coal output and a spike in demand. The wise move would be to observe the surge and see how it is predicted to last before making any investments. “This is a bad spike to invest into. Mid-term fundamentals are still bearish,” James Stevenson, lead researcher for coal, metals, and mining at IHS Markit Ltd. in Houston, said.

President Biden’s New 15 Percent Minimum Tax Proposal Is a Step in the Right Direction

President Joe Biden recently announced his decision to go back on his proposed plan to enforce a 28 percent corporate tax hike. He will now look to set a minimum tax rate at 15 percent for companies.

The move comes as a result of Biden looking to compromise with the Republican party in an effort to move his infrastructure and tax plan through Congress. Investors across the country have praised the move, saying that it will help boost the market.

The originally proposed 28 percent corporate tax hike would be harmful to the market as it would cut the profits of companies across the country.

Unvaccinated Workers Plan to Take Employers to Court

While many Americans across the country have been vaccinated, those who have not are facing problems at work. As more media outlets report on workplaces letting go of their employees who refuse to take the vaccine, fired employees have threatened to sue their former employers.

The said employees have stated that they have no way of knowing if the vaccine is truly safe. They say that their employer has no legal right to fire them due to their resistance to the vaccine.

Opposers of the Lawsuit

Those critical of the lawsuit say that employees who refuse to receive the vaccine are foolishly endangering those around them. Time will tell which party is legally in the right.

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Should Robinhood Mirror Coinbase for Maximum Profits?

June 3, 2021 By Kathryn Vercillo Leave a Comment

Robinhood and Coinbase are two of the big names in cryptocurrency trading. In particular, these are the companies that crypto-trading newbies often find first. There are pros and cons to each. However, one of the biggest benefits of Coinbase in comparison to Robinhood is that it offers a wallet that allows for easy withdrawal of funds. Should Robinhood mirror Coinbase for maximum profits moving forward?

What Is Robinhood?

Robinhood is a “commission-free stock trading and investing app.” The app is popular among new investors interested in learning about stock trading for the first time. In particular, it appeals to people who want a quick-and-easy mobile solution to investing. Robinhood, as you can tell, emphasizes stock trading. However, you can also trade cryptocurrency through the Robinhood app.

What Is Coinbase?

Coinbase is “the easiest place to buy and sell cryptocurrency.” This is a mobile app solution for people who are interested in trading cryptocurrency. Coinbase launched in 2012. Initially, it was a Bitcoin trading app. However, today you can trade numerous forms of cryptocurrency through this app. Additionally, you can learn about different cryptocurrencies through their news sections.

Robinhood Vs. Coinbase

The primary difference between Robinhood and Coinbase is their emphasis. Robinhood emphasizes stock trading, although it offers cryptocurrency trading as well. Coinbase emphasizes, and in fact focuses entirely on, cryptocurrency. Therefore, if you’re interested in both stocks and crypto, then you might feel drawn to Robinhood. In contrast, if you want to learn about cryptocurrency and maximize investing there then you’d likely choose Coinbase. Since Robinhood does have that stocks edge, should Robinhood mirror Coinbase in terms of cryptocurrency then it might eventually be the better options.

Other Major Differences: Pros and Cons

Here are some of the other major differences between Robinhood and Coinbase:

Robinhood has a very limited number of cryptocurrencies. In contrast, Coinbase has dozens.
Furthermore, Coinbase allows you to trade your cryptocurrency. You can buy, sell, send, receive, and exchange money easily through the app. Additionally, you can easily transfer your funds to multiple accounts. In contrast, Robinhood only allows you to purchase altcoins, which you then must sell to cash out to an external account. Transaction options are minimal.
Coinbase has a lot of opportunities to help you learn more about cryptocurrency. In fact, you can earn cryptocurrency by watching videos on the platform to learn. Robinhood also has some learning tools. In fact, this is one of the ways that Robinhood mirrors Coinbase today. However, you’ll learn more about stocks than cryptocurrency.
Robinhood charges no commission fees. In contrast, Coinbase has arguably high fees.
Coinbase is a more global app. It supports use from people in over 100 countries. Robinhood, on the other hand, is for people in the United States.
If you’re interested in investing in gold then you can do so through Robinhood. Unfortunately, you can’t do that through Coinbase.

Should Robinhood Mirror Coinbase for Maximum Profits?

As you can see, there are similarities and differences between Robinhood and Coinbase. Both are digital apps that allow you to learn about and trade cryptocurrency. However, Robinhood has fewer cryptocurrency options whereas Coinbase is a leader in crypto trading for newbies and more advanced traders alike. On the other hand, Robinhood offers the opportunity to trade stocks and invest in gold.

Should Robinhood mirror Coinbase to maximize profits moving forward? If Robinhood were to keep, or even expand upon, their own strengths (stocks, particularly) as well as adopting Coinbase’s strengths in cryptocurrency, then it could certainly make it a forerunner in the market again. After all, Robinhood offers commission-free trading. Therefore, they could easily compete with Coinbase in terms of people interested in cryptocurrency trading if they offer both more cryptocurrencies and easier trading/selling within the app.

But, Is It That Simple?

It sounds fairly simple, of course. If Robinhood can compete with Coinbase in cryptocurrency while retaining its strong base in stock trading, then the company should profit. However, business is never quite that simple. What would it take in terms of investment and technology in order for Robinhood to make those changes? Would they truly be able to compete with Coinbase in terms of cryptocurrency? Or, instead, would they end up losing their edge in their own strengths while failing to take over the cryptotrading market?

One of the things that any company should keep in mind is that they’re on their own path. It’s all too easy to give in to the pressure to make everyone happy. When you see your competitors doing well in a specific area, of course you want to press forward in that same area. However, if that’s not your true strength, then it rarely works out. Whether or not Robinhood makes changes that make it more similar to Coinbase really depends on the company’s own values, mission, and plans for the future. It’s not a simple decision.

I’m New to Cryptocurrency, Should I Try Robinhood or Coinbase?

As of right now, there are similarities and differences to Robinhood and Coinbase. Should Robinhood mirror Coinbase in the future then it may be tougher to choose between the two. But as it stands, a newbie investor can easily consider a few key factors to choose between one or the other:

If you really want to learn about cryptocurrency, then you should choose Coinbase.
Moreover, if you want to have the most options available to you in terms of cryptocurrencies, then you should choose Coinbase.
However, if you’re just dipping a toe in the water and only plan to invest in major cryptocurrencies such as Bitcoin and Ethereum, then you might want to consider using Robinhood. After all, it’s commission-free.
Furthermore, if you want to combine stock trading and gold investing with cryptocurrency investments then you should choose Robinhood.

Of course, you could always download both apps. Then you could invest a little in each to see which one feels right for you.

What is your opinion? Should Robinhood mirror Coinbase for maximum profits?

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Companies That Offer Free Stock

June 3, 2021 By James Hendrickson Leave a Comment

Are you looking for a chance at a free stock or two? If so, you are in the right place. Silicon Valley has revolutionized investing, making it possible for the everyday individual to trade like an online Wolf of Wall Street. While the idea of digital investing platforms is still catching on, many of these firms are offering free stocks in exchange for member sign-ups or refer-a-friend promotions.

Why Are Companies Offering Free Stocks?

For starters, there is no such thing as a “free stock.” These companies are offering you a trade. They want to build an investor base and are willing to pay you for it. So, you exchange your willingness to do business for the firm’s free stock incentive and access to capital markets.

How To Approach This Article

Good quality companies tend to increase in value, especially if you reinvest in dividends. Our recommendation is to sign up for ALL of these companies, get the free stocks, and let the value compound. They’ll be worth significantly more in the future.

Another consideration is how a free stock is a great way to branch out without assuming any risk. Taking advantage of these opportunities means learning about different companies and industries that you might never have on your own.

Robinhood

Robinhood is an investing app popular among active traders because it allows them to make equity and options trades for free. The app doesn’t charge a maintenance fee or require a minimum investment, making it a low-cost way to start investing.

Robinhood will give one free stock when a user signs up and links a bank account as a bonus. It’s likely the stock on offer will be worth between $4 and $10. Most of the shares given away are in companies that are not performing, such as Limelight Networks or Ayro, Inc. Things change quickly, so don’t discount your little starter stock.

Robinhood’s reputation took a hit during the recent Gamestop craze after small investors rallied together across online forums such as Facebook and Reddit to drive up the price of Gamestop. The move caused hedge funds planning on short-selling the stock to incur huge losses — a situation known as a “short squeeze.”

About two days after this occurred, Robinhood stopped trading in Gamestop. It’s unclear why, but the firm may be trying to salvage its relationships with the hedge funds involved in the Gamestop debacle. So, while its model relies on small investors, the company may have competing priorities.

On the other hand, Robinhood has lightning-fast transfers and trade execution. If you did spot an opportunity and wanted in on it right away, Robinhood is best of breed.

Firstrade

Firstrade is another discount broker that allows you to trade stocks, ETFs, mutual funds, and options for free. It also offers complimentary trade ideas and access to research by trusted firms such as Morningstar and Briefing.com at no cost.

Firstrade is a privately held New York-based brokerage firm. Founded by John Liu in 1985, it was initially started to serve the needs of the Chinese American community in Queens, New York. Since Firstrade is privately held, it maintains a lower profile than some of its competition. It’s rated well for account set-up, research capability, and trade execution. However, the firm’s customer service leaves something to be desired.

On another front, Firstrade has had several run-ins with FINRA. Regulators took a dim view of the fintech’s lack of internal controls, leading to potential stock price manipulation. Despite the intrigue of insider machinations, FINRA’s investigation found that the failure was due to technical limitations in Firstrade’s internal reporting. The firm has since upgraded its computing resources and control systems.

Firstrade is following a similar model as Robinhood. It wants to expand its investor base by offering free stocks for sign-ups. What’s nice about it is giving you a free share for signing up custodial and joint accounts. If you have children, this will help them get started investing.

Dough

Dough LLC claims that it is what investing should be — unlimited commission-free stock trading, zero account minimums, and an easy-to-use mobile app filled with smart ideas. The platform is a compelling combination of a trading platform and a media company.

Founded in 2018, the company is the brainchild of TD Ameritrade Alumni Tom Sosnoff. The main idea behind this company is to build a stock/options trading platform and marry it with Tastytrade, a financial-focused media network. What makes it different from the others on this list is the multimedia in its app — it offers a wide variety of videos and commentary.

Dough is for smartphones only, and users can download the trading app on iPhone or Android phones. You’ll be asked some basic brokerage questions such as your name, address, Social Security number, net worth, and market knowledge for sign-up. Accounts approval occurs in three days or less. Your free stock comes a few days after that.

The quality of the stock you get for a free sign-up is somewhat better than Robinhood. I picked up shares of a utility and a European bank. Both are worth about $10 and have good long-term potential.

Its FINRA profile is clean and doesn’t have any regulatory issues.

Public

Public fashions itself as an investing social network. Originally named Matador, the firm was the brainchild of entrepreneurs Matt Kennedy and Jannick Malling. The platform takes a slightly different approach by offering members fractional shares from top-flight companies and popular ETFs. The site also boasts a community space for members to support each other, trade ideas, and learn more about the stock market.

Public’s sign-up is pretty straightforward. You download the app and answer a bunch of standard questions. As part of the sign-up process, you are required to link your bank account and move some money into its brokerage platform.

You’ll also get to select which company you want to have a chunk of — there are about ten options to look over. The good news is all the options are good. It will likely give you about $10 bucks worth of the company — a fractional share.

Public also has a clean regulatory bill of health.

Honorable Mention #1: Coinbase

Coinbase is a popular cryptocurrency exchange in the United States. It’s a one-stop-shop for all your digital currency needs, and trading is as easy as one, two, *fee*. It’s true, this platform does cost something to use. However, a wallet app option enables you to securely store your holdings and shop at stores that accept crypto.

The way to maximize the value here is by signing up, collecting your $5 in bitcoin, and fulfilling the conditions of the promotional offer. There are a few things that make Coinbase’s rewards program attractive to customers. First, it’s a nice chunk of crypto-change at about $20 to $30. Second, it’s an introduction to the world of cryptocurrency.

Crypto is fun because it’s like the wild west of investing. You can trade 24/7 and is not subject to the same regulations as the stock market. Some of the concepts such as tokenization, blockchains, and distributed computing are amazingly energetic and fresh.

Digital currency is mysterious to many and prone to dramatic highs and lows. It may strike fear into the heart of the uninitiated investor, but there is potential for a savvy individual willing to bet low and learn as they go.

The companies featured in Coinbase rewards are often already part of its portfolio via the firm’s investment arm. But the platform is not offering rewards out of the goodness of its investing heart; it’s about building up demand and marketing awareness for its crypto-ventures. As with anything, caveat emptor.

Honorable Mention #2: Webull

Webull

Webull is an investing app that allows you to trade stocks, ETFs, and options for free. Users can even buy and sell cryptocurrencies on the platform, making it an excellent choice for traders who want to dabble in alternative investments. Despite the impressive array of investing options, the app has a few service gaps due to a lack of mutual fund or fractional share offerings.

If you’re interested in signing up for Webull, you can get one free stock worth anywhere from $2.50 to $250 when you open an account. You can also earn a second stock worth up to $1,600 when you fund your account with at least $100. Realistically, you’ll get shares worth between $3 and $15.

You’ll also get two stocks for your first successful referral and six stocks when your second friend signs up. For every referral you make after that, you’ll get an additional two free stocks.

Webull makes the honorable mention list because it has recently tightened up its offer. It is asking for a deposit of $100 before you get your two shares of stock. It used to issue shares for signing up, but our guess is its market position has improved, so it is less aggressive about courting users. Now the offer is, you sign up, and you get a single free share of stock. Then you have to deposit $100 to get your second share. It might be worth your time.

On the downside, Webull’s desktop interface isn’t amazing, and its customer service sometimes leaves much to be desired.

Sign up for all of these

All of these options allow you to get friends to sign up. Usually, the offer is if you get a friend to sign up, you’ll get another share of stock, and your friend will get one too. If you have a spouse or partner who is interested in personal finance, this is generally a good way to double the value proposition.

Do you know any additional sites where you can get free stocks? If so, please let us know in the comments below.

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Here’s Why You Should You Take Investment Advice from WSB

May 31, 2021 By Jenny Smedra Leave a Comment

The subreddit known as r/wallstreetbets has been consistently making headlines this year. Although it has been around for nearly a decade, it gained national prominence during the GameStop short squeeze and has continued to intrigue investors ever since. They employ high-risk strategies that many brokers and investors would never dream of. However, many of its community members have made impressive gains that leave many of us asking ourselves if we should be taking investment advice from WSB.

What is WSB?

For those who are unfamiliar with r/wallstreetbets, it’s a strange place…to say the least. If you scroll through its most popular posts, you will see members sharing their astronomical gains, crushing losses, and investment advice from WSB that goes against conventional wisdom. That’s because this subreddit is not your typical investing forum. It’s a place where amateur and veteran investors alike can discuss ultra high-risk strategies. They ignore the most fundamental rules of investing and make moves that even the most hardened investors cringe at because…YOLO! While some view it as little more than high-stakes gambling, others are taking signals from the community posts and making huge gains from risky investments.

From its inception, WSB has been a place for people to discuss high-risk trades and seemingly crazy investment strategies without judgment or lectures. That is, of course, unless they are referring to themselves. The self-deprecating and sometimes profane tone of the forum has become an important part of the community’s culture. Even though some despise its irreverence and lack of respect for the traditional rules of trading, no one can deny that WSB has played a significant role in recent stock trends.

What Are WSB’s Investment Strategies?

Instead of choosing well-known assets, WSB members throw caution and money to the wind to make risky trades or buy more volatile stocks. If you are new to the forum, don’t even waste your breath discussing the merits of bonds or risk mitigation. Community members know how insane their approach is, and they revel in the madness of it all. And while it may have begun as an obscure trading forum, WSB has grown into a virtual army with its own subculture and jargon. Its numbers swelled after the short squeeze on GameStop stock in January 2021 and made it wildly popular. The entire phenomenon put the subreddit in the national spotlight, and some investors starting taking their investment advice from WSB.

Unfortunately, many members of the subreddit acted on buy and sell signals too late and lost tons of money. I’m not just talking about the money set aside for investing. Some lost their entire life savings and mortgages in a matter of hours. The r/wallstreetbets forum is many things. The one thing all financial advisors can agree on is that the subreddit is not a reliable source for investment advice.

Yet, every day members share their gains and post the impressive returns they have earned from their risky strategies. Countless community members made thousands, even millions, during the GameStop short squeeze. In fact, one subredditor joined the billionaire club when it was all said and done. It’s hard to ignore posts from members barely in the 20s who could retire off their “tendies” while the rest of us slave away at our jobs and stick with tried-and-true investing strategies.

What Do Brokers Think of Taking Investment Advice from WSB?

Any financial advisor worth their salt should tell you not to trust the investment advice you read online. This goes double when it comes from an online forum of novice investors with a penchant for high-risk investments. When I asked my broker his opinion of their investment strategies, he compared it to trusting social media or tabloids for your news sources. And he’s not wrong. Most of the time, advice from WSB involves more gambling than strategy.

But…Here’s Why You Should Take Advice from WSB

Although their strategies are unorthodox and extremely high-risk, there may be a method in the madness. A recent study conducted by two researchers from the Hasso Plattner Institute in Potsdam attempted to unravel the secret behind the success stories. Although some members have had staggering losses, particularly after the GameStop frenzy, the team may have uncovered a way to decipher when you should take investment advice from WSB and when you should ignore it.

In order to determine just how reliable WSB’s advice was, the German researchers created a portfolio based on the community’s most popular stocks and buy/sell advice from its members. And what they found was rather astounding. With the 20 stocks chosen from the subreddit’s posts and discussion boards, the WSB portfolio outperformed the S&P500. In fact, it grew 200% over the last three years and a shocking 480% in the past year alone.

The crux of the matter comes down to an investor’s ability to determine reactive signals from proactive ones. The reactive signals come immediately after a significant price hike or drop. Acting on these signals is how many of the subreddit’s “degenerates” lost so much money. However, the proactive signals turned out to be quite profitable. Therefore, if you know what buy/sell signals to look for, then you could make a killing.

The Fine Print

Although the results were promising, it all remains theoretical since the forum is still in its infancy. The convenience of technology has shown average Joes how easy it is to start investing with individual investing apps meaning more people will likely adopt their strategies. However, you cannot overlook the YOLO approach the WSB community has towards investments. Novice investors often overlook this and only see the community as a way to get-rich-quick. Unfortunately, many do not realize this until it’s too late and they’ve lost everything. If you aren’t prepared to lose it all, then steer clear of investment advice from WSB.

However, if you are looking to make some questionable choices with large sums of money, then you’ve come to the right place. Win, lose, or draw, WSB will always support high-risk moves.

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