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How Savvy Investors Are Reducing Portfolio Expenses

April 8, 2020 By Susan Paige Leave a Comment

Modern investors are constantly looking for the best ways to reduce expenses on their portfolios. Investment portfolios incur fees for a number of reasons. Traditionally, portfolio fees were viewed as a necessary cost for investing. However, many modern social trading platforms offer low or zero-fee investment options. When properly practiced, these options can substantially reduce your fees and maximize your overall returns. The quicker you begin practicing expense minimization strategies, the sooner you can begin collecting larger returns. If you are interested in how to optimize your portfolio and reduce fees, read on to learn about how other investors are reducing portfolio expenses.

Be Aware Of Fund Expenses

In order to reduce investment expenses across your portfolio, ensure you are aware of all the fees your portfolio incurs. The funds you purchase and companies you buy stock in greatly impact the fees you will have to pay. Many traders frequently pay so much in fees simply because they are unaware of their portfolio expenses. Before selecting any investment, it is essential to adequately research all the fees it requires. Many funds incur a sales load or commission if they are purchased through a broker.

This can either be in the form of a front-end or back-end load. Some funds additionally require surrender fees if shares are sold prior to a specified date. Furthermore, depending on the platform you choose, you may even have to pay a transaction fee. In some cases, these fees can be as high as $20 to $50 whenever an investment is traded.

Invest On Social Trading Platforms

Social Trading platforms are an excellent way for investors to reduce portfolio expenses. Social platforms offer a diverse array of investment tools to help traders reduce expenses and maximize returns. Most platforms offer a series of investment strategies that model the methodology of experienced investors. At the same time, they link traders with a social profile consisting of news feed, market stats, investor portfolios, and charts for investment yields.

These features help traders like yourself consistently monitor the stability of your investments and reduce management fees. Some of the best social trading platforms even offer stocks without broker commissions, administration, management, or ticketing fees. For investors looking to expand and diversify their financial portfolio while simultaneously reducing expenses, consider trading on social platforms.

Hire A Financial Advisor

Consider hiring a financial advisor in order to reduce your overall portfolio expenses. Financial advice fees are a major component of your total portfolio expenses. Some advisors charge upwards of 1% for portfolio management and financial advice. However, in many cases, investment advisors only offer reasonable fees to significantly larger investment portfolios.

In order to reduce expenses, consider finding an advisor that does not operate on a percentage-based scale. Many certified financial planners charge reasonable hourly or flat fees for their services. With this, you can only request financial services when you are in need of assistance. Otherwise, you are being charged an annual retainer for potentially infrequent advice.

Take Advantage Of Automated Technology

Take advantage of reliable, automated tools in order to reduce your overall portfolio expenses. Some of the largest expenses your portfolio incurs are that of management, financial advice, and account maintenance fees. Historically, these fees were accepted as part of trading securities. However, modern platforms offer automated tools that can assist in these responsibilities.

Automated technology deploys a number of robo-investing and robo-advisory tools to secure your investments. These systems offer computer-driven services to manage your portfolio, ensure investment stability, and recommend profitable instruments. Compared to traditional brokers, the fees required by automated tools are considerably lower, allowing you to expand your portfolio while simultaneously reducing expenses.

Consider Different Investment Types

In order to reduce your portfolio expenses, consider the different investment types. Each financial instrument has a unique set of fees, management expenses, and tax requirements. Be sure to research the best financial securities for your capital investment. Options like stock trading, online investing, or crypto-trading have fees completely different than other financial instruments. In order to balance taxes and management expenses, consider indexed-funds like ETFs or mutual funds.

If you are unsure about which investment types to select, consider social trading platforms. These platforms act as a one-stop shop for various investment types and financial tools. Consider selecting various investment types in order to reduce your overall investment portfolio expenses.

There are several ways for modern traders to reduce their overall portfolio expenses. The first step in reducing your portfolio fees is to remain aware of your fund expenses. Consider investing on social trading platform to reduce your total fees considerably. Take advantage of automated technology for your investing whenever possible. In addition, consider selecting different types of financial securities for your portfolio. Furthermore, consider hiring an hourly or flat-feed financial advisor. Consider the points above to learn about the essential ways for investors to reduce portfolio expenses.

For more great Savingadvice articles on investing, consider these:

What You Need to Know About FANG Stocks

Great Marijuana Stocks To Invest In Now

Is It Too Late To Invest In Cannabis?

How to Choose the Stocks to Buy Right Now

February 3, 2019 By Susan Paige Leave a Comment

So you’ve decided to invest in stocks and have mastered the fundamentals of investing. The big question now is how do you choose the stocks to invest in?

Figuring out which stock to invest in can be challenging, especially if it’s your first time. With tens of thousands of stocks in the market, narrowing down to a few stocks can be overwhelming. However, with the right tools and information, you can confidently pick stocks. Remember that when you buy a stock, you become a part owner of that company hence the value of your stock will largely depend on the health of the business.

Consider Your Investment Goals

Different people have different investment goals. Some are looking for an income stream while others want to build wealth for a long-term purpose such as retirement or a child’s college fund. Some want to make big gains while others just want to preserve money. Basically, there are two investment strategies – growth and income. Income investors prefer low-priced stocks with a stable growth rate and dividends. Growth investors, on the other hand, buy high-priced stocks with high growth rates and potential. Therefore, choose a stock depending on the purpose of investing. If you’re an income investor, choose dividend stocks as they provide an immediate return on investment and some measure of protection in market downturns.

Invest in Business You Understand

It’s always good to start with an industry or company that you’re familiar with. This will make it easier for you to choose the stock to buy based on the information you already know about the industry. If you know a company’s products or even use them, then you probably have an understanding of how the company works. Companies in the industries where you work are also a good choice. On the other hand, avoid investing in companies you don’t understand.

Consider Price and Valuation

Investment experts often look for stocks that are cheap or undervalued. Underpriced stocks are stocks that are selling at a price significantly less than its intrinsic value, and you can use the Benjamin Graham Formula to find such stocks. Investing in underpriced stocks is a great strategy, especially if you identify the stocks that are moving in the right direction. As you will see in The Intelligent Investor review, Graham argues that investing in such stocks has little downside risk but great potential for upside. However, you must be careful because sometimes a stock is cheap because the business is slowing down. Also, do not be deceived by stock market gyrations; instead, look at the long-term trends of stocks.

Evaluate Financial Health

All public companies release quarterly and annual financial reports. Find the official reports on their websites or the SEC. Look for revenue growth, check the company’s debt, and look at the companies’ profit margin. Stock prices increase when companies are growing and making more money. Compare a company to its competitors to see their profits and size of debts. If a company is paying a dividend, check the history of their payments. Are they increasing or decreasing?

Diversify

It’s very important to diversify your portfolio. Though you want to invest in industries you understand, it’s important to ensure you don’t overload your portfolio with stocks in the same sector. For instance, if you work in IT, don’t overload your portfolio with tech stocks. Industries are subject to ups and downs in the market hence it’s not advisable to invest in one industry.

What are your tips for choosing stocks? Share with us in the comments below!

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Great Marijuana Stocks to Invest in Now

July 31, 2018 By Tamila McDonald Leave a Comment

marijuana stocks, alternative stock investment, marijuana investment

As more states embrace recreational and medicinal marijuana, the once taboo industry is taking the investing world by storm. One estimate suggests the US marijuana industry could reach a value of $25 billion by 2020. With this significant growth potential, marijuana stocks may be of interest to investors.

The legal cannabis sector is already worth $6.7 billion in the US alone. It’s worth another $8 billion in Canada.

However, not every marijuana stock is performing as well as others. If you’re considering taking the leap and investing in marijuana stocks, here are a few worth exploring now.

MariMed (OTC: MRMD)

When it comes to professional management companies serving the cannabis industry, MariMed is a leader. Additionally, the company markets a variety of cannabis products. Their offerings include Nature’s Heritage, Kalm Con, and Betty’s Eddies.

Over the course of 2018, MariMed’s stock soared by over 240 percent. This was largely based on their Q1 earnings report. Revenue hit the $2 million mark, an 81 percent increase year-over-year.

As additional medical marijuana markets open, including in Maryland and Massachusetts, MaeriMed may see significant growth. In Q1, they began operating in Maryland They also have a facility in Massachusetts under construction.

iAnthus Capital Holdings (OTC: ITHUF)

iAnthus Capital Holdings currently operates in four states: Florida, Massachusetts, New York, and Vermont. They have 46 dispensaries and eight cultivate facilities. They are also forming strategic partnerships with businesses in Colorado and New Mexico.

This year, iAnthus shares rose by 150 percent. After acquiring GrowHealthy Holdings in January, their stock prices surged. The primarily surged because they expanded their operations into Florida. In early April, they acquired Pilgrim Rock, which was based in Massachusetts.

The growing Massachusetts market will help iAnthus, but their locations in Florida and New York also leave them well-positioned since the states have only a limited number of licenses.

Canopy Growth Corporation (NYSE: CGC)

A Canadian marijuana stock, Canopy Growth is the largest grower in Canada and, in regards to market cap, the biggest marijuana stock in the world. Year-to-date, Canopy is up 24 percent, even though the price fluctuated until the end of April.

In May, the company became the first marijuana stock on the New York Stock Exchange (NYSE). Now that recreational marijuana has been legalized in Canada, only the second nation to do so, Canopy is likely to see a surge in their stock prices. Recreational sales could begin as early as September, making now a great time to consider investing in the company.

They are also a big player in the global medicinal marijuana market, which could help them achieve additional gains. Further, a deal with Constellation Brands, an alcoholic beverage maker, that could lead to cannabis-infused drinks helps differentiate the company from the pack.

Aphria (OTC: APHQF)

Unlike the other marijuana stocks on the list, Aphria has struggled a bit this year. However, this Canadian company could benefit from the legalization of recreational marijuana in Canada, giving it a chance to experience significant growth.

Additionally, the company has a robust retail distribution network thanks to a deal with Southern Glazer’s. Aphria also targets the global medical marijuana market, which expands the companies reach and objectives, and has a relationship with Liberty Health Sciences, something that could help them penetrate the US market.

Cronos Group Inc. (NASDAQ: CRON)

A medicinal marijuana cultivator based in Toronto, Cronos Group became the first marijuana stock on the NASDAQ. The company serves an international market, including Canada and Germany. They also have a facility under construction in Israel and have a license in Australia through a joint venture.

Though Cronos Group doesn’t have a US presence yet, their revenue is respectable. Additionally, if the American market settles over time, they may venture into the country.

GW Pharmaceuticals (NASDAQ: GWPH)

If you are interested in marijuana stocks but hesitant to pick a company that is based mainly on the plants, GW Pharmaceuticals may be a happy medium. The company has an FDA-approved drug. The drug uses an active ingredient from cannabis, which is the first of its kind.

The medication, Epidiolex, is a treatment for seizures for two forms of epilepsy, Dravet syndrome and Lennox-Gastaut Syndrome.

In the end, it provides an alternative approach for those who may want to invest in a marijuana-style product without the same risks that come with changing regulations.

Scotts Miracle-Gro (NYSE: SMG)

If the idea of directly being involved in cannabis makes you nervous, then investing in Scotts Miracle-Gro might be a better option. It’s considered ancillary to marijuana stocks. The company has made a substantial connection through its hydroponics products. They even went as far as to acquire Sunlight Supply Inc. This purchase gave them a significant foothold in the hydroponics world.

Effectively, investing in Scotts Miracle-Gro gives you the ability to indirectly invest in the cannabis industry. Buy this stock without actually investing in marijuana.

Terra Tech (OTCMKTS: TRTC)

A cannabis-focused agriculture company, Terra Tech features two divisions: Cannabis Dispensary, Cultivation, and Production; and Herbs and Produce Products. The cannabis-oriented segment includes medical marijuana retail locations as well as products for adult use under the Blüm brand. They have a presence in California and Nevada, including a headquarters in Irvine, California.

The Herbs and Produce Products section focuses outside of the cannabis industry, making the company somewhat diverse automatically. This includes produce, floral, and hydroponic herb offerings.

Terra Tech has a market cap of approximately $127.5 million.

22^nd Century Group (NYSE: XXII)

A biotechnology company, 22^nd Century Group creates technology that assists in controlling nicotine levels in tobacco plants and cannabinoid levels in marijuana plants. They also produce multiple cigarette lines and a smoking cessation aid.

The company also collaborates on scientific endeavors with Anandia Laboratories and the University of Virginia, including on the development of hemp strains.

Currently, 22^nd Century Group has a market cap near $316.8 million.

Cannabis Sativa (OTCMKTS: CBDS)

Unlike many marijuana-oriented companies, Cannabis Sativa focuses on the external use of cannabinoids and THC. The company produces a range of skin care products, sold in the US and internationally, including those featuring cannabinoid and THC infusions for pain relief.

The company also produces other products, such as fashion t-shirts and coffee mugs, through wildearthnaturals.com. Additionally, they operate an online informational portal to help patients find information on dispensaries, marijuana strains, and products, as well as a telemedicine platform to connect patients with physicians to access knowledge about medical marijuana.

Are Marijuana Stocks a Safe Bet?

No. Marijuana stocks carry substantial risk non-marijuana stocks do not.

Political & Regulatory Risk. The cannabis industry is often discussed negatively by policymakers. Even though American citizens mostly support legalization. This can create a certain level of volatility. Shifting regulations can help or harm the sector, depending on the intention of the legislation. Comments by Attorney General Jeff Sessions exemplify this.

Source: DOJ, 2018

In addition, much of the banking and regulatory infrastructure required for a mature industry is not in place for marijuana. Since marijuana is illegal in some states, but not others, many banks are unwilling to work with marijuana companies.

Growth & Market Pressure. Additionally, many marijuana companies are relatively small. For example, MariMed’s market cap is around $490 million. iAnthus’ is approximately $340 million. Even Canopy comes in with a market cap of $6 billion. Their 12-months sales only cross over $52 million. This suggests that as a class of investments, they may less able to grow profits n the face of market pressure. This is particularly a problem in the event that an oversupply of marijuana occurs.

Volatility. Furthermore, many marijuana stocks are already trading at high multiples of earnings. This means any future gains may not be as dramatic. Also, fluctuations will likely occur at various points due to higher political risk profiles combined with market fluctuation.

If you are comfortable taking on some level of risk, then marijuana stocks may be right for you. However, if the idea of dramatic fluctuations and shifting regulations give you pause, you may be more comfortable investing elsewhere.

Looking for more great investment articles? Here are a few to get you started:

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How To Invest When It’s Late in the Bull Market Cycle

May 5, 2018 By Troy Bombardia Leave a Comment

Late bull market cycle -- what do you do?

Although the economy is nowhere near a recession today, there could be one soon in the next few years because this economic expansion is already so stretched. That said, here are several ways to invest when it’s late into the bull market cycle.

Remember first that you don’t always have to be fully invested. Many long-term investors believe that Warren Buffett remains invested in stocks throughout a bear market.

Nothing could be further from the truth. Buffett raises cash and shrinks his position sizes when he thinks that valuations are expensive.

Wait to Buy

He does this because he doesn’t see a lot of good investment opportunities during the late stage of a bull market. Buffett invests heavily when he thinks that valuations are cheap and opportunities are plentiful.

Blindly holding onto stocks throughout a recession can lead to your portfolio being underwater for more than half a decade.

So remember: if there are no good investment opportunities, stay in cash. Don’t force yourself to take investment opportunities when there are few good ones available.

Wait a Little Before Buying Long-Term Bonds

Right now we are in a unique situation in which:

A bear market might be two to three years in the future.
A bear market is not imminent either.
The current bull market still has one to two years left.

This means that it’s not a good time to invest in long-term Treasury bonds yet. Interest rates are extremely low right now, and with the Fed on track to hike rates another two times in 2018, interest rates will rise throughout this year. That means bond market investors will probably lose money over the next year.

Investing in long-term bonds will become a good idea when the next bear market begins. Rates don’t usually rise during bear markets because central banks are lowering interest rates, unless there is hyperinflation.

Treasury Inflation Protected Securities

Historically, inflation always rises during the last legs of an economic expansion — and that’s what we’re in right now.

Investing in the stock market to protect yourself from inflation in the short run is not a good idea because it can be very volatile. The simplest way to protect yourself from inflation is to buy Treasury Inflation Protected Securities: Their value rises and falls with inflation, effectively giving you protection from rising inflation.

Dividend Stocks

Some people still feel that they have to invest in stocks. If you are one of those people, at least recognize the danger of a bear market and try to minimize your losses. Investing in dividend stocks is better than investing in growth stocks during a bear market. Here’s why:

Growth stocks s (like Facebook, Amazon, Netflix, and Google) fall faster than average during bear markets.
Growth stock rise faster than average during bull markets.

Dividend stocks are exactly the opposite; they tend to be slow-moving companies with low volatility (for instance, utilities). In a bear market, they typically fall less than the rest of the market.

Plus you also get dividend yield even during the bear market — but keep in mind that dividends tend to get reduced during bear markets.

Prepare for the Next Bear Market

If you own all stocks right now, you might consider moving entirely to cash when you think the next bear market is just around the corner — then either stay entirely in cash or shift to short-term Treasury bonds.

The Fed tends to lower interest rates during bear markets, which means that short-term bondholders may be rewarded.

Troy Bombardia is a professional trader who shares his thoughts on the markets at Bull Markets.

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Why Are Investors Worried About Inflation?

February 23, 2018 By Jackie Cohen Leave a Comment

Over the past month we’ve had a series of economic announcements signaling that inflation is speeding up and the markets have gone down following each of them. Why? These pronouncements suggest inflation is accelerating toward a potentially unhealthy level, where the dollar loses value, and the markets become more turbulent.

Investors Worried About Inflation

Good inflation or bad inflation according to CNBC

This week, the market headed south just on expectations of interest rate language in the Fed’s meeting minutes from January — and then there turned out not to be anything specific about it in the release.

The market also had a down day last week following the release of the consumer price index, which indicated surging inflation both the month of January and the year. it jumped 0.5% last month, surpassing economists’ forecasts for a 0.3% increase.

This news followed a report earlier in the month of another inflation indicator: the largest wage gain in over eight years.

While that is good news for consumers, the markets get skittish, fearing the Fed will raise interest rates.

The fear is there all right: Some estimates say there could be three interest rate hikes by the end of the year, and that expectation is being priced into stock and bond transactions.

They’re Buying the Dip

So far, the downward trading in response to the inflation news has been short lived: Investors have taken advantage of opportunities to buy stocks at lower prices following the dips.

This appears to be the beginning of a pattern in volatility that some analysts say might continue until the end of the year — or at least until the uncertainty is resolved.

In this case, the uncertainty surrounds what the Fed will do in response to the heightened inflation. When will the next interest rate increase occur, and will the economy cool off as a result?

Readers, what concerns do you have about inflation? How are you seeing it play out in your daily finances? When do you think the next interest rate hike should happen?

Should You Invest in Alternative Energy Stocks?

October 12, 2017 By Jacob Sensiba Leave a Comment

In our society, energy plays an enormous role. It powers our cars, homes, and lives. Without energy, we would not be able to charge our devices that never seem to leave our side. Traditionally, our energy has come from fossil fuels such as coal, oil, and natural gas.

In recent history, however, a change has occurred. Because the use of fossil fuels causes carbon emissions which prove to be harmful to the ozone layer, we needed to figure out a better way to create energy. In comes renewable energy. The use of the sun, wind, and water has enabled us to create energy. As time goes on, our technology will improve, and renewable energy will become less expensive, more prevalent, and more efficient. Here are some companies that are helping us do just that.

Best Alternative Energy Stocks

Before I list the following alternative energy stocks and their statistics, let me start by telling you what the statistics are. Market cap refers to the size of the company. It is figure by multiplying the number of outstanding shares to the stock price. The yield is the company’s dividend. It is a percentage of the share price and is paid out throughout the year. And year-to-date performance is how the stock has done since January 1. Here are, in my opinion, stocks that show the most upside for this industry.

Brookfield Energy Partners (BEP) – This company uses wind and water to create energy. They are based in Bermuda, but operate in the United States, Canada, and Brazil. BEP has a market cap of 5.6 billion and yields 5.58% which gives it a sizable dividend. It’s year-to-date performance at time of writing is 15%.
Vestas Wind (VWDRY) – Vestas sells equipment for wind energy. They also service the equipment and the facilities they sell to. They are based out of Denmark and have a market cap of 19 billion. The yield is small compared to other renewable energy companies at .96%, but the performance from the start of the year more than makes up for it at a whopping 50%.
Pattern Energy Group (PEGI) – PEG constructs, owns, and operates facilities used for wind energy. Pattern Energy has a market cap of 2.1 billion and yields an astounding 6.97%. In addition to the high yield, Pattern’s performance year-to-date is 28%.
Covanta Holding Corp. (CVA) – Covanta is one of the more remarkable companies as its main function is to turn waste into energy. The market cap for CVA is 1.9 billion and has a high yield as well, at 6.64%. The performance for Covanta from the beginning of the year is flat.
Atlantica Yield (ABY) – ABY has a diversified portfolio of renewable energy facilities and has a market cap of 2 billion. The yield for Atlantica is not as high as the previous two companies, but still very impressive at, 5.09%. Similar to Covanta, however, ABY has had little performance year-to-date.

ETFs Investing in Energy

The companies listed above are some of the largest in the renewable energy realm. That said, investing in individual companies come with risks. That’s not to say the funds aren’t risky, but most of those investments have numerous companies they invest in. Below are two ETFs that invest in renewable energy companies

Guggenheim Solar (TAN) – This ETF is one of the biggest that participates in renewables with $369 million in Assets Under Management (AUM). The yield for TAN is currently 3.81% and it has a year-to-date performance of 27%.
iShares Global Clean Energy (ICLN) – Another large ETF in this space is this iShares ETF. It is more diversified than the Guggenheim listed above because it invests in more than one type of renewable energy and it invests in more than one geographic location. The current yield for ICLN is 3.16% and its performance for the year is 10%.

Conclusion

There are several renewable energy companies available to invest in. When researching these companies, make sure you are doing your homework. Try and stay away from companies that operate and make acquisitions primarily with debt. That is not a sustainable business model. To find out more information about the companies above and other renewable energy companies, I strongly recommend The Motley Fool. You can also check out Saving Advice’s forums for great investing advice.

All opinions listed are my own and should not be taken as investment advice. Contact a financial professional for personal financial advice.