Investors' Playbook

📖Today’s Agenda

• Stock Market : US Bond Market Collapse ranks among the Worst Market Crashes in History

• Entrepreneurship : TOP 3 AI TOOLS OF THE WEEK

• Personal Finance : Net Worth: What Is It, and Does It Matter?

📈Stock Market

US Bond Market Collapse ranks among the Worst Market Crashes in History

The bond-market sell-off that's sending yields soaring is starting to eclipse some of the most extreme market meltdowns of past eras.

• Since March 2020, Treasury bonds with maturities of 10 years or more have plummeted 46%, Bloomberg says.

• That's just under losses seen in the stock market when the dot-com bubble burst.

• The bond rout is worse than the one seen in 1981 when the 10-year yield neared 16%.

Bloomberg reported losses on Treasury bond with maturities of 10 years or more had notched 46% since March 2020, while the 30-year bond had plunged 53%.

Those losses are nearly in line with stock-market losses seen during the worst crashes of recent history — when equities slumped 49% after the dot-com bubble burst and 57% in the aftermath of 2008.

Compared with previous bond-market meltdowns, long-term Treasurys are seeing one of the most extreme undoings in history. The losses are over twice as big as those seen in 1981 when 10-year yields neared 16%.

That crash came as the former Federal Reserve chair Paul Volcker grappled with historic inflation and pushed the federal funds rate to just under 20%.

While interest rates remain well below that level today, the central bank's aggressive turn toward monetary tightening in the post-pandemic era has caused a similar bond-market rout. And traders have continued selling amid concerns of rebounding inflation, while a deluge of Treasury issuance this year has also pressured bond prices.

Long-duration yields have climbed to their highest since 2007 as a result, with the 30-year note passing the 5% barrier for the first time in decades. Investors expect a similar path for the 10-year, which is hovering at just more than 4.7%. Well-known investors, including Bill Ackman, Ray Dalio, and Bill Gross see the 10-year hitting 5% in the near term.

🎯Entrepreneurship

TOP 3 AI TOOLS OF THE WEEK

1. Voicely

TEXT TO AUDIO

Voicely is a powerful web-based software application designed to transform text to high-quality audio content using advanced artificial intelligence (AI) technology. It offers more than 300 voices with an array of languages to choose from. Voicely provides a comprehensive set of features for voice acting, transforming speech to text, and much more.

2.ChatGPT for Excel

AI API

ChatGPT for Excel is an ultimate AI-powered add-in for Microsoft Excel. It leverages the power of AI to rapidly create text, posts, get insights, analyse data, and easily translate content into multiple languages – streamlining the Excel experience and giving you the upper hand.

3. NicheBot

TEXT TO TEXT / MARKETING UTILITY

NicheBot is an innovative market business idea generator designed to provide entrepreneurs, solopreneurs, and indie makers with the insights to help them find their next winning niche.NicheBot's powerful technology can give you the upper hand in the competitive business environment, allowing you to develop new ideas, research competitors, explore markets, and create a plan to launch a successful business

💸Personal Finance

Net Worth: What Is It, and Does It Matter?

You may have heard the term "net worth" used to describe someone's financial situation, but what exactly does it mean? In a nutshell, net worth takes account of not only the savings and other assets an individual, family, or business has, but also how much money it owes.

Think of it this way. Who is richer? Someone with $1 million in savings and real estate assets or someone with $250,000? You may be inclined to say the millionaire, but there's a lot more to the story. And that's where net worth comes in.

What is net worth?

Net worth is a financial metric representing the difference between an individual's or entity's assets and liabilities. It applies to individuals, families, or businesses and provides insight into their financial health. In the context of individual net worth, the calculation involves tallying various assets and liabilities.

Assets include the balances in checking and savings accounts, investments, and retirement funds. Additionally, the value of significant assets such as owned properties and vehicles (for which professional appraisals are ideal, but estimates suffice) are included. Items of considerable value, like jewelry and fine art, can also be added. For practicality, smaller possessions are often grouped under "home furnishings" with an estimated resale value.

Liabilities encompass debts and obligations, such as mortgage loans, auto loans, personal loans, and credit card debt. Recurring small bills, like monthly utilities, are generally not considered in this calculation.

While the basic concept is clear, there are nuances. For instance, different professionals might interpret the inclusion of certain items differently, leading to slightly varied results in net worth calculations. Nonetheless, this method provides a foundational understanding of one's financial standing.

Calculating your net worth

Let's consider a simplified example. We'll say that you own the following assets, and these are their values:

Checking and savings accounts: $20,000

Brokerage account: $50,000

Retirement accounts: $250,000

Value of your primary home: $500,000

Value of your car: $30,000

Home furnishings: $50,000

Jewelry and collectibles: $20,000

Adding these together, we see that the total value of your assets is $920,000. We'll also say that you have the following debts:

Mortgage: $300,000

Auto loan: $10,000

Credit card balances: $5,000

Home improvement (personal) loan: $30,000

This totals $345,000 in liabilities. To calculate your net worth, you would subtract this number from the total value of your assets, which would give you $575,000.

As mentioned, this is a simplified example. Your assets and liabilities aren't likely to be such round numbers, and there are likely more line items you'll include. But this is the general framework of how you can calculate your own net worth.

Does your net worth matter?

Net worth is perhaps the best numerical representation of how wealthy someone is. Two people with $1 million in the bank can have very different financial situations, and net worth is a way to level the playing field.

To be sure, net worth isn't the only important metric to assess how financially comfortable you are. For example, if you have a $1 million net worth but spend $200,000 per year to maintain your lifestyle, you may not feel as wealthy as someone with a $1 million net worth and who spends just $50,000 on annual expenses.

The bottom line is that net worth can be a smarter way to analyze your financial situation, as opposed to simply considering how much money you have in retirement accounts, how much your home is worth, and the value of other things you own.