Investor's Playbook

📖Today’s Agenda

• Stock Market : Microsoft Stock Briefly Tops $2.87T to Dethrone Apple as World’s Most Valuable Company

• Entrepreneurship : TOP 3 AI TOOLS OF THE WEEK

• Personal Finance : Are you ready to buy a home?

📈Stock Market

Microsoft Stock Briefly Tops $2.87T to Dethrone Apple as World’s Most Valuable Company

Shifting valuations shuffled the top two for just a moment before the iPhone maker regained its highly-disputed first spot.

Microsoft stock briefly climbed above $2.87 trillion on Thursday, surpassing Apple to become the world’s biggest company by market value. The neck-to-neck rally for the number one spot now looks to hinge on who can come up with the better set of AI tools and use cases.

The “I’m on top of the world” feeling didn’t last long for the software creator. By mid-session yesterday, Apple had already recouped its losses and was on its way to cross $2.9 trillion while Microsoft had fallen under the $2.85 trillion mark. The close rivalry continues.

Apple has been at the helm of valuations for more than 500 days. Microsoft briefly rallied ahead of the iPhone maker in 2020 and 2021 thanks to remote work and high demand for cloud computing. Now, the company led by Satya Nadella is fashionable for being a large backer of OpenAI and its AI product ChatGPT.

S&P 500 Ticks Lower After Hot Inflation Print Dampens Hopes of Early Rate Cuts

December’s headline inflation rose at a faster-than-expected pace of 3.4%, potentially putting the Federal Reserve back into fight mode.

The S&P 500 (SPX) drifted lower by a modest 4-point slide, or 0.1%, on Thursday after the latest inflation print showed there’s still work to be done by the Federal Reserve. As the central bank was putting its gloves back to fight price pressures, investors folded their stock bets, sulking over dampened hopes of early rate cuts.

Consumer prices for December climbed 3.4%, outpacing the 3.2% estimate by analysts and topping November’s 3.1% increase. The data suggested that Fed officials might take their time and wait for more data before dialing back interest rates. Policymakers meet for the first time this year on January 30-31.

At their last meeting for 2023, they skipped an interest rate hike and opened the door to three rate cuts this year. Markets then went frolic and started calling for six trims to borrowing costs, expecting rates to move all the way down to around 4% from the current 22-year high of 5.25% to 5.50%.

🎯Entrepreneurship

TOP 3 AI TOOLS OF THE WEEK

1. Personetics

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Leverage the limitless potential of AI with Personetics, a robust financial tool designed to enhance engagement and propel business advancement through data-driven personalization. Personetics is a highly intuitive and advanced platform that reshapes the approach to personal finance management (PFM) and money management solutions. With a significant emphasis on improving customers' financial wellbeing, it harnesses the power of AI to generate meaningful financial insights, thereby fostering a seamless user experience.

2.Supercreator.ai

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Supercreator.ai is not just an AI tool but is representative of a paradigm shift in content creation, particularly for social media. The AI-powered tool makes video content creation an easy and rapid endeavor. Imagine being able to create stunning promotional videos for your latest product line or crafting engaging social media posts that revolve around video content, without the need for specialized knowledge or countless hours of labor. The tool also proves advantageous for website analysis, assisting you to gain a comprehensive understanding of your site's performance, enabling you to make data-backed decisions to enhance it.

3. Black Ore

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Introducing Black Ore, the world's first AI Tax Preparation Platform for CPAs. This innovative platform harnesses the power of artificial intelligence and machine learning to bring a new level of efficiency and accuracy to your tax duties. Say goodbye to routine data processing and paperwork. With Black Ore, a team of U.S. based CPAs with Big 4 experience is just a click away, ready to provide preliminary reviews.

💸Personal Finance

Are you ready to buy a home?

Real estate is an American obsession — just look at the number of TV shows, Pinterest boards and websites dedicated to finding, renovating and decorating the perfect home. As a signifier of "the American dream," homeownership still looms large. And although a lot has changed of late, the desire to own a home — and to belong to a neighborhood — has stayed strong. In fact, according to Bank of America's 2022 Homebuyer Insights report, 53% of millennials say their dreams of homeownership are fueled by a desire to set down roots for their growing families.

There's a lot to consider about homeownership. Are you a renter with a desire to purchase your first home? An existing homeowner considering buying a vacation home? A retiree thinking about relocating and downsizing? Whether it's a starter home, your retirement home or something in between, the decision is a big one. To help you think through all the considerations, we turned to a Real Estate Agent. Here, he shares four questions that he asks potential homebuyers and offers up some thoughts on the issues you should consider as you answer each one.

1. Is owning the roof over your head your No. 1 priority?

Your answer is going to depend on the other things you've got going on in your life. Are you socking away funds for a wedding or graduate school? Have you started saving for retirement or are you planning to begin soon? If so, how will a mortgage payment affect your budget? Buying a home should mesh with the rest of your priorities. Having other financial goals doesn't necessarily prevent you from buying a home, but it could help narrow your price range or lead you to consider postponing the purchase for a few years.

2. Will you qualify for a mortgage?

For many homebuyers, sitting down with a bank representative to discuss mortgage options (fixed or adjustable rate; 15 years or 30?) is the moment of truth. Before you get to that point, though, take a few minutes to calculate your debt-to-income ratio. That figure compares the amount of debt you have against your overall income. Banks often use it to assess your ability to handle a mortgage and the interest rate they can offer you. Generally, to qualify for a mortgage, monthly payments on your debts should come to no more than 43% of your monthly pre-tax income.

It might also be wise to go through the loan prequalification process at your bank. It's a relatively easy way to find out whether you'll qualify for a loan and, if so, how much you can afford. If you're approaching retirement and planning to downsize to a smaller home, you'll have more factors to consider when deciding how large a mortgage you might need and what type is the best fit for you.

3. Have you saved enough for your down payment?

The traditional practice is to put down at least 20% of the purchase price of a home in cash. There are, however, many exceptions to this rule. In some cases, you can provide investment assets as collateral to help reduce your down payment. There are also a number of mortgage programs available today that require little or no down payment, such as a VA loan (guaranteed by the United States Department of Veterans Affairs), FHA loan (insured by the Federal Housing Administration and issued by an FHA-approved lender) or other bank-specific programs.

It's important that you're comfortable with the monthly mortgage payment, which will include the principal on the loan, plus interest, as well as the amount put aside monthly to cover real estate taxes and insurance. It's also important to have sufficient emergency savings set aside so that you could comfortably make the mortgage payments for several months in the event your income was suddenly reduced. If you're nearing retirement (or already retired), you're likely thinking about living on your retirement income. Consider how a mortgage payment would factor into your budget.

4. Are you aware of all the expenses of being a homeowner?

Costs like heating and insurance are often higher for homeowners. You may also have to pay for things you currently get for free, such as waste removal and lawn care. And when the hot water heater breaks or a storm damages your roof in the middle of the night, you won't be able to simply call your landlord. Because home expenses vary widely by region — a heating bill in Maine looks very different from one in Virginia — your best bet is to talk to either a real estate broker or homeowners in the area where you hope to live, just to get a sense of what you are in for.

Aside from standard homeowner expenses, have you thought about how your home will affect your taxes? This is one of the many financial considerations you'll want to weigh as you plan ahead to cover your expenses in retirement. If relocating is an option, you may want to consider the eight states with no personal income tax to reduce your tax liability.