Investor's Playbook

📖Today’s Agenda

• Stock Market : Dow Jones and S&P 500 Hit Records as Leading Stocks Surge; Tesla, Netflix Earnings Awaited

• Entrepreneurship : TOP 3 AI TOOLS OF THE WEEK

• Personal Finance : The 4 Basic Pillars Of Investing Success

📈Stock Market

Dow Jones and S&P 500 Hit Records as Leading Stocks Surge; Tesla, Netflix Earnings Awaited

Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. Tesla (TSLA), ServiceNow (NOW) and Netflix (NFLX) headline a big earnings week.

The S&P 500 and Dow Jones hit all-time highs Friday with the Nasdaq at a two-year best. Big techs led the market rally this past week. Small caps struggled during the week, but they did rebound from support.

Friday excepted, market breadth has been lackluster in 2024. But market leadership is robust, with a significant number of stocks flashing buy signals in the past few days with many others setting up. Apple (AAPL) offered an early entry Friday, though with some caveats. Meanwhile, Cloudflare (NET) flashed a buy signal with DraftKings (DKNG) on the cusp.

Investors can add exposure gradually, but earnings season looms large.

In addition to Tesla, ServiceNow and Netflix, Intel (INTC), ASML (ASML), Lam Research (LRCX), KLA (KLAC), D.R. Horton (DHI), Paccar (PCAR) and United Rentals (URI) are on tap, just to name a few.

Tesla stock, despite its slump, is still closely watched by investors. ServiceNow kicks off software earnings, while Intel, ASML, LRCX and KLAC offer more insight into the booming chip sector. D.R. Horton, Paccar and URI stock show strength beyond techs.

Tesla and Netflix Earnings

Tesla earnings are due Wednesday night. Analysts expect EPS to plunge 39% vs. a year earlier to 73 cents a share, with revenue up more than 5% to $25.62 billion.

The focus will be on the 2024 outlook for gross margins and deliveries, especially with price cuts and incentives continuing early in 2024.

Netflix earnings are on tap Tuesday night with subscriber growth again in focus. NFLX stock is just below a traditional buy point, finding support at the 10-week line.

🎯Entrepreneurship

TOP 3 AI TOOLS OF THE WEEK

1. SingleStore

DATA TO DATA

SingleStore accelerates data analysis for scientists, enhances development dynamics for app developers, and revolutionizes AI writing and machine learning. It streamlines operations, enabling efficient data manipulation for improved productivity across various sectors, including finance, marketing, and communication.

2.Stormz

DATA TO DATA / TEXT TO DATA

Stormz is extensively used in the realms of Copywriting and Marketing/Communication, establishing itself as a powerful tool that catalyses growth. In Copywriting, it aids in crafting compelling narratives that resonate with the target audience, ensuring the message hits the mark every time. In the arena of Marketing and Communication, it assists in the creation and optimization of impactful marketing strategies, driving successful campaigns that hit and exceed set objectives.

3. Framer

WEBSITE TO WEBSITE

Elevate your website’s impact with Framer. Harness the capabilities of the best AI website builder, featuring AI Translation for seamless multilingual experiences, Text Rewrite for polished content, and AI Style to precisely define your brand tone.

💸Personal Finance

The 4 Basic Pillars Of Investing Success

Following these four investing tips will help you invest better and make it easier to reach financial freedom. They might seem a bit “boring”, but they will leave you more time to enjoy life with your family and friends. They should also leave you with more money for that additional time.

1. Invest Regularly

When you set up automatic contributions to your investments, you will buy more shares when prices are low and buy fewer shares when prices are high. More importantly, you will continue to buy investments when the sky seems to be falling. The worse the stock market has done recently, the more likely you will see above average returns going forward.

Do you know how amazing your returns would have been if you had kept putting money into your 401(k) (for our American friends) each paycheck through the financial crisis? And the Covid-19 pandemic? And during every other reason people found to panic out of markets?

People like me did it, and let me tell you, the investment returns look great. Setting up automatic contributions means you don’t have to think about it. It also helps to ensure you continue putting money in when times get scary.

This pillar of investing success is often called dollar-cost averaging. It doesn’t eliminate investing risk but increases the odds of reaching your financial goals. It should also help lower your stress level when investing.

2. Have A Diversified Investment Portfolio

As the saying goes, don’t put all your eggs in one basket. If you consistently invest in a single company and it goes bankrupt (or run into trouble), you could see your investment get killed.

Diversification won’t eliminate volatility in your investment portfolio, but it will essentially eliminate the risk that your money will go to zero. I guess it is possible that every company in the S&P 500 could go bankrupt in a single day. If that happened, there will be bigger issues to deal with than your nominal investment returns.

You may think a company is amazing because the stock price has been skyrocketing. However, owning stock in only one company (no matter how fabulous you think it is) dramatically raises your risk of losing all your money. If you aren't diversified, you are likely speculating rather than investing. Also, the more a stock goes up, the greater the chance that the value will decrease in the future.

3. Rebalance Your Portfolio Automatically

Typically, rebalancing is done once a year. Most of the time, you can set this up to happen automatically at some regular interval—for example, annually. If you never rebalance and the stock market goes up, you will end up with a riskier portfolio than what you initially set up. This could leave you getting hit harder if the stock market eventually takes a dip.

On average, the market has a 10% dip about once per year. That shouldn't be a cause for concern but something to be aware of. These temporary dips don't matter much if you can ignore them. They can be devastating if you freak out and sell good investments at a discount, only to repurchase them later at a premium. Or worse, sell and then put that money under a mattress or deposit it in a low-interest bank account where it will languish.

Conversely, if the stock market goes down for a while, you could end up with a more conservative portfolio than is appropriate for you. Additionally, you could miss out on gains when the market rebounds. Rebalancing resets the portfolio to the risk level you started with. It also helps you buy low and sell high over time.

4. Avoid Continuously Messing With Your Portfolio

Even if you were able to pick the perfect investment portfolio, guaranteed to get amazing returns, there still would be a way to screw it up.

Historically, the S&P 500 has earned around 11% annually over the long run. The average investor doing it alone typically ends up getting something like one-third of that total return over time, according to the DALBAR studies. The study is released every year, but the results seem to be similar year in and year out.

Whether the market is going up or down, some people make poor financial moves. Those kinds of decisions would kill their financial returns even if they were lucky enough to pick the best investment options at that time.

The bottom line is set up the investment success pillars one through four. Have them work automatically and let them do their thing. You will be on track for financial freedom before you know it.

Investing success is often much more about avoiding big investing mistakes than being able to perfect the time to buy and sell a specific investment. These basic pillars of success can help you avoid some of the most common investing mistakes.

For extra credit, talk with a financial planner to determine how much and where you should invest each month in order to reach your personal financial goals. Hopefully, they will also throw in some valuable tax planning to help you reach financial freedom faster and easier.