Alchanati Campbell & Associates
The Market. “Trade war is the most stupid thing in this world,” (Jack Ma). The US has a $423 billion trade surplus with the world. The Federal Reserve left interest rates unchanged, but on course to hike in December. Officials are trying to prolong the second-longest US expansion. Household spending has continued to grow strongly. Wage growth in October was 4.6% beating inflation. Bill Gates is reinventing the toilet.
7 threats to the bull market.
FIRE. At Alchanati Campbell & Associates LLC, we believe strongly in managing your personal finances and working towards financial independence. A movement known as “FIRE” or Financial Independence, Retire Early has become increasing popular as millennials become more familiar with the ideology. Advocates of “FIRE” say that in order to retire early you should save and invest 50% of your earnings and work until you’re about 35 years old, at which point you can then retire. There is nothing wrong with this idea as long as you’re okay with living your whole life on an extremely strict budget. The “FIRE” approach is an extremely conservative way to retire early and be financially independent, but there are many other ways to approach financial independence. Everyone has a unique financial situation, but a great place to start is by getting educated on the basics of budgeting and retirement plans. Check out our website for more information. Whichever path you choose to follow, always remember that the key principles to maintaining good financial health are managing a budget, saving your income, keeping a diverse portfolio and steering clear of large amounts of bad debt.
Dividend stocks. Dividend stocks are equities that pay a portion of their earnings back to their shareholders as an added benefit to holding the shares. When looking at dividend stocks, we first look at the dividend yield, which is calculated as the yearly dividend payout divided by current share price. I personally consider anything above 2.5% a decent and lucrative yield. Shares that offer a consistently growing dividend, over at least the past 5 years, are usually considered to be of lower risk and have less volatile price action. At first glance, one may think a higher dividend yield is always the better choice, but this couldn’t be further from the truth. There is a sweet spot for dividend yields which rely on a few different factors, mainly being its dividend payout ratio (total yearly dividend payout divided by net income), and the number of constant yearly dividend growth. Ideally, we are looking for firms that have a dividend payout ratio of less than 60%~, and a company that has been raising their dividends for around 10+ years. The payout ratio is looking at the safety of the dividend in comparison to how much they are paying out of their net income each year, with the lower the % the better. The years of constant dividend growth shows that the company prioritizes growing this dividend, which means that at the end of the day they will take drastic action to retain this growth to keep shareholders happy.
How to master your mind. Your whole experience of existence is really what’s going on in your mind. All of our emotions are created by our thoughts. Most of your interpretations are not particularly true. People distract themselves because they cannot live with their minds. The healing is only going to come once you change the perspective of the pain. Suffering is your mind not dealing with the feeling in a positive way. “I feel really lonely and that’s okay”. “It’s for the best”. Growth comes from pain and challenge. Find the meaning in the pain. Your whole life is your attitude towards life. “I’ll change my thoughts to change my emotions”. To get rid of the pain, take away the thinking. Is it true or not? Is it serving any purpose? Is it going to help me? Acknowledge it and then replace it with positivity. Write down negative thoughts that come to you and number them. You will be more aware when they come. “That’s not who I am anymore, I don’t do that”. Choose your thoughts and replace it with something good. I’m holding onto a rope that’s not attached to anything. Let go, feel the pain, except that this connection is no longer in service. Say whatever is wrong, except that it’s wrong, and then say, “and it’s okay”. “I feel really lonely and that’s okay”. “What’s your perspective and attitude towards life?” I know everything in my life is there to test me and make me better and stronger.
The Alchanati Campbell and Associates Team
WHAT'S UP FRIDAY? is a weekly newsletter that will give you a summary of "What's up?" on Wall Street, in the US and around the World written by The Alchanati Campbell and Associates Team. What makes us unique is we focus on long-term knowledge; knowledge that will still be useful to you 10 years from now.