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Dow Could Hit 100,000 By 2030; Adviser Urges Investors To Prepare

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The Dow Jones Industrial Average could hit 100,000 by 2030, according to financial author and adviser Ric Edelman. Edelman, who believes incredible profits are in the making for those who prepare for new economic realities. If it doesn’t hit 100,00, he said, it will probably hit 150,000.

The blue-chip index currently trades at around 21,000, meaning a surge to 100,000 would mark a roughly 376% increase.

In his book, “The Truth About Your Future: The Money Guide You Need Now, Later and Much Later,” Edelman tries to educate investors on saving for retirement in the age of technology with life expectancies of 110 and 120. People will need to work much longer than they do today because they will live much longer.

Fortunately, technology has reduced the cost of investing, thanks to exchange-traded funds.

Retirement Will No Longer Exist

“We’re not going to have a future the way our parents and grandparents had theirs,” Edelman told interviewer Scott Gamm in “The Street,” a Yahoo interview show.

Retirement now, as a 20th Century innovation is gone. It won’t exist in the 21st Century.

“You need to save in companies that are going to survive and thrive in the 21st Century,” he said.

Gamm asked Edelman how a person who has failed to start saving early can make up for getting a slow start. “It’s never been easier thanks to the Internet, and exchange traded funds and products of that type,” Edelman said. “Investing has gotten cheaper, it’s gotten easier, it’s gotten faster, it’s gotten safer.”

“Exponential technology also brings with it exponential growth… compound interest,” Edelman said.

And when you take advantage of saving not for 20 or 30 years but for 50, 60 years, you’d be amazed how much wealth you can create.

The Growth Of The Gig Economy

Gamm pointed out a person can also create wealth by having a “side hustle” as opposed to a 9-to-5 job. Edelman agreed. “Thanks to the gig economy, the shared economy, you have the ability to make money on a part time basis with very low risk, very low barrier to entry,” he said. “Anybody can do this, and an awful lot of Americans are.”

He said 16% of American workers are strictly working as contractors who work only when they feel like it.

Will The Trump Rally Continue?

Donald Trump

Noting that some people might be afraid to invest in the markets, Gramm asked Edelman what he thinks of the Trump stock rally. “We’re going to see a continuation of this for the next several decades,” Edelman said.

Over the last 50- or 60-year period, the DJIA has increased. “There’s no reason to think that won’t continue, in fact, financial technology makes that easier,” Edelman said. “We’re going to see incredible profits in the United States as well as globally.”

In his first market update to his clients last month, Edelman noted that the DJIA was up 11 percent since the election, and the S&P 500 index was up 9 percent. If this pace continues, he said stock prices will gain 24 percent this year alone.

He acknowledged there is concern that the “Trump Rally” will fizzle, and that it’s simply the “honeymoon period” new presidents typically experience. Trump’s failure to repeal the Obamacare also fuels this concern since Trump promised he would repeal Obamacare.

Should Trump also fail to reform the tax code and rein in the budget, will stock prices fall?

Why Trump Doesn’t Own The Rally

Edelman claims it’s incorrect to believe that the rise in stock prices is only due to Trump. While the election has excited investors since he’s seen as a business-friendly president, that’s not the only reason stock prices are up. Edelman points to the following economic factors fueling rising stock prices:

• U.S. corporate earnings increased 8% in the fourth quarter. Profits from overseas operations, meanwhile, rose 14.5% compared to the same period the prior year. This marks the biggest advance since mid-2010, according to the U.S. Commerce Department.

• Individuals, not just companies, are now making more money. Personal income is up 4.6% compared to the prior year. Salaries and wages are up 5.5%, according to the Bureau of Economic Analysis.

• The overall economy is growing. According to the Bureau of Economic Analysis, gross domestic product increased 2.1% in the fourth quarter.

• Consumer confidence rose in March to its highest level in 16 years, according to The Conference Board.

When people are confident they will continue to make more money, they are willing to spend more, Edelman noted.

Hence, sales of newly-built homes increased 6% in February, marking a 20% gain over February 2016 and the largest increase in five years.

The president cannot claim responsibility for much of the improvement, Edelman noted. But his positive attitude and his statements that please Wall Street contribute to the country’ economic improvement.

Trump wants to:
• reduce corporate and individual tax rates
• reduce regulation
• increase jobs
• bolster U.S. competitiveness in foreign markets
• repatriate billions U.S. corporations have overseas
• spend $1 trillion on infrastructure

Such positions please investors since they support an environment for improved corporate profits which translates into higher stock prices.

What If Stocks Fall?

The question remains: if Trump fails to pass his policies, will stock prices fall?

This is possible, Edelman noted. Hence, he gives the following advice:

He reminds his clients that portfolio diversification is important since it helps manage risks if stock prices fall. His company’s managed asset program is not totally invested in U.S. stocks.

Strategic rebalancing is also important. Most Edelman managed asset portfolios have been rebalanced this year. The company has been a seller, not a buyer, of over-performing funds. This is a way to maintain proper asset allocation.

Third, Edelman reminds clients of a core market truth. A stock price decline is not synonymous with a loss. Investors should consider what happens after a decline. History indicates stock prices move only in two directions: up and down. If prices drop, sit back and wait. Because markets move in cycles, prices eventually rise. It is always important to remember, however, that past performance does not guarantee future results.

Fourth, keep in mind every new president suffers slips in his early days, and Trump is no exception.

President Clinton failed to pass a health care overhaul in his first term. George H.W. Bush sent commodities prices into a spiral by saying he hates broccoli. The stock market survived such “crises.”

Fifth, keep in mind the stock market has increased dramatically in the last six months. Even if the Dow fell 10 percent, it would still be ahead of where it was on Election Day.

Consider All Aspects Of Financial Security

Lastly, consider that a person’s financial security will not be determined primarily by any president or Congress. A person determines their own future.

Every individual must focus on the aspects of their personal finances that they can control. This includes making sure wills and trusts are up to date, that too much in interest isn’t being paid on the mortgage, that one has the right kind and amount of insurance, the right amount of cash reserves on hand, and proper contributions are being made to retirement plans.

Edelman is chairman and CEO of Edelman Financial Services LLC. He has a radio show, six books, a column, conferences and nearly half a dozen appearances on Oprah. His books include “The Truth About Money; Ordinary People, Extraordinary Wealth” and “The Lies About Money.”

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.9 stars on average, based on 8 rated postsLester Coleman is a veteran business journalist based in the United States. He has covered the payments industry for several years and is available for writing assignments.




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4 Comments

4 Comments

  1. corporate_citizen

    May 13, 2017 at 7:02 pm

    We’ve all heard this bull(ish) talk before, just before the dot.com crash:

    https://en.wikipedia.org/wiki/Dow_36,000

    Bottom-line, the stock market cannot rise without liquidity; the hyper-liquidity dumped by central banks for decades, now. Having said that, there is a possibility that the US equity market will rocket upwards due to flight capital if foreign markets flounder. With interest rates at 5,000 year lows, sovereign debt may likely be the catalyst.

  2. thoth

    May 14, 2017 at 7:59 am

    Does the Fed have enough money to buy all those stocks?

    Oh yeah…… Wonder whats it’s balance sheet will look like in 2030

  3. kochelli

    May 15, 2017 at 6:12 pm

    This doesn’t make sense. Probably a typo…

    If it doesn’t hit 100,00, he said, it will probably hit 150,000.

    • Edward Talliot

      May 15, 2017 at 6:42 pm

      Yes, most likely..

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Uber: $120 Billion IPO?

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Uber Technologies Inc., the global ride-hailing giant, is reportedly eyeing an initial public offering (IPO) worth as much as $120 billion. According to The Wall Street Journal, the IPO could take place early next year, giving investors ample time to prepare.

More Valuable than the Auto Giants

The $120 billion value proposal was delivered to Uber last month by Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS), two of Wall Street’s largest banks. The banks were presumably advising Uber on how to position stock offerings to potential investors before underwriting the IPO.

The new valuation far exceeds the one Uber received from Toyota Motors Co (TYO), which priced the ride-sharing service at %72 billion.

At $120 billion, Uber would be worth more than the General Motors Co (GM), Ford Motor Co (F) and Fiat Chrysler Automobiles (FCA) combined. The Detroit auto giants have seen their valuations rise in the wake of the financial crisis, buoyed by a prolonged recovery and increased appetite for automobiles. However, their growth has paled in comparison to Uber’s, which was founded in 2009.

Uber’s expansion hasn’t been without growing pains. The company has been mired by regulatory bottlenecks, workplace scandals and the alleged theft of trade secrets from Alphabet Inc. (GOOGL), Google’s parent company.

It is not entirely clear what metrics the Wall Street banks used to evaluate Uber’s potential value. The company reportedly told Morgan Stanley it won’t be profitable for at least another three years, though annual revenues are expected to reach up to $11 billion this year. That’s a marked rise over the $7.78 billion generated in 2017.

While there’s no guarantee that Uber will go public in the proposed timeframe, it must issue a public offering by the end of 2019, according to WSJ sources. That’s the agreement it has in place with investor SoftBank Group Corp.

Uber by the Numbers

Uber’s startling growth over the past nine years can be represented by a few statistics. As of May 8, 2018, the company had 19,000 employees. This doesn’t include the more than 3 million drivers who are getting paid through the ride-hailing service. Since inception, Uber drivers have completed some 10 billion rides. This averages out to about 15 million rides each day. Gross bookings in 2016 alone amounted to $20 billion.

As of June, 75 million riders were using the Uber app. In the U.S. alone, adult users are projected to reach 48 million by the end of 2018. The Uber app is installed on 21% of U.S. adult Android devices.

Currently, Uber owns up to 87% of the U.S. ride-hailing market. The growth and widespread adoption of the service has opened the door to other competitors, with Lyft being the biggest. Founded in 2012, Lyft is available in about 220 cities across the U.S. as well as in major cities across Asia.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 647 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Argo Mining as a Means of Diversification

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Buying Bitcoin (or any cryptocurrency) is something we talk about a lot, but earning crypto is just as interesting. There are many ways to earn crypto that allow for arbitrage-like opportunities, but the focus of this piece is on mining companies.

More specifically, Argo Mining, which is the first cryptocurrency mining company to IPO. That might not sound like a big deal, but it gives Argo a critical competitive advantage over other companies.

The Mining Industry

One thing is clear right now, the mining industry is still very opaque. Users are constantly worried about being scammed, which is very similar to how it was when trading exchanges were popping up left and right. There are numerous options out there for companies that will help you mine cryptocurrency, but it isn’t always clear what the best choice is.

You can go one of two routes: have a mining application operate on your computer, or pay for a rented service. Honeyminer is an example of a native application that works well and pays out cryptocurrency, and Argo is an example of a “shared service”. Argo operates much like Amazon Web Services does. You pay to rent computational capabilities, but your goals end up being slightly different. The business models are sound, but very different.

Where Argo’s Advantage Comes From

Argo is the first mining company to IPO, which adds a level of trust that no other company can currently command. There are so many potential risks for users that they tend to shy away from these companies. They are worried about their payment information being ripped off, withdrawal of the coins, and the costs being greater than the revenues.

By raising $32 million in their June 11th IPO, Argo has alleviated many of these worries, and added a degree of trust to their brand. They started off mostly mining altcoins such as Bitcoin Gold, Ethereum, Ethereum Classic, and Zcash, but have recently announced Bitcoin mining packages as well.

The overall goal of Argo, as stated by their CEO, Jonathan Bixbay, is to democratize mining so everyone can participate. Right now, most of the mining is done by a select few of the elites, and Argo is enabling the wealth to be spread here.

Can Argo Actually Make You Money?

The big question to answer about Argo is whether you can actually make money doing this. The costs per month could potentially be higher than the value of the crypto you mine. Sure, you don’t have to pay trading fees on them, but it is important to calculate exactly how much you are coming out ahead.

It depends on the package, but you could potentially end up paying more for the fees than you earn. The trick is to remember that the crypto market isn’t like other markets – it isn’t perfectly efficient – and there are always arbitrage opportunities if you look hard enough.

An Alternate Route to Being Long Crypto

With much of crypto mining currently being done by elites because of the massive investment involved, it is clear that Argo has tapped a massive market. The company had a waitlist of 50,000 in September, and with the funds from the IPO, they can finally finance the expansion of their operations in a way that will speed up the number of people they can bring online.

If you believe Bitcoin (or cryptocurrencies in general) is coming out of a rut soon, then this is a good way to diversify into the market. Do your own tests and make sure that you are coming out ahead after the fees, but it should be a simple way to make some extra money in what is currently an inefficient market.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Ripple Price Analysis: XRP/USD at Risk of September Bull Run Being Completely Deflated

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  • Ripple’s native token XRP is at large danger of totally giving back the big September bull run gains. 
  • XRP/USD is capped to the upside at $0.6000. Vital near-term support seen tracking from $0.4550-0.4350.

Ripple’s native token XRP price has further been sent down to the burning south. This comes after the chunky and excessive bull run observed at the back end of September. XRP/USD had run higher by some 190%, from lows of around $0.27. Bulls managed to see a spike up, just short of $0.8000, within the early $0.7900 territory. Since this initial big trek to the north, up to mentioned highs, the price has dropped around 40%.

September Recap

There was not one catalyst behind the rocket move of around 195% in September for Ripple’s XRP. A few developments are worth recapping. Fintech heavyweight in Japan, SBI Holdings, announced their plans to launch a Ripple-powered mobile payment application known as MoneyTap. Elsewhere, London-based firm TransferGo announced they are using Ripple’s blockchain. This will be to facilitate digital currency transfer from Europe to India.

Furthermore, the litigation between R3 and Ripple Lab announced that they have reached a settlement of all outstanding litigation between the parties.  To top all the above, there was huge anticipation ahead of the xRapid product launch. This is now live, available for commercial use, allowing both individuals and businesses to access instant liquidity and low fees, using Ripple’s XRP. This trumps the traditional process of a 2-3 day wait. A sense of buy on the rumor sell on the fact was definitely observed here.

Technical Review

XRP/USD is on its journey south, looking to completely give back September’s run higher. Starting off with resistance, as can be seen the price upside has been capped at $0.6000. There hasn’t been enough momentum since the exhausted rally, to clear this chunky supply cap. Firm rejections have been observed at the mentioned resistance block since the bull run. If life kicks back into the bulls, they will need to comfortably settle around $0.7500, before then conquering $0.8000. Ripple’ XRP is still a long way away from of reclaiming the big psychological $1.00, with much supply even seen within the early to mid $0.9000 region.

XRP/USD 4-hour chart

Given current downside momentum, near-term support is now eyed from a range of $0.4550-0.4350. This is a demand zone, having proven to be the case during the fall on 25th September. The price managed to receive a bid within this area, moving back towards the $0.6000 resistance, before again faltering. Should the demand zone fail to hold, there will likely be a very fast move, back down to 0.2700-0.2500 area. XRP/USD had been within consolidation mode, for much of September, it was floating around this territory.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 32 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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