📱 Apple event

Good morning investors! September is turning out to be a bad month, as expected, with stocks down and Bitcoin hovering around $55,000.

Today we cover:

• Soft landing?

• Today’s Apple event

• Dividend investing

Our new Retirement - Focused newsletter launches tomorrow:

📊 Economy and News 

Soft landing or not

Treasury Secretary Janet Yellen aimed to reassure the public on Saturday, emphasizing that the U.S. economy remains resilient despite recent weak job reports, which have unsettled investors and weighed on the stock market.

Yellen acknowledged that job growth has slowed compared to the "hiring surge" seen during the U.S. reopening after the Covid-19 pandemic. However, she noted that the economy is "well into recovery" and "essentially at full employment."

The report: Her remarks followed the Bureau of Labor Statistics’ release of another month of lower-than-expected job numbers. In August, nonfarm payrolls—a key measure of job creation—grew by 142,000, falling short of the Dow Jones estimate of 161,000. This shortfall reignited concerns about a cooling labor market, contributing to a drop in the S&P 500 on Friday, marking its worst week since March 2023.

Despite the weaker job numbers, the unemployment rate dipped slightly to 4.2%, and August’s job growth outpaced that of July. Still, last month’s weak July jobs report had already sparked renewed recession fears, leading to a sharp sell-off in the stock market.

Yellen sought to ease concerns about the economy on Saturday, stating, “I don’t see any warning signs.”

The recent jobs data has raised questions about whether the Federal Reserve can manage a "soft landing"—raising interest rates to curb inflation without tipping the economy into a recession.

Global hits:

• Many ‘doubted the vision’: Saudi investment minister touts ‘green shoring’ on path to diversification.

• Bill Gates says he wants to work another 20 to 30 years: ‘Warren Buffett still comes into the office six days a week’.

• Russia raises main economic forecasts, sees higher year-end inflation.

Cheaper gas: America is pumping so much oil that gas could be below $3 by Thanksgiving.

📈 Stocks

S&P 500 5,408.42 (-1.73%)
DJIA 40,345.41 (-1.01%)
NASDAQ 16,690.83 (-2.55%)
BRENT CRUDE 71.01 (-2.24%)
* Prices as of Sep 9th, 12:20 AM UTC

Today’s Apple event

Apple is preparing to unveil its first line of iPhones specifically designed for generative AI, a technology that allows users to create text and images. The announcement will be made during its annual hardware event, starting Monday at 1 p.m. ET, with a livestream available for viewing.

The event's teaser, featuring the mysterious slogan "it's glow time," has left many speculating about its meaning, as Apple has yet to reveal details.

Facing high expectations, Apple must demonstrate that the new AI features and other updates in the iPhone 16 series are compelling enough for users to consider upgrading.

Since the introduction of the iPhone 12 with 5G in 2020, Apple has offered few groundbreaking reasons for users to buy newer models. Camera technology has reached a level that meets most everyday needs without major hardware changes, and improvements in screen resolution are barely noticeable to the human eye.

Numbers: iPhone sales—which account for half of Apple's revenue—have been sluggish. The company's stock remained flat until the announcement of its AI feature, Apple Intelligence, which caused shares to rise 14% since its unveiling on June 10 and nearly 18% since the beginning of the year.

Features: Apple Intelligence promises features such as more natural interactions with Siri, assistance with drafting emails, easier photo searches, and personalized responses. At Monday's event, Apple is expected to showcase how these AI features will look in practice.

Design: There may also be subtle design changes to the iPhone, such as a wider screen or updated edges, aimed at reinforcing the sense of a new upgrade cycle. Additionally, reports suggest the iPhone 16 will include a dedicated camera button.

Price: For the past four years, the base model has started at $799, and there's an ongoing debate among Apple fans about whether iPhones should be more affordable, while investors push for maximum profitability.

There are also rumors that Apple may announce updates to its Apple Watch and AirPods during the event.

Also check: Stellantis recalls more than 1.2 million Ram vehicles due to brake system software.

💵 Personal Finance

Make life better with dividends

Living off dividends means creating a passive income stream from your investments that can cover your living expenses indefinitely. You no longer need to rely on a paycheck or worry about the day-to-day fluctuations in your portfolio's value as long as dividends continue to flow consistently.

Without any ongoing effort, the dividend-paying stocks and funds you own will automatically deposit regular payments into your brokerage account. You can transfer these payments to your bank account and use them for essential expenses like housing, food, healthcare, and travel, all while keeping your shares intact. However, reinvesting dividends has some benefits too.

Dividend investing offers a straightforward way to separate your income from your time, which is crucial for retirement. But is it really possible to live solely off dividends?

Understanding with an example

The Wall Street Journal shared an example of how dividends can support a sustainable retirement. The scenario assumes a retirement fund of $1 million, with a goal of generating $40,000 annually, adjusted for inflation. The model factors in a 2% inflation rate, Treasury yields matching inflation, and stock dividends growing at 3.5% annually.

In this case, you would allocate $400,000 to Treasury bonds and $600,000 to dividend-yielding stocks at 3%, providing $18,000 in dividend income per year.

To reach the $40,000 target, you would supplement your income by selling part of your bond portfolio. After roughly 21 years, the bond portion would be depleted, but by then, your annual dividend income could have grown to $24,000, adjusted for inflation. Crucially, you would still own all of your stocks.

If your dividend income increased by 33% over time, it's reasonable to expect that the value of your stocks might also have grown, potentially reaching $800,000. Assuming retirement begins around age 60, you could still have substantial funds remaining well into your 80s.

The exact mix of stocks and bonds will vary depending on personal circumstances, but building a portfolio of quality dividend stocks yielding 3% or more, with an annual dividend growth rate of 3.5%, is a realistic goal.

Reminder!

The number of dividend-paying stocks needed to cover expenses depends on various factors, but choosing sustainable dividends is key to minimizing risk, as legendary investor Warren Buffett advises. One way to avoid losses is to focus on companies that can maintain their payouts even during short-term business downturns.

While it can be tempting to chase the highest-yielding stocks, high dividends often indicate market skepticism about a company’s ability to sustain payouts, which can lead to lower stock prices. Instead, investors should focus on a company’s ability to grow dividends over time, which helps offset rising costs.

Keep an eye on these;

• Dividend payout ratio: The percentage of profits paid as dividends. A lower ratio suggests the company has room to increase dividends safely.

• Dividend growth rate: A track record of increasing dividends indicates management’s commitment to rewarding shareholders.

• Earnings growth rate: Companies with growing earnings have more capacity to raise dividends sustainably.

Some notable dividend-paying stocks include Cisco Systems (3.5% yield), JPMorgan Chase (2.2%), Procter & Gamble (2.4%), and Johnson & Johnson (3.1%).

Find it too low? Remember the average S&P 500 Dividend Yield is 1.32%. You can, however, earn higher – up to 10% with this secret investing technique that helps investors collect $3,330+ in dividends per month—every month—and earn $50,000 or more annually in capital gains to boot.

💰 Be a Better Investor

Resources:

• Calculators

• Retirement Resources

• Dividends

• Make Money in Retirement

• Side Hustle Ideas

• Stock Deep Dives

• Investing 101 videos

👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.

👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.

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