Morning Download 

Personal finance + economics + markets

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Good morning investors! We had a great day yesterday with stocks going higher and investors showing more confidence.

Fun fact: Apple's market cap of $2.77 trillion is larger than the GDP of countries like Switzerland and Sweden.

Today we cover:

• Retiring just got easier – the government is removing junk fees.

• What a good day for stocks (earnings galore).

• How crowdfunding can benefit investors.

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📊 Economy and News 

Biden Administration is cracking down on ‘retirement investment‘ junk fees

The Biden administration is cracking down on so-called “junk fees” in retirement accounts.

Junk fees: The term refers to hidden or misleading charges that increase the total cost of goods and services. 🪘 

What’s new? The U.S. Department of Labor is planning to raise the bar for financial advisors, brokers and insurance agents who give investment advice to Americans saving for retirement.

The aim is to close “loopholes” that sometimes allow advisors to recommend investments that aren’t in a saver’s best interest but may pay the advisor a higher commission. However, the proposal does not cover ‘one time’ recommendations and only caters to long-term relationships.

The proposed law mainly covers three areas: rollovers from 401(k) plans to IRAs; “non-securities” products like indexed annuities; and recommendations made to employers on which investment funds to offer in 401(k) plans.

Not yet: The public to submit comments on the proposal. Also, this isn’t the first time that such recommendations are being made. The Obama administration tried something similar but couldn’t go ahead with it.

The impact: The proposal intends to raise investor protection and ensure that investment advice is given solely in investors’ best interests.

Global hits:

• India’s economy is on the right track, but rising unemployment poses a threat. The unemployment rate in the country has risen to a more than two-year high of 10.05%.

• China suffers plunging foreign direct investment amid geopolitical tensions and companies such as Mitsubishi and Apple deciding to end or reduce production in the country.

• European economy on the brink of recession as Q3 GDP contracts by 0.1%.

📈 Stocks

S&P 500 4,317.78 (+1.89%)
DJIA 33,839.08 (+1.70%)
NASDAQ 14,919.54 (+1.74%)
BRENT CRUDE 86.91 (+2.64%)
* Prices as of Nov 3rd, 12:20 AM UTC

Earnings continue to shine

Big names like Apple, Shopify, and Shell have reasons to rejoice due to positive earnings reports:

• Shell posts $6.2 billion third-quarter profit, announces $3.5 billion share buyback

• Starbucks impresses with a positive earnings report. Moreover, the company plans to tap young, wealthy customers to weather recession.

• Shopify shares surge over 20% on earnings beat, rosy guidance for the remainder of the year. The company might receive some upgrades soon.

• Apple earnings top estimates, iPhone sales notch September quarter record. Moreover, services revenue surpassed $22 billion for the first time. However, the stock lost 1.26% after the bel due to weak guidance.

• Moderna posts quarterly loss as company takes $1.3 billion write-down on unused Covid shots.

Also check: Uber, Lyft to pay $328 million to settle wage-theft allegations in New York state.

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🔐 Crypto

Bitcoin $34,930 (-1.40%)
Ethereum $1,804. (-2.35%)
Total market cap $1.29T (-1.56%)
* Prices as of Nov 3rd, 12:20 AM UTC

Solana is hitting new highs but experts are predicting a crash

The price of Solana’s (SOL) token has surged over the past week, rising nearly 35% to hit a price of $42.41. This latest rally brings Solana’s gains to over 322% year-to-date.

Why? The ongoing Solana Breakpoint conference in Amsterdam is generating a buzz, bringing together influential figures from the Solana community and generating excitement about its future prospects.

Also, VanEck suggests that Solana could potentially outpace Ethereum (ETH) by the end of the decade.

Careful: Some experts believe that a crash is incoming. Co-founder of crypto exchange BitMEX and chief investment officer at Maelstrom Fund Arthur is invested in the asset but he isn't fully confident.

💵 Personal Finance

How investors can make money through crowdfunding

The global crowdfunding market stood at $1.9 billion in 2021, and is expected to hit the $6.8 billion mark by 2031. Said to be growing at a CAGR of 14.3% for the 10 year period, it’s a highly rewarding industry worth investing in.

It is defined as " the practice of funding a project or venture by raising money from a large number of people, typically via the internet."

When we talk about crowdfunding, we usually think of it as a tool to gather money. However, it can also be used as an investment vehicle. Here’s how:

Equity Crowdfunding

As the name suggests, equity crowdfunding involves purchasing equity or ownership in a company. 

The first step is to find people looking for investment in the form of crowdfunding with a share of ownership in return. You make money when you bet on the right company, i.e.: when it grows in the future or gets acquired by a larger company.

In most cases, you will then have the option to sell your shares or receive dividends. 

Debt Crowdfunding

Debt crowdfunding involves providing loans to individuals or businesses. These loans typically come with a fixed interest rate, and investors make money through the interest paid on the loans.

A lot of people look for this way of raising funds as it is less demanding than banks and other traditional funding methods. However, from an investment perspective, it can be very risky because you might not get your money back. Still, people use this option because the interest rate is usually higher than what traditional banks offer.

Note: Some debt crowdfunding platforms also offer the option to sell loans to other investors on a secondary market.

Real Estate Crowdfunding

Real estate crowdfunding allows investors to pool their money with others to invest in real estate properties. It is similar to an ETF where several people come together to buy a property and make money in a variety of ways, including:

• Rental Income: If the property generates rental income, investors receive a share of that income.

• Property Appreciation: Investors hope that the property's value increases over time, and they can profit when it is sold.

• Loan Interest: Some real estate crowdfunding platforms also offer debt-based investments in real estate.

Rewards Crowdfunding

Investors in rewards crowdfunding typically receive a product or service in exchange for their investment. These rewards can be in a variety of forms. For example, a chance to attend a special event. Though not always of monetary value, these rewards can end up being beneficial.

In some cases, you may even have the option to get your hands on a new product for free. Rewards offered depend on the nature of the product. For example, if you fund a movie, you will typically get a chance to attend the premier with stars, see your name on the big screen, but not necessarily make money.

How to start: The first step is to look for a platform where you can find opportunities. Some of the top websites include KickStarter, SeedInvest, RocketHub, StartEngine, and GoFundMe.

You will have to sign up for an account (usually free) and go through available projects.

Don’t make haste. Look at projects carefully and invest in something you truly believe in.

💰 Be a Better Investor

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