🪧 Stikes everywhere

and ways to make money in stocks

Morning Download 

Personal finance + economics + markets

Good morning, investors! Let’s start this new week with an exciting fact:

The S&P 500 Index is up 16.37% YTD.

Most of the returns are due to the boom in A.I. stocks.

Today we cover:

  • The world is going on a strike.

  • Interest rate decision this week.

  • Ways to make money in stocks.

Follow us on Twitter for more.

🔈 Audio version: Apple Podcasts | Spotify | YouTube

📊 Economy and News 

Everyone’s on strike

For the last few weeks, we have been hearing about strikes and now things are in full motion.

Here are the industries that are currently facing a strike:

  • United Auto Workers (UAW): About 13,000 are participating in this strike but it has the potential to worsen.

  • Screen Actors Guild - American Federation of Television and Radio Artists (SAG-AFTRA): With 160,000 actors and entertainment professionals already striking, this has proven to be a very long-running strike (started July 7th), costing the economy millions.

  • Writers Guild of America (WGA): Over 11,5000 film, radio, online media, and TV writers have been on strike since May.

  • Unite Here Local 11: The hotel industry has been in a mess since July as over 1,750 workers are presently striking.

  • Robert Wood Johnson University Hospital: Over 1,700 nurses have been striking since August due to pay issues.

Not just this, there are strikes in other countries as well:

UK 🇬🇧: Unions on the London Underground are in a long-running dispute about pensions, job cuts and working conditions.

Canada 🇨🇦: Unifor, the union that represents autoworkers in Canada, is preparing to go on strike against Ford.

Australia 🇦🇺: LNG workers have been on strike with no plans to resume work until October.

How can this information help me? This information helps determine where the market is heading, what is affecting individual companies and what may change in the future. It can help you make the right financial calls.

Global hits:

📈 Stocks

S&P 500 4,450.32 (-1.22%)
DJIA 34,618.24 (-0.83%)
NASDAQ 15,202.40 (-1.75%)
VIX 13.79 (7.57%)
* Prices as of Sep 18th, 12:20 AM UTC

Interest rate decision this week

The Fed is expected to announce its next interest rate decision this week. Fed Chair Powell press conference is scheduled for Wednesday, September 20th.

What to expect? While inflation is much lower than it was last year, we are still far from the Fed’s 2% target and it already ticked up 0.6% this month and sits at 3.7% in the U.S.

Traders see a 97% chance that the central bank will not change rates in September.

What does it mean? Historically, whenever rates go up, the stock market goes red. So, plan carefully.

🔐 Crypto

Bitcoin $26,503.90 (-0.21%)
Ethereum $1,626.27 (-0.53%)
Total market cap $1.05T (-0.55%)
* Prices as of Sep 18th, 12:20 AM UTC

Mark Cuban Loses $870,000 In Crypto Scam

The owner of the Dallas Mavericks lost about $870,000 in a crypto scam.

But, it could’ve been worse.

He got saved by blockchain watchers flagging the transactions, allowing him to move other holdings to safety.

The billionaire had returned to the crypto space after months of inactivity.

Pseudonymous on-chain sleuth @WazzCrypto was the first to notice the mishap.

The account posted screenshots of crypto wallets linked to Cuban showing a n number of ETH transactions, claiming they showcased “very ‘sus’ behavior.”

💵 Personal Finance

Ways to make money with stocks

Buying and selling stocks is not the only way to make money with stocks. You can earn $$$ by using these tricks too.

Note that these all involve various degrees of risk and is not financial advice. Even if you don’t do any of there, it’s good to know how they work.

  • Invest money in stocks that pay dividends to enjoy a regular flow of income. Companies usually pay about 4% dividends but some can go up to 20%. However, this income is not guaranteed and not all companies pay dividends so be careful.

  • Bet where the price is going to move to earn money every time you’re right. The best thing about this option is that money is earned instantly. However, there’s a downside because it’s the same as betting, i.e. you’ll lose money if the price doesn’t move in your desired direction. Called spread betting, this technique doesn’t offer guaranteed results and isn’t popular among serious investors but it can still help you make money. Look at platforms like FxPro and Vantage to get started.

  • Margin trading is essentially stock trading but it does not involve ownership. It involves borrowing money and using it to enter into trades. You deposit cash into your account, which is less than the amount you can use to trade. Popular among day traders, this technique can make or break you as rewards are exponential but you may lose a large sum of your investment if you don’t play well. Platforms like AvaTrade and XM offer margin trading;

     However, we suggest that you start with a demo account before investing real money and never use margin unless you know what you’re doing and never invest more than you’re willing to lose.

  • You can get money by getting a loan against your shares. Some brokers have tie-ups with banks or NBFCs who can issue loans. However, there is a downside because the rate is usually higher. Also, this might not be the smartest move as it may give you access to money but it isn’t the same as ‘making’ money. Also, when you take these loans, you will have to hypothecate the shares to your lender. This means you will have to part ways with your stocks if you fail to make payments.

  • Lastly, you can lend your stocks to make money. The stock lending happens through the exchange mechanism and hence it is entirely risk-free. Also, since the shares are not sold, there are no capital gains implications in this case. Candidates for stock lending typically include people who wish to short shares due to a bearish view but they don’t own those shares. Since rolling settlements only permit intraday short selling, they can borrow shares and sell them. Secondly, there are people who could have sold shares without delivery and now need a way out to avoid auction losses.

TLDR: The best way to make money through stocks is to buy and hold stocks. When you invest in stocks, i.e.: when you buy stocks, you will enjoy benefits such as dividends (if it’s a dividend paying stock) and capital gains. Still, even this method is not completely risk free, but has the best long-term track record and is most suitable for nearly everyone.

Watch this video for more on stock markets and corrections:

💰 Be a Better Investor

“The stock market is a device to transfer money from the impatient to the patient.”

Warren Buffett

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