It’s a beautiful Sunday and I have some goodies for you this week. You see, it’s mid-May and it’s the right time to take advantage of a few market phenomena so that you do not miss the boat when it comes to OPPORTUNITY.
Take a break from all the craziness this week, and read on:
· Charisse Says member takes the entrepreneurial plunge. Several weeks ago, I said that we must “slow down, reflect, and focus,” and I encouraged you to pursue those entrepreneurial dreams. Well, I am happy to report that one of your fellow members let me know the good news – they launched their digital marketing agency, Annect Digital. Congrats Kathy on your big plunge and keep on building the wealth. If you’ve made some progress on your entrepreneurial venture, share it with the community in the comments below – people get encouraged when they see others making moves.
· Interest Rate Boom Is Waning. It’s a certainty – interest rates are going up and you don’t want to miss the opportunity to lock in a good rate on a home purchase. I want you to keep this in mind if you’re a first or second-time home buyer, or you’re simply in the market for an investment opportunity. According to the National Association of Realtors, a 1 percentage point increase in rates can lead to a reduction in home sales by 7-8% because it is effectively more expensive to own a home if you’re shelling out more in a monthly mortgage payment due to interest. And, let me remind you that what may seem like a small increase in a mortgage rate can have a big effect – potentially resulting in a few hundred dollars more in your monthly payments, and this effect is only exacerbated as the price of a home gets bigger. So, if you’re in the home buying market, pay close attention to the interest rate you can lock in and let’s hope for a lower on, for now.
· Stock Buybacks In Full Force. The Wall Street Journal reported that “Of the 20 S&P 500 companies that spent the most on buybacks over the first quarter, nearly three-quarters have outperformed the index so far this year.” That’s strong performance. For those of you in the stock market or yearning to get it, you don’t want to miss this. First, what’s a buyback? A stock buyback, otherwise known as a "share repurchase," occurs when companies take their cash on hand and buy back their own shares from the market. The company, and shareholders like you and me, benefit from these actions because buybacks effectively keeps stock prices high by reducing the number of shares outstanding, which drives up per-share earnings even without overall profit growth. For instance, when Apple announced that it would embark on a $100 billion buyback program, the stock surged 4.4% the following day and 13% for the full week. Keep your eye on companies with a history of buying back stock as these companies may represent good investment opportunities down the line.
· “Trust the Process.” This phrase became more popular by NBA All-Star Joel Embiid (check out the this quick clip if this is new news to you), but it also came up in a recent New York Times article on financial advisors. I really like how the article, entitled “Why you Should Hire a Financial Advisor, Even if You’re Not Rich,” encourages individuals to revisit their financial plan, recalibrate, and then reroute if necessary. I couldn’t agree more - financial advisors will help you with the process of setting a strategy, and more importantly, sticking to it. You have to do you’re part – Trust the process! You do not want to miss the opportunity to take advantage of a good advisor’s ability to help you stay the course, particularly when things go wrong. In the comments field below, share a little more about how your financial advisor has helped you along your financial journey.
Have a wonderful week!