Investment
The Best Investment Decision I Made in 2022
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It’s hard to believe 2022 is almost over. It’s been quite a ride. In this video, Fool.com contributors Tyler Crowe and Matt Frankel, CFP, take a look at their best investment decisions of the year.
**Stock prices in this video as of Dec. 7, 2022. This video was published on Dec. 8, 2022.
Matthew Frankel, CFP® has positions in Iron Mountain and Redfin. Tyler Crowe has positions in Iron Mountain and Redfin. The Motley Fool has positions in and recommends Iron Mountain and Redfin. The Motley Fool recommends the following options: short November 2022 $17 calls on Redfin. The Motley Fool has a disclosure policy. Matthew Frankel is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
Investment
Zacks Investment Ideas feature highlights: Micron, Lululemon and Nike – Yahoo Finance
For Immediate Release
Chicago, IL – March 18, 2024 – Today, Zacks Investment Ideas feature highlights Micron MU, Lululemon LULU and Nike NKE.
2 Nasdaq 100 Stocks to Buy Before Earnings – and Hold Forever
Today’s episode of Full Court Finance at Zacks dives into key stock market levels to watch for as Wall Street bulls attempt to keep the Nasdaq and Bitcoin near record highs. The episode then breaks down why investors might want to buy two Nasdaq-100 stocks— Micron and Lululemon — ahead of their upcoming earnings reports.
The stock market took a breather on Wednesday and Thursday following its post-CPI release pop.The bulls have pushed stocks higher in 2024 without sending the market to euphoric altitudes. The nearby chart showcases the regular pullbacks to the 21-day throughout the year.
The Nasdaq is trading near fresh highs while sitting at neutral RSI levels. Bitcoin’s surge to new records has also likely helped stop the Nasdaq from overheating. Plus, there are tons of market movers such as Tesla and Apple trading at highly enticing levels for long-term investors.
Micron Technology, Inc. – Q2 FY24 Results Due on March 20
Micron shares have climbed about 70% in the last year vs. the Zacks Tech sector’s 50%. MU has tracked the Tech sector over the last decade, up 290%. Yet MU trades 9% below its average Zacks price target and 10% below its recent highs.
The stock is approaching its 21-day moving average after sellers prevented Micron from breaking too far above its previous records. Micron stock had also hit overbought levels.
Micron is the giant of memory chips, which have been more historically cyclical than the broader semiconductor market and heavily impacted by pricing.
Thankfully, Micron’s outlook is impressive as the memory chip maker benefits from data center expansion and booming AI growth. Micron predicts that AI will drive record demand for memory chips.
Micron is projected to post 45% revenue growth in FY24 and FY25 to soar from $15.54 billion last year to $32.94 billion. The company’s adjusted earnings growth outlook is even stronger and its most accurate/recent EPS estimates came in miles above its already improved consensus.
Micron’s upbeat EPS revisions help it land a Zacks Rank #2 (Buy). Micron’s balance sheet is sturdy and 23 of the 27 brokerage recommendations Zacks has are “Strong Buys.” If Micron impresses on March 20, the stock could finally enter a new trading range.
Lululemon – Q4 FY23 Results Due on Mach 21
Lululemon stock has soared 60% in the last 12 months vs. Nike’s -15% drop, its Zacks sector’s 17% climb, and the Market’s 32% jump. Lululemon has skyrocketed nearly 900% in the last decade vs. the benchmark’s 180% and Nike’s 167%. LULU, like Micron, sits at an attractive range for long-term investors.
LULU trades 10% below its average Zacks price target and it recently rebounded above its 50-day after buyers came in at its long-term 21-week moving average. Plus, Lululemon trades at a roughly 50% discount to its 10-year highs at 31.9X forward earnings and in line with its 10-year median.
Lululemon’s transformation into a well-rounded sportswear and apparel company pushed Nike, Target, and countless upstarts to mimic the athleisure giant’s style. Lululemon’s high-margin growth is highly impressive as higher-income shoppers power it through various economic conditions. Lululemon executives project it will double its net revenue between 2021 and 2026, driven by direct-to-consumer, menswear, and international expansion.
LULU is projected to post 18% revenue growth in FY23 and 14% higher sales in FY24, following 26% average expansion in the trailing five years. LULU is projected to expand its bottom line by 24% in FY23 and 15% in FY24. Lululemon, which grabs a Zacks Rank #3 (Hold), is buying back stock, supported by its robust balance sheet.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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NIKE, Inc. (NKE) : Free Stock Analysis Report
Micron Technology, Inc. (MU) : Free Stock Analysis Report
lululemon athletica inc. (LULU) : Free Stock Analysis Report
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Investment
Your CPP questions answered: Should I take my CPP benefits early and invest them? – The Globe and Mail
Sign up for the Globe Advisor weekly newsletter for professional financial advisors on our sign-up page. Get exclusive investment industry news and insights, the week’s top headlines, and what you and your clients need to know. For more from Globe Advisor, visit our homepage.
This is the latest article in our series, Planning for the CPP, in which Globe Advisor explores the decisions behind when to take CPP benefits and reviews different aspects of the beloved and often-debated government-sponsored pension plan.
As part of the series, we invited readers to ask questions about their Canada Pension Plan (CPP) retirement benefits and find experts to answer them. This week, Owen Winkelmolen, an advice-only financial planner and founder of financial planning firm PlanEasy.ca in London, Ont., answers questions about the pros and cons of taking CPP benefits early and investing them:
Should I take my CPP at 60 and invest it? I know the returns will depend on stock market returns over time, but can you do some calculations on average returns of, say, 5 per cent? What are the pros and cons of this strategy versus waiting until 65 or 70?
There are many pros and cons to delaying CPP benefits. Your question alludes to the famous CPP break-even age question, so let’s explore that first.
Let’s assume your CPP at 65 would be $1,000 a month and your CPP at 60 would be $640 a month, which is 36 per cent lower for starting five years early. If you take the CPP starting at 60, there would be $38,400 in CPP payments made between 60 and 65. However, if you take the CPP starting at 65, these monthly payments are $360 more.
The simplistic break-even analysis for delaying CPP would suggest that your break-even happens after 107 months, $38,400 divided by $360, or around the age of 73 and 11 months. But as your question astutely points out, that doesn’t include investment returns, so how does the break-even age change when we add investment returns?
If we add real investment returns of 3 per cent (5 per cent nominal returns and inflation of 2 per cent), the break-even happens later, at 76 and four months. Investing those early CPP payments between 60 and 65 (or drawing less from your investment portfolio during that time) means the break-even point gets pushed further out. If you delay the CPP from 60 to 70, the break-even point happens even later, at 81 and three months.
This analysis includes several assumptions:
- That your marginal tax rate is the same now and in the future. If your marginal tax rate is lower or higher in the future, this will impact the analysis.
- That the zero-earning years being added between 60 and 65 will not be a drag on your CPP benefit; this only applies to someone who has made a maximum contribution over 39 years.
- It doesn’t include the impact of variable investment returns and inflation rates.
- It doesn’t consider Guaranteed Income Supplement (GIS) clawbacks after the age of 65 for lower- and moderate-income retirees. GIS clawbacks are triggered by CPP benefits and other taxable income, so a higher CPP benefit after 65 may not be as attractive.
- That you have a long and healthy retirement and can reach the break-even age.
If you invest all your CPP income (taken at 60), what sort of return do you need to do better than waiting until 65? That’s assuming you can still work until 65, or have other investments you can live off.
To answer this question, we’ll build on the previous answer.
Intuitively, you may think a higher investment return will help you reach your CPP break-even point faster, but this isn’t the case. The opposite is true.
Notice how, in the previous answer, the break-even age moved later when we added investment returns? That’s because delaying CPP benefits requires you to draw down on other investment assets to close the income gap. Drawing down on investment assets has an opportunity cost in the form of lost investment returns. The higher your expected investment returns, the larger the opportunity cost.
In the above example, the break-even point for delaying taking the CPP from 60 to 65 with real investment returns of 3 per cent happens at the age of 76 and four months.
Assuming higher real investment returns of 4 per cent (6 per cent nominal returns and inflation of 2 per cent), the break-even point happens later, at 77 and five months.
If we go in the opposite direction and assume lower real investment returns of 2 per cent (4 per cent nominal returns and inflation of 2 per cent) then the break-even point happens earlier, at 75 and four months.
When you have a more conservative portfolio – or a portfolio with higher investment fees – and the expected rate of return is lower, then delaying the CPP and drawing down on your investment portfolio has a lower opportunity cost.
Everything else being equal, delaying the CPP and drawing down on your investment portfolio is slightly more attractive for conservative investors or investors with higher investment fees. Delaying the CPP is slightly less attractive for aggressive investors or investors with lower investment fees.
For more from Globe Advisor, visit our homepage.
Investment
World's Largest Pension Fund Seeks Information on Bitcoin Under the Portfolio Diversification Plan – CoinDesk
For the time being, GPIF invests in domestic bonds, domestic stocks, foreign bonds, foreign stocks, private equity, real estate and infrastructure. While the pension fund is seeking information about bitcoin, there’s no guarantee it will choose to invest in the world’s largest cryptocurrency once the evaluation is completed.
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