Major indexes ended February with losses (2 min read)
US stocks closed lower on Tuesday and wrapped up a tough month for the stock market. Despite the sharp rally in January, all of the major US indexes posted their second negative month in the last three. The Dow ended 4.19% lower for the month and has dipped 1.48% year to date. The S&P 500 and Nasdaq lost about 2.61% and 1.11% in February, respectively, but are still higher so far this year. The losses were mostly driven by investors' fears that the Fed will keep interest rates higher for longer.
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US home prices fell in December for the sixth-straight month (3 min read)
US home prices fell for the sixth month in a row in December due to rising mortgage rates, according to the latest S&P/Case-Shiller Home Price Index. The index declined by 0.8% in December and now stands 4.4% below its June peak. All cities in the 20-city index, including New York, Minneapolis, Phoenix and Los Angeles, have reported declines, with a median drop of 1.1%. Compared to the year before, US home prices rose 5.8% in December, but at a slower growth rate than in prior months.
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Tesla to build new plant in Mexico said to be worth at least $1 billion (4 min read)
Tesla plans on building a new assembly plant in northern Mexico, according to the country’s president. It is uncertain what models will be produced at the facility, but officials suggest it could produce the Semi truck, Roadster sports car, or even an SUV. The initial investment will be around $1 billion, with further phases potentially increasing spending to $10 billion. This will be Tesla’s first vehicle producing factory that is outside of the US and China.
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The 10 longest-held stocks in Berkshire Hathaway's portfolio (3 min read)
Warren Buffett’s ability to hold onto stocks for decades is what makes him so extraordinary, especially when the average holding period of a stock today is just about 10 months. This article lists Berkshire Hathaway’s 10 longest-held companies which include BYD, Mondelez International, UPS, US Bancorp, Johnson & Johnson, Procter & Gamble, Global Life, Moody’s, American Express, and Coca-Cola. The top five stocks were held for an average of 17 years.
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Why Do Leveraged ETFs Decay? (5 min read)
Leveraged ETFs amplify the returns with the use of derivatives to achieve a leverage ratio of two or three times the daily performance of a specific index or benchmark. Although it provides significant upside potential for investors, it also comes with a set of risks, including the potential for decay. A decay in leveraged ETFs means that its returns can greatly diverge from what is expected from the underlyings. The three primary factors that contribute to decay are compounding, volatility, and the cost of leverage.
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Small ETFs Gaining Traction in 2023 (4 min read)
Most of the time, ETF inflow lists usually repeat the same big names like Vanguard or iShares time after time because of the billions of dollars it has in assets. Although these ETFs brought in a hefty amount of inflows in dollars, on a percentage basis, there are loads of ETFs that have seen much larger flows. This article put together a list of the fastest growing ETFs this year by percentage growth. Some noticeable trends on the list include single-stock, sustainable, and “night effect” ETFs.
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That's it for today! You can reply to this email if you have any comments or feedback.
Thanks,
Thomas
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