Why Occidental Petroleum, Diamondback Energy, and Battalion Oil Corporation Soared Today (3 min read)
US oil & energy stocks surged in prices alongside the rise of oil prices despite the broader market's continued sell-off. Oil prices have been dropping in recent months over the fear of increasing production. However, news on Monday shows that OPEC+ might reduce supplies which brought the oil prices higher. With the world cutting back on supplies, US oil & energy companies can gain a bigger share while benefiting from the higher price. This might be the reason why Warren Buffet is heavily invested in this sector, specially with Occidental Petroleum where he recently increased his stake to 50% of the company.
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Stocks May Be Headed for a Major Skid (2 min read)
US stocks began slipping on August 16th, ending the two months rally, as investors see the Fed will likely continue to increase rates to stomp inflation. It slid even further after Jerome Powell’s speech on Friday where he confirmed the Fed’s determination to bring inflation down even if it meant short term pain for the economy. The earnings growth rate for US stocks is at the lowest since the peak of the pandemic. There is an increase in investors betting against the market and US equity funds had an outflow of $1.2 billion last week. Putting all these together, the US stock markets are looking gloomy in the near future.
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Musk subpoenas Twitter whistleblower as he battles to end takeover deal (2 min read)
Elon Musk subpoenaed Twitter’s former security chief, Peiter Zatko, seeking information to support false spam counts that led him to end the Twitter takeover deal. Peiter Zatko recently filed a whistleblower complaint accusing Twitter’s poor spam policies and weak security measures. Twitter had denied those accusations and said Peiter Zatko was fired due to poor work performance. A Twitter attorney pointed out that Elon’s attempt to use spam as a reason to end the deal is legally irrelevant because Twitter had previously said those counts were only an estimate. The two sides are heading to a five day trial on October 17.
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The Search for Higher Yields Isn’t Over (3 min read)
This article compiled a list of 15 equity ETFs with the highest yields. The two main categories are covered call and international income. Covered call ETFs limit the upside of the underlying asset or index by selling options. The fees from selling these options are distributed to the ETF holders which makes the yield guaranteed. International income ETFs are another category that offers high yield. These ETFs typically hold stable and strong cash flow companies that pay out high distributions. As they are equities at the end of the day, the higher yield comes with a higher risk than treasury or investment grade bond investments.
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My Top ETF to Buy and Hold Forever (3 min read)
The Vanguard S&P 500 ETF (VOO) is one of the best ETF to hold for long term investing. VOO tracks the S&P 500 index which consists of 500 largest companies in the US. The S&P 500 has historically proven to survive market volatility and recovers any crashes eventually which makes it likely to achieve consistent growth over time. Investing in a major index can also save you time from researching individual stocks. However, the only downside is that you will never beat the market because you are simply following it.
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Want $50,000 per Year When You Retire? Here's How Much You Need to Save by Age 65 (4 min read)
The average age of retirement is 65. A common way to know how much you can spend when you retire is the 4% retirement rule. The first year you withdraw 4% from retirement savings and repeat for the following years while adjusting for inflation. Based on this rule, you will need $1,250,000 saved up to spend $50,000 a year. However, when you take other sources of retirement income into consideration such as social security or pension plans, the amount you need to save can be as low as $883,147 for a single person or $641,165 for married couples. Other factors like working part-time or delaying retirement will also significantly reduce how much you need to save.
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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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