Natalie Pace Blogs
Photo of Natalie Pace by Marie Commiskey. Avalon Photography.
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 Source: Waymo. AI. Robotaxis. Electric Vehicles. And the Magnificent 7. GM crashes. Waymo expands. Tesla launches. More than a few Magnificent 7 companies have their fingers in the pie of autonomous vehicles and robotaxis. You might have seen Waymo’s robotaxis around town in San Francisco, Phoenix or Los Angeles, or Tesla’s online. Are you aware that GM scrapped their Cruise robotaxi project on Dec. 10, 2024? According to GM’s press release, this will save the company $1 billion annually – beginning in the first half of 2025. Microsoft, GM’s partner on the project, is expecting to take an $800 million impairment charge in the next quarter as a result. Apple also reportedly canceled Project Titan in late February 2024 – a decades-long project for their own autonomous EV. So, which companies are leading the pack in terms of AI, robotaxis and electric vehicles, and why are some pulling out? Here are the topics we’ll cover in this blog. Robotaxis and the Algorithms that Drive Them GM Puts Cruise on Pause Magnificent 7: Google, Microsoft, Nvidia and Tesla Autonomous Vehicles Don’t Drive Drunk Magnificent 7 Buybacks And here is more information on each point. Robotaxis and the Algorithms that Drive Them Microsoft was the AI behind the GM Cruise robotaxi. Waymo is a Google project. I’ve ridden in a Waymo. You can check out my Waymo ride on my Instagram channel. (Click to access.) Tesla wants to put its cybercabs on roads before 2027. However, Elon Musk also promised they would be available in 2020 back in 2019. As mentioned above, Apple pulled their project. Nvidia is adding staff in China to focus on autonomous driving technology. Whether we like it or not, cars now run on AI and autonomous technology. Whether it assists us in parking in a tight space or stops us cold before we have an accident, robots are gaining control of the steering wheel, gas and brakes. For many Magnificent 7 companies, autonomous driving is another robust revenue stream. However, that only happens if the auto industry itself remains strong. So, why is the #1 carmaker in the world, GM, cutting back? GM Puts Cruise on Pause GM had a high-profile robotaxi accident involving a pedestrian in San Francisco that went viral. The settlement reportedly cost GM $8-12 million. The public and political appetite for having Cruise cars on the road dissolved. However, GM also cited increased competition in autonomous and electric vehicles as factors in the decision to focus away from robocabs and back on autonomous driving technology. Meanwhile, Waymo is expanding and has the first mover advantage in the U.S., while Baidu’s Apollo Go robocab is expanding in China. China is moving rapidly to EVs, and represents the biggest EV car market in the world. Of the 17 million EVs that are expected to be sold in 2024, China could purchase 10 million, or almost 60%. More and more, Chinese consumers are purchasing from Chinese EV makers, pushing the year-over-year revenue growth of many Chinese automakers to the top of the Auto Stock Report Card. With hundreds of EV makers in the market, including new EVs from Chinese smartphone makers, the price wars have been intense. Few companies are profitable. General Motors and Ford Motor Company still sell the most cars by far (in terms of revenue), at $172 billion and $176 billion, respectively. However, increasing protectionism (tariffs) is likely to make a challenging auto environment even more daunting in 2025. GM, Stellantis, Ford and Volkswagen have all announced furloughs and layoffs. Tesla reduced its workforce by 14% in 2024 – laying off around 19,000 employees. The automakers are definitely hunkering down for a challenging 2025. The questions are, “How will this affect the autonomous driving AI companies?” and “Is Tesla a carmaker or an AI and technology investment?” Magnificent 7: Google, Microsoft, Nvidia and Tesla Google, Microsoft and Nvidia all benefit from being technology and AI companies that are expanding into the autonomous vehicle space. Meanwhile, automakers, like Tesla, are seeing their main revenue stream impacted by price wars and Chinese competition. Tesla’s year-over-year revenue growth was just 8%, compared to 11% (Alphabet) 16% (Microsoft) and 94% (Nvidia). While robotaxis and EVs are exciting and are the fastest growing vertical in transportation, as developed world economies slow down, car sales are the first industry to be impacted. (We saw GM and Chrysler go belly-up in the Great Recession.) Economists are predicting lower GDP growth for the U.S. and China in 2025. The differences between automakers and AI leaders are very important distinctions to make. While Tesla talks up its AI and technology, car sales (and credits) make up 80% of the company revenue – 90% if you include vehicle maintenance and the supercharger network. As Tesla soars to all-time highs, the company boasts a very expensive price tag – a P/E of 130 – the highest on the Magnificent 7 Stock Report Card (which includes the very popular Nvidia). Email [email protected] with AI SRC or Auto SRC in the subject line to receive an updated report card. Autonomous Vehicles Don’t Drive Drunk The move for autonomous vehicle technology and robocabs is based upon the premise that robots don’t drive impaired. Any poor decision (like the one that resulted in the Cruise pedestrian accident) can be reprogrammed for better results. Elon Musk envisions a world where your personal vehicle can moonlight as a robocab while you sleep – earning some extra income. There is another important consideration that doesn’t get enough conversation: that single-occupancy vehicles create gridlock and are not the most sustainable transportation option. Transportation is the largest emitter of CO2 in the U.S. (source: EPA.gov). European countries that focus on public transportation have a CO2 per capita that is 1/3 that of the U.S., Canada, Australia and the Middle East, where SOVs are rampant. While EVs have a lower CO2 footprint than ICE* vehicles, having one car per adult in the developed world comes with a high demand for lithium, copper and nickel. Companies like Redwood Materials are working hard to recycle these elements. *internal combustion engine  Magnificent 7 Buybacks 2023 and 2024 were all about the Magnificent 7. As I’ve mentioned repeatedly, without the spectacular performance of Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla, the S&P500 would have performed at less than half the speed, which is what the Dow Jones Industrial Average did. According to Howard Silverblatt, the senior index analyst of S&P Dow Jones Indices, “[Year to date], the Magnificent 7 has accounted for 53.5% of the total return, as the 28.35% return would have been 13.17% without them.”  One of the reasons why the Magnificent 7 has been on fire is that these companies are also the biggest buyback purchasers. The top 4 Buyback rankings go to Apple, Alphabet (Google), Nvidia and Meta. Microsoft is in the Top 10.  These companies all have a war chest of cash and have aggressive buyback authorizations, so it’s easy to assume that the repurchases will continue. However, that doesn’t guarantee continued share price gains. 2022 was the top performer for buybacks, with $922.68 billion in shares bought back by companies. Yet, the NASDAQ and the Magnificent 7 companies were some of the worst performers in a year that saw losses of -19.44% in the S&P500.  Sources: Morningstar, S&P Dow Jones Indices, Coinbase, MSN.com. Bottom Line Robotaxis and autonomous driving are all part of the artificial intelligence craze. They are embedded in the cars of the future and will continue to push technology’s growth dominance. The potential is factored into the elevated share prices, however. While I would definitely want to own a technology-heavy large cap growth fund, and extra hot slices of Breakthrough Technology and Artificial Intelligence ETFs, now would be a great time to capture gains and make sure that my plan is age appropriate and properly diversified. Many “conservative” portfolios have missed out on these gains (and might have suffered losses on their long-term bonds). There is a way to fix this, with a carefully crafted plan. Email [email protected] or call 310-430-2397 to learn more about our easy-as-a-pie-chart nest egg strategies, Financial Freedom Retreat and unbiased 2nd opinion. Join us at our online New Year, New Me Financial Freedom Retreat Jan. 10-12, 2025 (online) and our Rebalancing Masterclass (Capture Gains & Protect Principal) on Jan. 18, 2025. If you'd like a life-changing adventure of a lifetime, be our guest at a royal manor house in Cornwall, England, March 7-14, 2025. Only one room is still available. Call 310-430-2397 or email [email protected] to learn more. Learn how to: * Invest in hot industries, such as Nvidia and artificial intelligence, * Hedge against a weaker dollar, * Invest and compound your gains, * Green your retirement plan, * Easy and efficacious nest egg strategies, * Get hot and diversified (including in artificial intelligence and EVs), * Evaluate stocks, * Keep an age-appropriate amount safe, and, * Know what's safe in a Debt World. You'll even discover how to save thousands annually with smarter big-ticket choices. Yes, it's a complete money makeover. Email [email protected] or call 310-430-2397 to learn more and register. Learn the 15+ things you'll master and read testimonials in the flyer on the home page at NataliePace.com. Register with friends and family to receive the best price. "Ten minutes into the first day I was already much smarter about investing than I ever thought I would be in my life and I knew I was in exactly the right place at this retreat. I am amazed at how EASY and FUN it is to make my money work for me and those I love. I think this kind of information should be compulsory in schools. I wish I'd learned this sooner." CM If you’d like an unbiased 2nd opinion on your current wealth plan, email [email protected] for pricing and information.  Join us for our Online New Year, New You Financial Freedom Retreat Jan. 10-12, 2025. Email [email protected] or call 310-430-2397 to learn more. Register with friends and family to receive the best price. Click for testimonials, pricing, hours & details.  Join us for our Restormel Royal Immersive Adventure Retreat. March 7-14, 2025. Email [email protected] to learn more. Click for testimonials, pricing, hours & details. Register now. There is only 1 room available. This retreat includes an all-access pass to all of our online training for a full year for two, and three 50-minute private, prosperity coaching sessions. Much more affordable than you might think. Email [email protected] to learn more.  Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. Natalie is the bestselling author of The ABCs of Money and The Power of 8 Billion: It's Up to Us, and is the co-creator of the Earth Gratitude Project. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). Her book The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 6th edition of The ABCs of Money and the 2nd edition of Put Your Money Where Your Heart Is are the most recent releases of these books. Follow her on Instagram. Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden. Check out Natalie Pace's Substack podcast on Apple and Spotify. Watch videoconferences and webinars on Youtube. Other Blogs of Interest Charitable Giving. Nonprofits that are Worthy of Supporting. The DJIA Plunged 1100 Points After the Dec. 2024 FOMC Meeting. Why Are So Many Safe Investments Losing Money? A Bargain-Priced AI Company. Canadian, Australian and U.S. Banks. Are Any of Them Safe? Ireland. Rich in Technology, Biotechnology and Agribusiness. Black Friday and Cyber Monday Sweepstakes. Robo Investing and AI. No, They are Not Foolproof. Stocks Soar as Nvidia Joins the DJIA. Copper. Peru ETF Outperforms the S&P500. 4 Ways to Celebrate World Sustainability Day, Oct. 30, 2024. Will There be a Santa Rally or will the Election Ruin Everything? The Chips are Down. ASML, Intel and Super Micro Computer Plunge. Is Nvidia Next. Will Insurance Companies & Homeowners Weather the Hurricanes? 9 Money Secrets of the Ultra Wealthy. Housing & Budgeting Solutions. Will Boeing Be Booted Out of the Dow Jones Industrial Average? Arkansas Sues Temu for Data Theft. We Must Be the Boss of Our Money. Why? Oil Prices Tumble. Why? Sweepstakes for the Release of The ABCs of Money. 6th Edition. Should You Go Conservative or Aggressive? Fast Fashion. Fossil Fuels. Plastic Clothing. Atacama Desert Waste Dumps. Can Crowdstrike Recover from its Colossal Catastrophe? Featuring a Cybersecurity Overview. Fintechs and Brokerages that Fail are Not FDIC-Insured. Stocks Keep Hitting New Highs. Are You Thinking "Capture Gains?" 5 Green Tips for Clean Beaches Week. Nio Sales Expected to More Than Double in 2Q 2024. So, You Think You Want to Be a B&B Owner... Retiring Soon? Start Planning Now. 2024 Rebalancing IQ Test. Answers to the 2024 Rebalancing IQ Test. May is National Bike Month. Paris and Amsterdam are the Stars. Vacations that Color Our World Forever. 9 Inflation, Budgeting, Debt Reduction and Investing Solutions. China & Russia Double Their Gold Holdings. 2024 Investment of the Year? Bitcoin Sets a New Record High. The Importance of Rebalancing. Uh. Oh. More Bank Trouble. Housing. Unaffordable. What Works? Case studies and creative solutions. 2024 Investor IQ Test. Answers to the 2024 Investor IQ Test. The Underperforming DJIA, Full of Fossil Fuels and Forever Chemicals. A Spectacular Year for 3 of the Magnificent 7. The Best ROI* (Almost 40%!) & 7 Life Hacks That Save Thousands. Portugal Eliminates Tax Advantages for Ex-Pats. WeWork's Bankruptcy. Half-Empty Office Buildings. Problems in our Personal Wealth Plan. Cruise Ships Give Freebies to Investors. Should You Take the Bait? Should You Take a Cruise? Bonds. Banks. The Treacherous Landscape of Keeping Our Money Safe. 7 Rules of Investing 13 Lifestyle Choices to Reduce Waste, Pollution & CO2 & Save a Boatload of Dough. China Bans Apple 11-Point Green Checklist for Schools. 10 Wealth Secrets of Billionaires and Royals. Bank of America has $100 Billion in Bond Losses (on Paper) Fiat. Crypto. Gold. BRICS. Real Estate. Alternative Investments. BRICS Currency. Will the Dollar Become Extinct? Are There Any Safe, Green Banks? 7 Ways to Stash Your Cash Now. Lessons from the Silicon Valley Bank Failure. Which Countries Offer the Highest Yield for the Lowest Risk? Why We Are Underweighting Banks and the Financial Industry. Save Thousands Annually With Smarter Energy Choices Is Your FDIC-Insured Cash Really Safe? Money Market Funds, FDIC, SIPC: Are Any of Them Safe? My 24-Year-Old is Itching to Buy a Condo. Should I Help Him? The 12-Step Guide to Successful Investing. The Bank Bail-in Plan on Your Dime. Important Disclaimers Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience. Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument.
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 Charitable Giving Ideas Tis the season of giving and receiving. If we are confused as to just where to start, the best route is to follow our heart. Another important tip is to commit not only our money, but also our time and talent. If money is in limited supply, don’t underestimate how valuable showing up with a helping hand is. Although giving is its own reward, you might be surprised at how our charitable acts benefit us personally. As I often say, the life of my dreams was launched through my charitable giving projects. I met the women who would help me launch the Women’s Investment Network when I was the chairman of the silent auction for my son’s school. We raised over $35,000 for music, instruments, technology and computers, which were funded by the Booster Club. When you are passionate about helping, giving your time, talent and money, you’ll find yourself surrounded by your people. That is a fertile place to be. Charity is the best networking. The Earth Gratitude project was launched after two decades of my personal commitment to researching and highlighting inspiring sustainability projects from around the world. It’s a win-win. I enjoy learning about the solutions, and I’m grateful to have a platform where others can discover sustainability best practices, too. We have a free 5-part docuseries on 1) Kids, 2) Animals and Conservation, 3) Food & Soil Health, 4) Everyday Sustainability, 5) The Power of Gratitude. Go to https://earthgratitude.org/ to check them out!  Below are a few ideas for your charitable giving, including the one that is closest to my heart, the Earth Gratitude project. The Earth Gratitude Project Inspiring sustainability solutions from around the world. Is sustainability as close to your heart? Why not team up with us to produce, create and distribute a short documentary on the great and effective ways that each one of us can lead much greener lives. There is power in our habits and our consumption choices. Small changes can have a massive impact, especially if we’re all doing it. An added benefit is that a lot of these green choices save thousands of dollars annually in our own budget, while promoting greater physical and physical health. Email [email protected] with Earth Gratitude in the subject line to start the conversation. Other great organizations to consider donating to. The New Hollywood. This is the passion project of our Earth Gratitude spokesperson Brianna Brown Keen. One of their projects is a partnership with Harvest Home, where they provide training and resources for formerly homeless single moms to start on the path to financial freedom. https://www.thenewhollywood.org/ The Ron Finley Project. Ron Finley believes that growing your own food is like printing your own money. He offers all kinds of resources for backyard and community gardening. Ron started his journey in his own backyard, which is a food desert. https://ronfinley.com/  Kiss The Ground. Soil health has many benefits for humanity, including being the most powerful tool for carbon sequestration. Regenerative agriculture takes organic farming one step further. It’s a great way to conserve water, preserve topsoil, promote animal husbandry and welfare, and produce nutrient-dense food. One formally conventional farmer is saving millions of dollars each year by moving out of toxic chemicals and fertilizers, and into working with nature to solve the challenges of cultivation. You can learn more about Kiss the Ground and regenerative agriculture in Brianna Brown’s interview with farmer Gabe Brown, the star of the Common Ground film. (Click to access.) https://kisstheground.com/ The Edible Schoolyard Project Decades ago, Alice Waters installed a student garden in a public middle school in Berkeley, California. That led to developing the necessary school curriculum to support hands-on, outdoor learning by students. When I toured the school a few years ago, a 12-year-old student farmer led me around. I asked her what her favorite thing to cook and eat was, to which she responded, “kale pesto.“ Imagine my surprise! What middle schooler would say kale pesto instead of French fries? If you are interested in student gardens at your own child’s school, this is a great resource. And if you want to promote healthier food at schools, this is a great movement to donate to. https://edibleschoolyard.org/ Wildlife Direct If protecting iconic animals such as elephants, giraffes, and rhinos are important to you, then consider supporting the vital work of Wildlife Direct. This is a continuation of Dr. Richard Leakey’s important work in Africa. Dr. Paula Kahumbu is the current CEO. Their work includes animal sanctuaries, education of locals, and immersion camps for children to learn how to understand, support and conserve the environment and the iconic animals that are native to the great country of Africa. Wildlife Direct also partners with major media organizations to raise awareness around the world. Be sure to check out Nat Geo’s Secrets of the Elephants. https://wildlifedirect.org/ H.M. Queen Diambi H.M. Queen Diambi is active in supporting her people in the Democratic Republic of Congo and, also in promoting sustainability solutions (which are vital to her people, who suffer from climate change, water scarcity and plastic pollution).  As you can see from the above picture of H.M. Queen Diambi at the 2024 Daytime Emmys, where a docu drama she was featured in won 4 awards, her dresses are gorgeous. They are also made by local DRC artisans from only natural fiber materials. Whether you wish to help Queen Diambi expand her clothing line, or install wells and schools in the Democratic Republic of Congo, consider donating to Queen Diambi’s Elikia Hope foundation. https://www.theelikiahopefoundation.org/ https://www.queendiambi.com/ Pachamama Alliance Pachamama Alliance began out of a partnership with the Achuar people of the Ecuadorian Amazon to support their work to keep their land and culture intact. They offer courses and retreats that are designed to shift the global north from consumption, exploitation, and extraction to one that honors and sustains all life. If you care about protecting the rainforests, then donating to the natives who are living in the Amazon and protecting nature on behalf of all of us is a great use of funds. https://pachamama.org/ EARTHDAY.org EARTHDAY.org leaders created Earth Day on April 22, 1970. They are the largest environmental organization in the world, and have been mobilizing over 1 billion people annually on Earth Day and every other day to protect the planet. This organization is a continuous source of information, inspiration and community action in the halls of Congress, on Main Street and on their social media platforms. https://www.earthday.org/ The Dillon Henry Foundation This is a foundation that is near and dear to my heart. Dillon Henry was my son‘s best friend, and my son is on the board. One of the most important things that the foundation is doing is the Peace School that they built in the Democratic Republic of Congo. In addition to educating the locals, they also build wells to provide water. https://dillonslist.org/ Bottom Line The holiday season is when our heart grows three times its normal size. Whatever your passion is concentrate your efforts on one project that you believe is doing the most to help the situation. When we combine our time and talent with our money, we increase the value of the contribution by three times. Join us at our online New Year, New Me Financial Freedom Retreat Jan. 10-12, 2025 (online) and our Rebalancing Masterclass (Capture Gains & Protect Principal) on Jan. 18, 2025. If you'd like a life-changing adventure of a lifetime, be our guest at a royal manor house in Cornwall, England, March 7-14, 2025. Only one room is still available. Call 310-430-2397 or email [email protected] to learn more. Learn how to: * Invest in hot industries, such as Nvidia and artificial intelligence, * Hedge against a weaker dollar, * Invest and compound your gains, * Green your retirement plan, * Easy and efficacious nest egg strategies, * Get hot and diversified (including in artificial intelligence and EVs), * Evaluate stocks, * Keep an age-appropriate amount safe, and, * Know what's safe in a Debt World. You'll even discover how to save thousands annually with smarter big-ticket choices. Yes, it's a complete money makeover. Email [email protected] or call 310-430-2397 to learn more and register. Learn the 15+ things you'll master and read testimonials in the flyer on the home page at NataliePace.com. Register with friends and family to receive the best price. "Ten minutes into the first day I was already much smarter about investing than I ever thought I would be in my life and I knew I was in exactly the right place at this retreat. I am amazed at how EASY and FUN it is to make my money work for me and those I love. I think this kind of information should be compulsory in schools. I wish I'd learned this sooner." CM If you’d like an unbiased 2nd opinion on your current wealth plan, email [email protected] for pricing and information.  Join us for our Online New Year, New You Financial Freedom Retreat Jan. 10-12, 2025. Email [email protected] or call 310-430-2397 to learn more. Register with friends and family to receive the best price. Click for testimonials, pricing, hours & details.  Join us for our Restormel Royal Immersive Adventure Retreat. March 7-14, 2025. Email [email protected] to learn more. Click for testimonials, pricing, hours & details. Register now. There is only 1 room available. This retreat includes an all-access pass to all of our online training for a full year for two, and three 50-minute private, prosperity coaching sessions. Much more affordable than you might think. Email [email protected] to learn more.  Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. Natalie is the bestselling author of The ABCs of Money and The Power of 8 Billion: It's Up to Us, and is the co-creator of the Earth Gratitude Project. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). Her book The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 6th edition of The ABCs of Money and the 2nd edition of Put Your Money Where Your Heart Is are the most recent releases of these books. Follow her on Instagram. Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden. Check out Natalie Pace's Substack podcast on Apple and Spotify. Watch videoconferences and webinars on Youtube. Other Blogs of Interest The DJIA Plunged 1100 Points After the Dec. 2024 FOMC Meeting. Why Are So Many Safe Investments Losing Money? A Bargain-Priced AI Company. Canadian, Australian and U.S. Banks. Are Any of Them Safe? Ireland. Rich in Technology, Biotechnology and Agribusiness. Black Friday and Cyber Monday Sweepstakes. Robo Investing and AI. No, They are Not Foolproof. Stocks Soar as Nvidia Joins the DJIA. Copper. Peru ETF Outperforms the S&P500. 4 Ways to Celebrate World Sustainability Day, Oct. 30, 2024. Will There be a Santa Rally or will the Election Ruin Everything? The Chips are Down. ASML, Intel and Super Micro Computer Plunge. Is Nvidia Next. Will Insurance Companies & Homeowners Weather the Hurricanes? 9 Money Secrets of the Ultra Wealthy. Housing & Budgeting Solutions. Will Boeing Be Booted Out of the Dow Jones Industrial Average? Arkansas Sues Temu for Data Theft. We Must Be the Boss of Our Money. Why? Oil Prices Tumble. Why? Sweepstakes for the Release of The ABCs of Money. 6th Edition. Should You Go Conservative or Aggressive? Fast Fashion. Fossil Fuels. Plastic Clothing. Atacama Desert Waste Dumps. Can Crowdstrike Recover from its Colossal Catastrophe? Featuring a Cybersecurity Overview. Fintechs and Brokerages that Fail are Not FDIC-Insured. Stocks Keep Hitting New Highs. Are You Thinking "Capture Gains?" 5 Green Tips for Clean Beaches Week. Nio Sales Expected to More Than Double in 2Q 2024. So, You Think You Want to Be a B&B Owner... Retiring Soon? Start Planning Now. 2024 Rebalancing IQ Test. Answers to the 2024 Rebalancing IQ Test. May is National Bike Month. Paris and Amsterdam are the Stars. Vacations that Color Our World Forever. 9 Inflation, Budgeting, Debt Reduction and Investing Solutions. China & Russia Double Their Gold Holdings. 2024 Investment of the Year? Bitcoin Sets a New Record High. The Importance of Rebalancing. Uh. Oh. More Bank Trouble. Housing. Unaffordable. What Works? Case studies and creative solutions. 2024 Investor IQ Test. Answers to the 2024 Investor IQ Test. The Underperforming DJIA, Full of Fossil Fuels and Forever Chemicals. A Spectacular Year for 3 of the Magnificent 7. The Best ROI* (Almost 40%!) & 7 Life Hacks That Save Thousands. Portugal Eliminates Tax Advantages for Ex-Pats. WeWork's Bankruptcy. Half-Empty Office Buildings. Problems in our Personal Wealth Plan. Cruise Ships Give Freebies to Investors. Should You Take the Bait? Should You Take a Cruise? Bonds. Banks. The Treacherous Landscape of Keeping Our Money Safe. 7 Rules of Investing 13 Lifestyle Choices to Reduce Waste, Pollution & CO2 & Save a Boatload of Dough. China Bans Apple 11-Point Green Checklist for Schools. 10 Wealth Secrets of Billionaires and Royals. Bank of America has $100 Billion in Bond Losses (on Paper) Fiat. Crypto. Gold. BRICS. Real Estate. Alternative Investments. BRICS Currency. Will the Dollar Become Extinct? Are There Any Safe, Green Banks? 7 Ways to Stash Your Cash Now. Lessons from the Silicon Valley Bank Failure. Which Countries Offer the Highest Yield for the Lowest Risk? Why We Are Underweighting Banks and the Financial Industry. Save Thousands Annually With Smarter Energy Choices Is Your FDIC-Insured Cash Really Safe? Money Market Funds, FDIC, SIPC: Are Any of Them Safe? My 24-Year-Old is Itching to Buy a Condo. Should I Help Him? The 12-Step Guide to Successful Investing. The Bank Bail-in Plan on Your Dime. Important Disclaimers Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience. Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Sec  Source: MSN.com. The DJIA is still trading near an all-time high (as of 12.19.2024). (c) Microsoft. Used with permission. The Dow Plunged over 1100 Points After the FOMC Meeting. What does that signal for 2025? Why are we starting to hear about an “overdue market correction?” Will it actually happen? Wall Street wasn’t happy after the FOMC Meeting on Dec. 18, 2024. Thursday, Dec. 19, broke the 9-day Dow Jones Industrial Average losing streak by the slimmest of margins (+0.04%). The DJIA is down 6% from the high of 45,074, set on Dec. 4, 2024. What caused stocks to drop? What should we do, if anything, to protect our wealth from another drop? Is this a temporary setback, or is an overdue market correction waiting in the wings of 2025? Here are the factors we’ll cover in this blog. Why the Negative Market Reaction to the Dec. 18, 2024, FOMC Meeting? Don’t Panic! Prepare. Rebalancing is Key How Will Tariffs Affect the Economy And here is more information on each point. Why the Negative Market Reaction to the Dec. 18, 2024, FOMC Meeting? On Dec. 18, 2024, we learned that inflation is moving “sideways” instead of down. As a result of the economy remaining strong and inflation staying sticky, the expectation for further rate cuts in 2025 was trimmed from a full percentage point in 2025 to half that. That offers little help for anyone hopeful to purchase a home at a lower interest rate, for corporations, car purchasers, credit card payments, or for those struggling half-empty office buildings and malls. There’s a lot of debt that needs to be paid off or refinanced, so stubbornly high(ish) interest rates are negative for growth, for consumer spending (almost 70% of the GDP tally) and for the economy. It’s not just the $36.2 trillion public debt that we all hear about that is the problem. Consumer and corporate debt and loans are also alarmingly high. The total of U.S. debt and loans is at $99 trillion. Email [email protected] if you’d like an updated Debt and Asset Bubble Chart. This isn’t a dire warning, however. The economy is expected to slow down to 2.1% in 2025 from 2.5% this year. That is still growth (not a recession). Is it enough growth to support the already lofty stock prices? After 2 years where the S&P500 simply soared (+26.3% in 2023 and +23.7% in 2024 so far), can stocks continue at this pace? The 10-year average return for large caps was just 12%. So, the S&P500 has far outperformed of late. Incidentally, the DJIA returns for 2023 and 2024 were just and 13.7% and 12.2%, respectively (half that of the larger index). Which index you own matters! So what should you do? Don’t Panic! Prepare. When the DJIA is underperforming the S&P500, there’s an easy way to lean into performance. When stocks drop, we have a plan for that – before it happens. It’s why we: · Adopt a diversified, age-appropriate plan, · Rebalance 1-3 times a year, · Overweight an additional amount safe, · Dollar cost average into any new fund that is at or near an all-time high. This time-proven plan earned gains in the Great Recession and the Dot Com Recession and outperformed the bull markets in between. It’s as easy as a pie chart. The plan protects us from market drops, while allowing us to benefit from stocks soaring. Just like a well-built house, once we set our financial home up properly, we move in and spring clean once a year. It’s not a day trading strategy. It’s the life math we all should have received in high school and college. Rebalancing is Key Late December and early January are great times to do an annual review of our wealth plan to make sure that it is age appropriate and properly protected and diversified. Yesterday’s sell-off is just a reminder of how important it is to adopt a time-proven 21st Century plan instead of gambling that good times will continue forever. You can read about this easy strategy in the 6th edition of The ABCs of Money. You can learn and implement it at our January 10-12 Financial Freedom Retreat. Or you can get an unbiased 2nd opinion in our private coaching program. Email [email protected] to learn more and register now. How Will Tariffs Affect the Economy According to the CBO, the proposed tariffs would have “upward pressure” on inflation. (Some FOMC participants factored this into their economic projections.) The tariffs could also decrease GDP by 0.6%. Inflation could prompt the Feds to increase interest rates, while a weak or stalled economy would prompt them to cut. Clearly these two scenarios put the FOMC in a bit of a pickle. We’ll have to see which seems the most pressing in real time as the 2025 government fiscal policies are put into play. Bottom Line The Summary of Economic Projections are not set in stone, as we saw by how much they changed yesterday, compared to the Sept. 2024 projections. There are a lot of moving parts that will affect things either positively or negatively – including, potentially, continued strength in the Magnificent 7 and AI, and the potential negative effects of tariffs, elevated equity prices, a weak real estate market, half-empty office buildings and malls, and astronomical debt. There are high expectations for the breakthrough technology, artificial intelligence, and Magnificent 7 companies. However, the good news is already priced in. Investors are not fans of uncertainty, particularly when prices are so high, which is why the markets reacted so swiftly and severely. Wall Street experienced extraordinary gains in 2023 and 2024 (if you purchased the right index). However, we have seen some heartbreaking reversals of fortune multiple times in the 21st Century. Stocks sank in the pandemic, losing over 35% in just one month. That is why it’s important to fix the roof while the sun is still shining. With Wall Street still very high, now is a perfect time to capture gains and keep that money, instead of just waiting and seeing whether an overdue market correction of -10% or more happens. Join us at our online New Year, New Me Financial Freedom Retreat Jan. 10-12, 2025 (online) and our Rebalancing Masterclass (Capture Gains & Protect Principal) on Jan. 18, 2025. Learn how to: * Invest in hot industries, such as Nvidia and artificial intelligence, * Hedge against a weaker dollar, * Invest and compound your gains, * Green your retirement plan, * Easy and efficacious nest egg strategies, * Get hot and diversified (including in artificial intelligence and EVs), * Evaluate stocks, * Keep an age-appropriate amount safe, and, * Know what's safe in a Debt World. You'll even discover how to save thousands annually with smarter big-ticket choices. Yes, it's a complete money makeover. Email [email protected] or call 310-430-2397 to learn more and register. Learn the 15+ things you'll master and read testimonials in the flyer on the home page at NataliePace.com. Register with friends and family to receive the best price. "Ten minutes into the first day I was already much smarter about investing than I ever thought I would be in my life and I knew I was in exactly the right place at this retreat. I am amazed at how EASY and FUN it is to make my money work for me and those I love. I think this kind of information should be compulsory in schools. I wish I'd learned this sooner." CM If you’d like an unbiased 2nd opinion on your current wealth plan, email [email protected] for pricing and information.  Join us for our Online New Year, New You Financial Freedom Retreat Jan. 10-12, 2025. Email [email protected] or call 310-430-2397 to learn more. Register with friends and family to receive the best price. Click for testimonials, pricing, hours & details.  Join us for our Restormel Royal Immersive Adventure Retreat. March 7-14, 2025. Email [email protected] to learn more. Click for testimonials, pricing, hours & details. Register now. There is only 1 room available. This retreat includes an all-access pass to all of our online training for a full year for two, and three 50-minute private, prosperity coaching sessions. Much more affordable than you might think. Email [email protected] to learn more.  Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. Natalie is the bestselling author of The ABCs of Money and The Power of 8 Billion: It's Up to Us, and is the co-creator of the Earth Gratitude Project. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). Her book The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 6th edition of The ABCs of Money and the 2nd edition of Put Your Money Where Your Heart Is are the most recent releases of these books. Follow her on Instagram. Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden. Check out Natalie Pace's Substack podcast on Apple and Spotify. Watch videoconferences and webinars on Youtube. Other Blogs of Interest Why Are So Many Safe Investments Losing Money? A Bargain-Priced AI Company. Canadian, Australian and U.S. Banks. Are Any of Them Safe? Ireland. Rich in Technology, Biotechnology and Agribusiness. Black Friday and Cyber Monday Sweepstakes. Robo Investing and AI. No, They are Not Foolproof. Stocks Soar as Nvidia Joins the DJIA. Copper. Peru ETF Outperforms the S&P500. 4 Ways to Celebrate World Sustainability Day, Oct. 30, 2024. Will There be a Santa Rally or will the Election Ruin Everything? The Chips are Down. ASML, Intel and Super Micro Computer Plunge. Is Nvidia Next. Will Insurance Companies & Homeowners Weather the Hurricanes? 9 Money Secrets of the Ultra Wealthy. Housing & Budgeting Solutions. Will Boeing Be Booted Out of the Dow Jones Industrial Average? Arkansas Sues Temu for Data Theft. We Must Be the Boss of Our Money. Why? Oil Prices Tumble. Why? Sweepstakes for the Release of The ABCs of Money. 6th Edition. Should You Go Conservative or Aggressive? Fast Fashion. Fossil Fuels. Plastic Clothing. Atacama Desert Waste Dumps. Can Crowdstrike Recover from its Colossal Catastrophe? Featuring a Cybersecurity Overview. Fintechs and Brokerages that Fail are Not FDIC-Insured. Stocks Keep Hitting New Highs. Are You Thinking "Capture Gains?" 5 Green Tips for Clean Beaches Week. Nio Sales Expected to More Than Double in 2Q 2024. So, You Think You Want to Be a B&B Owner... Retiring Soon? Start Planning Now. 2024 Rebalancing IQ Test. Answers to the 2024 Rebalancing IQ Test. May is National Bike Month. Paris and Amsterdam are the Stars. Vacations that Color Our World Forever. 9 Inflation, Budgeting, Debt Reduction and Investing Solutions. China & Russia Double Their Gold Holdings. 2024 Investment of the Year? Bitcoin Sets a New Record High. The Importance of Rebalancing. Uh. Oh. More Bank Trouble. Housing. Unaffordable. What Works? Case studies and creative solutions. 2024 Investor IQ Test. Answers to the 2024 Investor IQ Test. The Underperforming DJIA, Full of Fossil Fuels and Forever Chemicals. A Spectacular Year for 3 of the Magnificent 7. The Best ROI* (Almost 40%!) & 7 Life Hacks That Save Thousands. Portugal Eliminates Tax Advantages for Ex-Pats. WeWork's Bankruptcy. Half-Empty Office Buildings. Problems in our Personal Wealth Plan. Cruise Ships Give Freebies to Investors. Should You Take the Bait? Should You Take a Cruise? Bonds. Banks. The Treacherous Landscape of Keeping Our Money Safe. 7 Rules of Investing 13 Lifestyle Choices to Reduce Waste, Pollution & CO2 & Save a Boatload of Dough. China Bans Apple 11-Point Green Checklist for Schools. 10 Wealth Secrets of Billionaires and Royals. Bank of America has $100 Billion in Bond Losses (on Paper) Fiat. Crypto. Gold. BRICS. Real Estate. Alternative Investments. BRICS Currency. Will the Dollar Become Extinct? Are There Any Safe, Green Banks? 7 Ways to Stash Your Cash Now. Lessons from the Silicon Valley Bank Failure. Which Countries Offer the Highest Yield for the Lowest Risk? Why We Are Underweighting Banks and the Financial Industry. Save Thousands Annually With Smarter Energy Choices Is Your FDIC-Insured Cash Really Safe? Money Market Funds, FDIC, SIPC: Are Any of Them Safe? My 24-Year-Old is Itching to Buy a Condo. Should I Help Him? The 12-Step Guide to Successful Investing. The Bank Bail-in Plan on Your Dime. Important Disclaimers Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience. Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.  This is a Facebook AI-generated image. Why Are so Many “Safe” Investments Losing Money? Some are considered to be legit but have fine print that can lose you a great deal the minute you buy them. Some are outright fraud. Billions are purloined each year, often to people who just want to earn some income without losing money. The words “safe” and “income-producing” are used to entrap so many (as are get-rich-quick schemes). So, what are some of the common conservative money pits? Here are the things we’ll cover in this blog and an upcoming videoconference, scheduled for Thursday, Dec. 26, 2024. Email [email protected] if you’d like to join us live. 1. Annuities We lose up to 9% of our investment the minute we buy them. 2. Income-Producing REITs A couple was told they own the property and were earning over 10% in interest. Instead, they lost $18,000. 3. Bonds and Bond Funds Long-term bonds lost more than stocks did in 2022. Bond funds are losers over the 5-year period. 4. Dividend-Paying Stocks The higher the dividend, the higher the risk. When dividends get cut, share prices plunge. 5. Safe Havens Safe havens are the most volatile investments we can own. 6. Crypto Scams. Crypto scams cost Americans $5.6 billion last year. And here is more information on each point. Annuities While we all heard about the five banks that failed in 2023, we haven’t heard a peep about the four insurance companies that went bankrupt in 2023 and 2024 (or the two additional banks that failed in 2024). 40 insurance companies have become insolvent since 2000. If we hadn’t bailed out AIG and the industry in 2008 that list would be substantially longer. Would anyone have any faith in insurance at all? However, the potential for insolvency and the fact that annuities are not FDIC-insured are not the only reasons why annuities and other insurance products are riskier than we are being told. They are sold to us as safe – as guaranteed from losses. However, how many of us know that we lose up to 9% of our investment the minute we purchase an annuity? They call it a surrender fee. (That’s not the only fee that we might be subject to.) We tie up our money for 5-15 years, for typically a below-market return, and lose money if we need access to the investment before the lockup ends. If we were thinking about purchasing a 5–15-year Certificate of Deposit, we’d probably think twice about whether we might want or need access to that money. How many annuity purchasers are truly aware of what they’re signing up for, and how much commission the broker-salesman is making (up to 8%)? The November 2024 Financial Stability Report echoes those warnings, writing, “Exposure to illiquid and risky assets makes life insurers vulnerable to an array of adverse shocks, including that of an economic downturn or of a significant further deterioration of the CRE market” (source: Federal Reserve Board). All of those half-empty office buildings and vacant malls are a serious challenge, particularly for insurance companies. Insurance company bankruptcies are not rampant. However, with debt at an all-time high, the commercial real estate market in a crisis and life insurance companies at the center of those storms, the years ahead might look a lot different than the past. As you can see in the chart below, debt in all forms is substantially higher than it was in the financial crisis of 2008, when AIG (the largest insurer in the world) had to be bailed out.  2. Income-Producing REITs A good salesman will lure us in with the bait that we are most likely to swallow. If we’re nervous about stocks, then they might start talking about how important it is to earn income and that you can do it safely by owning real estate. Real estate investment trusts are not like owning real estate. You own stock in the company that owns the real estate. If the company goes bankrupt, you don’t get the real estate. What you get is a big fat loss on the money you gave them. A couple called me about the REITs that they had been told were a very secure, stable investment, which were paying high-yield interest rates. (You have to wonder why the company is willing to pay you 10+% when creditworthy companies can borrow from the capital markets at a much lower rate.) We were able to discover that these companies had been cash negative for over five years. The couple ultimately ended up losing $18,000 that they really couldn’t afford to lose. Meanwhile, the salesman who sold them this lie likely earned a commission of $15,000 or more. You can read about this couple’s journey in their own words in the blog, “They Trusted Him, Now He Doesn’t Return Phone Calls.” Bonds and Bond Funds Long-term bonds lost even more than stocks did in 2022. They did not make up those losses in 2023.   Even though interest rates are expected to go down over the next two years, that doesn’t mean that the problems or “paper” losses will disappear. There is still elevated credit, liquidity and duration risk. In addition to the losses, we could get stuck with an asset that no one wants to take off our hands. That paper loss can become permanent for a multitude of reasons. Our net worth plunges, as does our credit score. Getting safe in today’s debt world is tricky, which is why we spend one full day on this topic in our Financial Freedom Retreat. There can be a lot of pressure on broker-salesmen to sell us things that are not necessarily good for our fiscal health. Bond funds are not any better. As you can see in the chart below, they have lost money over the 5-year period. Again, bonds are supposed to be the safe side of our portfolio where our principal investment remains intact. In addition to the liquidity, credit and duration risks, there is an added challenge that investment grade bond funds can have up to 20% junk bonds and very sketchy mortgage-backed securities in them.  Source: MSN.com. (c) Microsoft. Used with permission. Dividend-Paying Stocks The higher the dividend, the higher the risk. When dividends get cut, share prices plunge. We’ve seen this with General Electric, Boeing, banks during the pandemic, and with quite a number of commercial real estate companies. In the worst-case scenario, you have what I discussed in the REITs part of this blog, where the couple lost $18,000. Over half of the S&P500 is at or near junk bond status. That includes a lot of U.S. banks and financial services companies.  At our retreats (and in my books), we have been underweighting U.S. value funds (where a lot of the dividend-paying stocks are) and instead diversifying into other countries. There are some countries that offer higher credit ratings than the U.S. and a higher yield as well. Join us at our January 10-12, 2025 Financial Freedom Retreat. Email [email protected] to learn more and register now. Safe Havens Safe Havens are the most volatile investments we can own. When they are hot, nothing beats them. When they sink, nobody wants them. This includes crypto and gold. After the extreme highs in 1980, gold plunged and stayed there for a quarter of a century. After the top in 2011 ($1895), gold prices sank by 40%. They didn’t come back until the pandemic. Additionally, each time that Bitcoin soars to new highs, it then drops like a knife. The whales take their profits before Main Street investors can protect themselves. Crypto is not an HODL investment. The average holding time of Bitcoin is just 100 days, while Ethereum is held for under two months (45 days). The other issue with safe havens is that they tend to be sold to us as “the only thing that will be of value when the dollar becomes worthless.” So many of us treat them like a buy-and-hold product, when we would be better served to have a strategy for capturing gains at the high and purchasing more at the low. Our pie chart investing system makes this easy. When prices soar, the pie chart prompts us to capture gains at the high. When prices sink, we have the liquidity and emotional fortitude to buy more at a lower price. The challenges of safe havens don’t mean that we should not invest in these industries. They can add performance if we know how to be on the right side of the trade. In fact, I named Bitcoin as the Investment of the Year back in March 2024. Since then, coin values have surged by 57%. Of course, whenever an asset gets hot, the fraudsters come out of the woodwork. Crypto Scams Cost Americans $5.6 billion Last Year There are so many ways we can be taken in by scams. We might be promised shoot-the-moon gains. A relative might tell us about all the money they’ve made on something, which might be an MLM scam that they haven’t done the proper due diligence on. We might even see a celebrity endorsing the investment. FTX had A-list brand ambassadors and Kim Kardashian hocked an EthereumMax crypto scam. Another hallmark of a ruse is to show you extraordinary gains on a fictitious statement. Making something look legitimate is not difficult. So, how can you avoid getting taken in? Check out my FTX blog, where I outline 6 red flags to avoid. Join me for my What’s Safe videoconference, which is scheduled for December 26th at 4 pm PT. Email [email protected] if you’d like to join us live. You can watch all of my interviews and videoconferences back at https://www.youtube.com/nataliepace. Bottom Line It’s embarrassing and painful to lose money. For some, it’s too much to bear. (I talk about this in the introduction of The ABCs of Money 6th edition.) We don’t want to be immobilized by our slipups. Mistakes allow us to learn and make better choices going forward, so that we will not be fooled again. Learning the life math that we all should have received in high school is a great start. Informed investors aren’t taken in by sophisticated sales tactics. An additional benefit to our time-proven strategies is that you’ll learn how to adopt a Thrive Budget, which allows us to live a richer life, even in an inflationary world that doesn’t add up. We can save thousands annually with smarter big-ticket choices. When we feel empowered, we’re less likely to fall for the too-good-to-be-true, get-rich-quick scams. Read about these time-proven strategies in my books or learn and implement them at our Financial Freedom Retreats. Join us at our online New Year, New Me Financial Freedom Retreat Jan. 10-12, 2025 (online) and our Rebalancing Masterclass (Capture Gains & Protect Principal) on Jan. 18, 2025. Learn how to: * Invest in hot industries, such as Nvidia and artificial intelligence, * Hedge against a weaker dollar, * Invest and compound your gains, * Green your retirement plan, * Easy and efficacious nest egg strategies, * Get hot and diversified (including in artificial intelligence and EVs), * Evaluate stocks, * Keep an age-appropriate amount safe, and, * Know what's safe in a Debt World. You'll even discover how to save thousands annually with smarter big-ticket choices. Yes, it's a complete money makeover. Email [email protected] or call 310-430-2397 to learn more and register. Learn the 15+ things you'll master and read testimonials in the flyer on the home page at NataliePace.com. Register with friends and family to receive the best price. "Ten minutes into the first day I was already much smarter about investing than I ever thought I would be in my life and I knew I was in exactly the right place at this retreat. I am amazed at how EASY and FUN it is to make my money work for me and those I love. I think this kind of information should be compulsory in schools. I wish I'd learned this sooner." CM If you’d like an unbiased 2nd opinion on your current wealth plan, email [email protected] for pricing and information.  Join us for our Online New Year, New You Financial Freedom Retreat Jan. 10-12, 2025. Email [email protected] or call 310-430-2397 to learn more. Register with friends and family to receive the best price. Click for testimonials, pricing, hours & details.  Join us for our Restormel Royal Immersive Adventure Retreat. March 7-14, 2025. Email [email protected] to learn more. Click for testimonials, pricing, hours & details. Register now. There is only 1 room available. This retreat includes an all-access pass to all of our online training for a full year for two, and three 50-minute private, prosperity coaching sessions. Much more affordable than you might think. Email [email protected] to learn more.  Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. Natalie is the bestselling author of The ABCs of Money and The Power of 8 Billion: It's Up to Us, and is the co-creator of the Earth Gratitude Project. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). Her book The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 6th edition of The ABCs of Money and the 2nd edition of Put Your Money Where Your Heart Is are the most recent releases of these books. Follow her on Instagram. Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden. Check out Natalie Pace's Substack podcast on Apple and Spotify. Watch videoconferences and webinars on Youtube. Other Blogs of Interest A Bargain-Priced AI Company. Canadian, Australian and U.S. Banks. Are Any of Them Safe? Ireland. Rich in Technology, Biotechnology and Agribusiness. Black Friday and Cyber Monday Sweepstakes. Robo Investing and AI. No, They are Not Foolproof. Stocks Soar as Nvidia Joins the DJIA. Copper. Peru ETF Outperforms the S&P500. 4 Ways to Celebrate World Sustainability Day, Oct. 30, 2024. Will There be a Santa Rally or will the Election Ruin Everything? The Chips are Down. ASML, Intel and Super Micro Computer Plunge. Is Nvidia Next. Will Insurance Companies & Homeowners Weather the Hurricanes? 9 Money Secrets of the Ultra Wealthy. Housing & Budgeting Solutions. Will Boeing Be Booted Out of the Dow Jones Industrial Average? Arkansas Sues Temu for Data Theft. We Must Be the Boss of Our Money. Why? Oil Prices Tumble. Why? Sweepstakes for the Release of The ABCs of Money. 6th Edition. Should You Go Conservative or Aggressive? Fast Fashion. Fossil Fuels. Plastic Clothing. Atacama Desert Waste Dumps. Can Crowdstrike Recover from its Colossal Catastrophe? Featuring a Cybersecurity Overview. Fintechs and Brokerages that Fail are Not FDIC-Insured. Stocks Keep Hitting New Highs. Are You Thinking "Capture Gains?" 5 Green Tips for Clean Beaches Week. Nio Sales Expected to More Than Double in 2Q 2024. So, You Think You Want to Be a B&B Owner... Retiring Soon? Start Planning Now. 2024 Rebalancing IQ Test. Answers to the 2024 Rebalancing IQ Test. May is National Bike Month. Paris and Amsterdam are the Stars. Vacations that Color Our World Forever. 9 Inflation, Budgeting, Debt Reduction and Investing Solutions. China & Russia Double Their Gold Holdings. 2024 Investment of the Year? Bitcoin Sets a New Record High. The Importance of Rebalancing. Uh. Oh. More Bank Trouble. Housing. Unaffordable. What Works? Case studies and creative solutions. 2024 Investor IQ Test. Answers to the 2024 Investor IQ Test. The Underperforming DJIA, Full of Fossil Fuels and Forever Chemicals. A Spectacular Year for 3 of the Magnificent 7. The Best ROI* (Almost 40%!) & 7 Life Hacks That Save Thousands. Portugal Eliminates Tax Advantages for Ex-Pats. WeWork's Bankruptcy. Half-Empty Office Buildings. Problems in our Personal Wealth Plan. Cruise Ships Give Freebies to Investors. Should You Take the Bait? Should You Take a Cruise? Bonds. Banks. The Treacherous Landscape of Keeping Our Money Safe. 7 Rules of Investing 13 Lifestyle Choices to Reduce Waste, Pollution & CO2 & Save a Boatload of Dough. China Bans Apple 11-Point Green Checklist for Schools. 10 Wealth Secrets of Billionaires and Royals. Bank of America has $100 Billion in Bond Losses (on Paper) Fiat. Crypto. Gold. BRICS. Real Estate. Alternative Investments. BRICS Currency. Will the Dollar Become Extinct? Are There Any Safe, Green Banks? 7 Ways to Stash Your Cash Now. Lessons from the Silicon Valley Bank Failure. Which Countries Offer the Highest Yield for the Lowest Risk? Why We Are Underweighting Banks and the Financial Industry. Save Thousands Annually With Smarter Energy Choices Is Your FDIC-Insured Cash Really Safe? Money Market Funds, FDIC, SIPC: Are Any of Them Safe? My 24-Year-Old is Itching to Buy a Condo. Should I Help Him? The 12-Step Guide to Successful Investing. The Bank Bail-in Plan on Your Dime. Important Disclaimers Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience. Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.  An AI image of Christmas on the moon, in the style of anime. A Bargain-Priced Artificial Intelligence Company. Artificial intelligence has been the hottest thing on Wall Street for the past few years. Most of the companies are trading at very expensive prices. Nvidia is up ten-fold over the past two years. However, there is one very high growth artificial intelligence company that is trading at a discount of 67% off the highs set in March of this year. Why did investors give up on the company? Were they wrong? Here are the things we’ll cover in this blog. The Hottest AI Growth Stock Hindenburg Research’s Accusations A Special Independent Committee’s Report Super Hot and a Super Bargain? Why Feb. 25, 2025, is an Important Date Tariffs, China and National Security The Nvidia of Servers Reducing Risk with AI ETFs And here is more information on each topic The Hottest AI Growth Stock Super Micro Computer shows up as the clear leader on our Artificial Intelligence Stock Report Card, with year-over-year revenue growth of 143%. (If you’d like an updated AI Stock Report Card, email [email protected].) The company forecasts that next year’s revenue could double over fiscal 2024. The September quarter grew 150% from last year, to $5.31 billion, while the December 2024 quarter is expected to bring in net sales of $5.5 - $6.1 billion, an increase of 67% annually. Hindenburg Research’s Accounting Manipulation Accusation on 8.27.2024 Hindenburg Research, a notorious short seller, accused Super Micro Computer of accounting manipulation on August 27, 2024. A month later, on September 26, 2024, The Wall Street Journal reported that the U.S. Justice Department was looking into the accusations. As a result, between mid-August and mid-November, the Super Micro Computer share price dropped by more than half – and was down 85% from the high of $123/share set on March 8, 2024. Incidentally, anyone who purchased at the low of November 15 ($17/share) has doubled their money since then. On Sept. 16, 2024, Icahn Enterprises celebrated the dismissal of a class action lawsuit that had been based upon alleged “false and misleading reports published by Hindenburg.” So, other companies have successfully argued against Hindenburg’s “research.” A Special Independent Committee’s Report On December 2, 2024, Super Micro Computer released a press release, writing that the Special Committee found no evidence of misconduct by the company. The expectation is that there will be no restatement of reported financials. SMCI’s stock has been rallying since November 15, 2024. However, it is still down about 67% from the March high. Super Hot and a Super Bargain? So, is Super Micro Computer super hot and a great buy? If the forward outlook turns out to be accurate, then absolutely. The price/earnings ratio is 20, which is low for such a high growth company. As I mentioned above, 2025 revenue is expected to double over 2024. Of course, the proof is in the pudding. We’ve got to see those earnings reports in order to believe them. That is likely why Super Micro Computer’s share price is still trading at a bargain, even though the Independent Special Committee has cleared them of wrongdoing. Investors are also waiting to hear from the Department of Justice. A lot of Super Micro Computer’s troubles stem from a lawsuit by Bob Luong, a former employee and whistleblower. It’s become a bit of a drama because it has been reported that Super Micro Computer fired Luong for bullying people who reported to him, and for skipping meetings, yelling, cursing, and routinely being absent from work. There can be a lot of money made by being a whistleblower and by short selling stock. Somebody placed a very large put order on Super Micro Computer in July. More will likely be revealed over the coming months in this matter. However, being cleared by the Independent Committee and delivering outstanding earnings reports are positive omens. Why Feb. 25, 2025, is an Important Date The NASDAQ Stock Market has granted a request by Super Micro Computer to file its annual earnings report by February 25, 2025. If the 10-K filing is indeed just an official documentation of what has already been reported as an outstanding fiscal year 2024 with $14.94 billion in net sales (more than double what it was in 2023), investors should get very excited. The December 2024 quarter results should be announced at the end of January. Tariffs, China and National Security Artificial intelligence is a highly protected industry. There are restrictions on what can be shared with certain countries, particularly China and Russia. As a result of trade restrictions, one of Super Micro Computer’s partners, Nvidia, has seen their Chinese revenue drop from 22% last year to 15.4% in the most recent quarter. Silicon Valley partners are more than making up for the weakness in Asia, accounting for half of Nvidia’s revenue. Super Micro Computer, Nvidia and many other technology companies use Taiwanese factories to build their products. Given the geopolitical risks, and China’s aggressive moves to bring Taiwan closer to its authority, this is a threat that all investors should be aware of. An invasion of Taiwan would mean all the chips are down. However, even without an invasion, the war of words between Washington and Beijing is raging. America is threatening China with tariffs. China is restricting exports of certain rare earth minerals. The Chinese are investigating Nvidia for Antitrust violations. China is also suspected of being behind targeted cyberattacks on Super Micro Computer that occurred in 2015 and 2018. The Nvidia of Servers Super Micro Computer has been called the Nvidia of servers. At the 2024 Computex, Super Micro Computer CEO Charles Liang was joined by Nvidia CEO Jensen Huang on stage for the keynote. (Click to check out that video.) It’s a positive sign when a $24 billion company is a partner of a $3 trillion company in the world’s hottest industry. Reducing Risk with AI ETFs The volatility of Super Micro Computer’s share price illustrates the risk of investing in individual companies. The reticence of people to buy low, even after the company has been cleared of misconduct by an independent committee, is further evidence that our emotions often work against us. When we wait for the headlines, it’s too late to invest. Nvidia is proof of that. If we buy Nvidia today, we are purchasing a company that is valued at $3 trillion with only $30 billion in net income. Nvidia‘s price/earnings ratio is a very lofty 55. Yet, this is the company that everybody wants to invest in – purchasing for a price that is 10 times what it was two years ago (buying high). Purchasing a targeted Artificial Intelligence ETF is one way to reduce risk and potentially increase performance of our nest egg. Nvidia and Super Micro Computer are two of the top holdings in the iShares Future AI and Tech ETF: symbol ARTY. The ARTY ETF is trading at a two-year high. So, dollar cost averaging in might be a good strategy for adding an AI ETF to our wealth plan. Bottom Line Super Micro Computer is very popular with its partners and its customers. However, a disgruntled employee and a short seller have certainly had their impact on the company’s share price. (Still waiting to hear from the DOJ.) It appears that the worst of it might be behind them. There is always a possibility of the Department of Justice finding some merit to Luong‘s claims that the Independent Committee overlooked. However, if SMCI’s troubles are behind them, a $40 price is a great deal, particularly when most AI companies are trading at multiples that are double or triple where SMCI is currently. Full disclosure: I own shares of Super Micro Computer.  Join us for our Online New Year, New You Financial Freedom Retreat Jan. 10-12, 2025. Email [email protected] or call 310-430-2397 to learn more. Register with friends and family to receive the best price. Click for testimonials, pricing, hours & details.  Join us for our Restormel Royal Immersive Adventure Retreat. March 7-14, 2025. Email [email protected] to learn more. Click for testimonials, pricing, hours & details. Register now. There is only 1 room available. This retreat includes an all-access pass to all of our online training for a full year for two, and three 50-minute private, prosperity coaching sessions. Much more affordable than you might think. Email [email protected] to learn more.  Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. Natalie is the bestselling author of The ABCs of Money and The Power of 8 Billion: It's Up to Us, and is the co-creator of the Earth Gratitude Project. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). Her book The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 6th edition of The ABCs of Money and the 2nd edition of Put Your Money Where Your Heart Is are the most recent releases of these books. Follow her on Instagram. Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden. Check out Natalie Pace's Substack podcast on Apple and Spotify. Watch videoconferences and webinars on Youtube. Other Blogs of Interest Canadian, Australian and U.S. Banks. Are Any of Them Safe? Ireland. Rich in Technology, Biotechnology and Agribusiness. Black Friday and Cyber Monday Sweepstakes. Robo Investing and AI. No, They are Not Foolproof. Stocks Soar as Nvidia Joins the DJIA. Copper. Peru ETF Outperforms the S&P500. 4 Ways to Celebrate World Sustainability Day, Oct. 30, 2024. Will There be a Santa Rally or will the Election Ruin Everything? The Chips are Down. ASML, Intel and Super Micro Computer Plunge. Is Nvidia Next. Will Insurance Companies & Homeowners Weather the Hurricanes? 9 Money Secrets of the Ultra Wealthy. Housing & Budgeting Solutions. Will Boeing Be Booted Out of the Dow Jones Industrial Average? Arkansas Sues Temu for Data Theft. We Must Be the Boss of Our Money. Why? Oil Prices Tumble. Why? Sweepstakes for the Release of The ABCs of Money. 6th Edition. Should You Go Conservative or Aggressive? Fast Fashion. Fossil Fuels. Plastic Clothing. Atacama Desert Waste Dumps. Can Crowdstrike Recover from its Colossal Catastrophe? Featuring a Cybersecurity Overview. Fintechs and Brokerages that Fail are Not FDIC-Insured. Stocks Keep Hitting New Highs. Are You Thinking "Capture Gains?" 5 Green Tips for Clean Beaches Week. Nio Sales Expected to More Than Double in 2Q 2024. So, You Think You Want to Be a B&B Owner... Retiring Soon? Start Planning Now. 2024 Rebalancing IQ Test. Answers to the 2024 Rebalancing IQ Test. May is National Bike Month. Paris and Amsterdam are the Stars. Vacations that Color Our World Forever. 9 Inflation, Budgeting, Debt Reduction and Investing Solutions. China & Russia Double Their Gold Holdings. 2024 Investment of the Year? Bitcoin Sets a New Record High. The Importance of Rebalancing. Uh. Oh. More Bank Trouble. Housing. Unaffordable. What Works? Case studies and creative solutions. 2024 Investor IQ Test. Answers to the 2024 Investor IQ Test. The Underperforming DJIA, Full of Fossil Fuels and Forever Chemicals. A Spectacular Year for 3 of the Magnificent 7. The Best ROI* (Almost 40%!) & 7 Life Hacks That Save Thousands. Portugal Eliminates Tax Advantages for Ex-Pats. WeWork's Bankruptcy. Half-Empty Office Buildings. Problems in our Personal Wealth Plan. Cruise Ships Give Freebies to Investors. Should You Take the Bait? Should You Take a Cruise? Bonds. Banks. The Treacherous Landscape of Keeping Our Money Safe. 7 Rules of Investing 13 Lifestyle Choices to Reduce Waste, Pollution & CO2 & Save a Boatload of Dough. China Bans Apple 11-Point Green Checklist for Schools. 10 Wealth Secrets of Billionaires and Royals. Bank of America has $100 Billion in Bond Losses (on Paper) Fiat. Crypto. Gold. BRICS. Real Estate. Alternative Investments. BRICS Currency. Will the Dollar Become Extinct? Are There Any Safe, Green Banks? 7 Ways to Stash Your Cash Now. Lessons from the Silicon Valley Bank Failure. Which Countries Offer the Highest Yield for the Lowest Risk? Why We Are Underweighting Banks and the Financial Industry. Save Thousands Annually With Smarter Energy Choices Is Your FDIC-Insured Cash Really Safe? Money Market Funds, FDIC, SIPC: Are Any of Them Safe? My 24-Year-Old is Itching to Buy a Condo. Should I Help Him? The 12-Step Guide to Successful Investing. The Bank Bail-in Plan on Your Dime. Important Disclaimers Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience. Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.  Canadian, Australian and U.S. Banks. Are Any of Them Safe? Why Are We Still Underweighting U.S. Financials? Reading the earnings reports of banks and financial services companies is about as easy as deciphering hieroglyphics. This is intentional. However, the consequences of such opacity for Main Street investors are that bank failures come without warning. That is why it is so important to read the tea leaves before the event (and yes, there are obvious signs in the cup). When we wait for the headlines, it’s too late to protect our wealth. We’ve been underweighting U.S. banks and financial companies in our Financial Freedom Retreats and in my books for years, with another blatant warning coming in our blog of Feb. 10, 2023. The epic bank failures of Silicon Valley Bank and Signature Bank began a month after that blog, in March 2023. There were five bank failures in 2023 and two in 2024. Is the trouble over, or are there still phantoms in the wings of this industry, including insurance companies, brokerages, fintechs and credit unions? Why are we still underweighting U.S. financials, and how do you do that in your retirement and investing accounts? How can we divest of this industry and protect our cash? Is there a better income-producing alternative? The good news is that we can reduce risk, increase yield and add diversification in a carefully crafted plan. Here are the things we’ll cover in this blog. Credit Ratings and Leverage Australian & Canadian Banks Half-Empty Office Buildings and Long-Term Bonds New York Community Bank and First Citizens Bancshares Household Debt Financial Stability Report Underweighting U.S. Financials (Continuing for Many Years Now) When the U.S. Sneezes, the World Catches a Cold The Trouble with Cash And here is more information on each point. Credit Ratings and Leverage As you can see in the chart below, there are a lot of U.S. banks that are at the lowest rung of investment grade (BBB). While there are some U.S. banks that are rated A, it‘s important to remember that First Republic Bank was downgraded from A- (investment grade) to BB+ (junk) by Fitch Ratings and S&P Global on March 15, 2023, without prior warning. The bank ultimately failed and was taken over by J.P. Morgan Chase & Co. on May 1, 2023. AAA is the highest rating and BBB is the lowest investment grade before junk status (BB, B, CCC and below).  Australian & Canadian Banks Many Australian and Canadian banks have a higher credit quality than U.S. banks, according to S&P Global. Both Fitch Ratings and S&P Global give Australia an AAA sovereign credit rating. Canada is rated AAA by S&P Global and AA+ by Fitch Ratings. AA+ is the credit rating Fitch and S&P Global have for the U.S. If you’re interested in an updated Bank Stock Report Card, email [email protected] with Bank SRC in the subject line. In addition to having higher credit ratings, Australian banks pay a higher yield than U.S. banks. Australia’s Westpac Bank (AA- credit rating) offers a 4.54% yield. By comparison, Goldman Sachs (BBB+) pays 2.01% yield, while Wells Fargo & Co. (also BBB+) distributes a 2.17% yield. First Citizens Bancshares (the bank that swallowed up Silicon Valley Bank) has a BBB rating with a negative outlook and rewards that risk with just 0.36% yield to investors. Canadian banks also offer generous dividends. TD Bank is currently paying 5.67%, while the Bank of Montreal has a yield of 4.35%. In the case of TD Bank, the yield jumped when the share price tanked on news of a $3.1 billion settlement and admission of guilt by the bank of failing to prevent money laundering. In one example, authorities said, “TD Bank facilitated over $400 million in transactions to launder funds on behalf of people selling fentanyl and other deadly drugs.” TD is Canada's second biggest bank and the 10th largest in the U.S. The small payout at TD Bank does not offset the almost -20% decline in share price. Canada and Australia were historically more prudent in terms of risk in the banking system than the U.S. “Australia and Canada were the only advanced G20 countries not to provide a government injection of funds to the banking system” during the financial crisis of 2008 (source: U.S. Treasury). However, we have seen more risk taking and expansionary policy at Canadian banks over the past decade. Half-Empty Office Buildings and Long-Term Bonds Paper losses on long-term, low-yielding bonds and T-Bills (which many Main Street investors have in their wealth plan) are at the heart of the failures of banks over the last few years. Interest rates are expected to go down, which will help a little. However, there remains an elevated problem with credit risk and duration risk. For this reason, we spend one full day at our Financial Freedom Retreats learning how to protect the safe side of our portfolio from losses. It is also why we’ve been warning against long-term bonds since the Great Recession. If you’ve walked around your neighborhood, you’ve probably noticed a lot of office space available for lease. Some malls and projects put up attractive advertising to divert the eye, but behind the façade lies a money pit. According to the Nov. 14, 2024 Global Banking Outlook report by S&P Global, “Large property sectors remain pressured, particularly the U.S. office market and residential sales in China. Real estate stress poses challenges especially to U.S. regional banks and the smaller Chinese lenders.” (FYI: We’re underweighting China due to geopolitical risks and the lack of investor appetite for Chinese equities.) Commercial real estate (empty buildings) is the bugaboo of many developed world economies, including Canada and Australia. Despite high vacancy rates, CRE prices haven’t yet tumbled. According to the Nov. 22, 2024 Financial Stability Report of the Federal Reserve Board, the reason for this is that “rather than realizing losses, many owners wait for more favorable conditions to put their properties on the market.” Regional banks are more exposed, with fewer resources to mitigate the risk of CRE. This risk can also be passed onto Main Street retirement plans in the form of bond and value funds. This is why it is so key to be an informed investor, rather than having blind faith that someone is protecting our wealth for us. We might have a lot of banks in our wealth plan if we don’t take action to underweight this industry. New York Community Bank and First Citizens Bancshares New York Community Bank (now Flagstar Financial, Inc.) took over Signature Bank when it failed in March of 2023. In January of 2024, the company slashed their dividend from $0.17/share to $0.05/share. On June 7, 2024, the dividend plunged again to just $0.01/share. Revenue has dropped by -40% year over year, investors have lost -72% in share price from the August 2023 high, and the company value is a mere $4.74 billion. The company must try to stay afloat amidst the New York City CRE crisis. Clearly the leaders think a name change (removing New York) will help. However, it won’t fill empty office building space or put revenue back on the books. First Citizens Bancshares absorbed Silicon Valley Bank. Share prices almost doubled when the bank rescued SVB and are up more than four-fold from where they traded prior to March 27, 2023 (the day of the merger). However, S&P Global has the bank rated at BBB with a negative outlook. As mentioned above, the dividend is pretty small for the risk. Household Debt Consumer debt is at an all-time high, and Americans have burned through all of the pandemic stimulus money. The personal savings rate (amount left over after paying bills) is at a historic low. With consumers driving about 68% of the economy, this is another problematic area that economists will monitor. If consumption pulls back, the economy will slow. Financial Stability Report The Federal Reserve’s Nov. 2024 Financial Stability Report revealed that insurance companies are another area of alarm. According to the report, “Life insurers continued to allocate a substantial percentage of assets to risky and less liquid instruments.” As a reminder, insurance companies and their products are not FDIC-insured. AIG was the biggest bailout in history. Broker-dealer leverage continued to be low, while hedge fund leverage was at an all-time high. Underweighting U.S. Financials (Continuing for Many Years Now) We’ve been underweighting U.S. financials for years due to the massive amount of leverage and low credit quality of many U.S. banks and financial services companies. The CRE and mortgage-backed securities markets are negatives with the potential to be the toxic tipping point of the economy. CRE has the potential to be a problem in Australia and Canada, too. However, the rating agencies have greater faith in the Aussie banks to weather the storm. When the U.S. Sneezes, the World Catches a Cold All equities (stocks, funds) have risk, even when we diversify into an AAA-rated country like Australia. China was once the world’s star of growth and performance and has been an underperformer since the highs of February 2021. That’s why it is important to have an age-appropriate plan, with the proper amount of our wealth protected from losses. This is tricky because bonds lost even more than stocks in 2022 and haven’t made those losses up. Again, the safe side of our plan is not supposed to go down in value, not even in “paper losses,” which are more problematic than our broker-salesman might be revealing. Our strategy avoided the paper losses of the past few years, earned gains in the recessions and outperformed the bull markets in between. It’s as easy as a pie chart with annual rebalancing. The sooner you learn and implement it, the better off you will be now and going into the future. The Trouble with Cash Not only does cash give us zero return on investment, stashing it carries many risks. Under our mattress and it might be stolen, even as it loses buying power. Credit unions, brokerages and crypto exchanges are not FDIC-insured, even if they tell us they have a cash sweep program. Uninsured deposits are not guaranteed at an FDIC-insured bank. Many places don’t accept cash anymore, as the world has embraced digital payments. Finally, safe havens, such as crypto and gold, are volatile. We treat these assets as hot slices, rather than safe havens. I encourage you to read the What’s Safe sections of The ABCs of Money, 6th edition, and the blogs below. Fintechs and Brokerages that Fail are Not FDIC Insured. Lessons from the Failure of Silicon Valley Bank Is Your FDIC-Insured Cash Safe? Better Double-Check. Money Market Funds, FDIC & SIPC. Are Any of Them Safe? Bottom Line Opting for an Australian value fund offers less risk and more reward than the low credit quality, bank-heavy U.S. value funds. This will likely not be offered in your employer-sponsored retirement account, which is why it’s a great idea to have your own Individual Retirement Account, in addition to whatever your employer offers. For most of us, our wealth plan will be composed of a few different accounts, with each offering a different piece of the pie. With Wall Street at an all-time high, it’s a great idea to dollar-cost-average into any new fund, while also using our age-appropriate diversified nest egg. These strategies are taught in my books, retreats and in my private coaching. Email [email protected] to get started now. FYI: During the bank failures of 2023, the FDIC-insurance did kick in, even (in a special event) for the uninsured deposits of Silicon Valley Bank – something that is not expected to be repeated. Many of us are also invested in banks and toxic mortgage-backed securities and commercial real estate bonds in our retirement accounts, mutual funds, ETFs and insurance plans. So, it’s important to go beyond the deposit slip and understand how to underweight financials in our wealth plan. Join us at our online New Year, New Me Financial Freedom Retreat Jan. 10-12, 2025 (online) and our Rebalancing Masterclass (Capture Gains & Protect Principal) on Jan. 18, 2025. Learn how to: * Invest in hot industries, such as Nvidia and artificial intelligence, * Hedge against a weaker dollar, * Invest and compound your gains, * Green your retirement plan, * Easy and efficacious nest egg strategies, * Get hot and diversified (including in artificial intelligence and EVs), * Evaluate stocks, * Keep an age-appropriate amount safe, and, * Know what's safe in a Debt World. You'll even discover how to save thousands annually with smarter big-ticket choices. Yes, it's a complete money makeover. Email [email protected] or call 310-430-2397 to learn more and register. Learn the 15+ things you'll master and read testimonials in the flyer on the home page at NataliePace.com. Register with friends and family to receive the best price. "Ten minutes into the first day I was already much smarter about investing than I ever thought I would be in my life and I knew I was in exactly the right place at this retreat. I am amazed at how EASY and FUN it is to make my money work for me and those I love. I think this kind of information should be compulsory in schools. I wish I'd learned this sooner." CM If you’d like an unbiased 2nd opinion on your current wealth plan, email [email protected] for pricing and information.  Join us for our Online New Year, New You Financial Freedom Retreat Jan. 10-12, 2025. Email [email protected] or call 310-430-2397 to learn more. Register with friends and family to receive the best price. Click for testimonials, pricing, hours & details.  Join us for our Restormel Royal Immersive Adventure Retreat. March 7-14, 2025. Email [email protected] to learn more. Click for testimonials, pricing, hours & details. Register now. There is only 1 room available. This retreat includes an all-access pass to all of our online training for a full year for two, and three 50-minute private, prosperity coaching sessions. Much more affordable than you might think. Email [email protected] to learn more.  Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. Natalie is the bestselling author of The ABCs of Money and The Power of 8 Billion: It's Up to Us, and is the co-creator of the Earth Gratitude Project. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). Her book The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 6th edition of The ABCs of Money and the 2nd edition of Put Your Money Where Your Heart Is are the most recent releases of these books. Follow her on Instagram. Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden. Check out Natalie Pace's Substack podcast on Apple and Spotify. Watch videoconferences and webinars on Youtube. Other Blogs of Interest Ireland. Rich in Technology, Biotechnology and Agribusiness. Black Friday and Cyber Monday Sweepstakes. Robo Investing and AI. No, They are Not Foolproof. Stocks Soar as Nvidia Joins the DJIA. Copper. Peru ETF Outperforms the S&P500. 4 Ways to Celebrate World Sustainability Day, Oct. 30, 2024. Will There be a Santa Rally or will the Election Ruin Everything? The Chips are Down. ASML, Intel and Super Micro Computer Plunge. Is Nvidia Next. Will Insurance Companies & Homeowners Weather the Hurricanes? 9 Money Secrets of the Ultra Wealthy. Housing & Budgeting Solutions. Will Boeing Be Booted Out of the Dow Jones Industrial Average? Arkansas Sues Temu for Data Theft. We Must Be the Boss of Our Money. Why? Oil Prices Tumble. Why? Sweepstakes for the Release of The ABCs of Money. 6th Edition. Should You Go Conservative or Aggressive? Fast Fashion. Fossil Fuels. Plastic Clothing. Atacama Desert Waste Dumps. Can Crowdstrike Recover from its Colossal Catastrophe? Featuring a Cybersecurity Overview. Fintechs and Brokerages that Fail are Not FDIC-Insured. Stocks Keep Hitting New Highs. Are You Thinking "Capture Gains?" 5 Green Tips for Clean Beaches Week. Nio Sales Expected to More Than Double in 2Q 2024. So, You Think You Want to Be a B&B Owner... Retiring Soon? Start Planning Now. 2024 Rebalancing IQ Test. Answers to the 2024 Rebalancing IQ Test. May is National Bike Month. Paris and Amsterdam are the Stars. Vacations that Color Our World Forever. 9 Inflation, Budgeting, Debt Reduction and Investing Solutions. China & Russia Double Their Gold Holdings. 2024 Investment of the Year? Bitcoin Sets a New Record High. The Importance of Rebalancing. Uh. Oh. More Bank Trouble. Housing. Unaffordable. What Works? Case studies and creative solutions. 2024 Investor IQ Test. Answers to the 2024 Investor IQ Test. The Underperforming DJIA, Full of Fossil Fuels and Forever Chemicals. A Spectacular Year for 3 of the Magnificent 7. The Best ROI* (Almost 40%!) & 7 Life Hacks That Save Thousands. Portugal Eliminates Tax Advantages for Ex-Pats. WeWork's Bankruptcy. Half-Empty Office Buildings. Problems in our Personal Wealth Plan. Cruise Ships Give Freebies to Investors. Should You Take the Bait? Should You Take a Cruise? Bonds. Banks. The Treacherous Landscape of Keeping Our Money Safe. 7 Rules of Investing 13 Lifestyle Choices to Reduce Waste, Pollution & CO2 & Save a Boatload of Dough. China Bans Apple 11-Point Green Checklist for Schools. 10 Wealth Secrets of Billionaires and Royals. Bank of America has $100 Billion in Bond Losses (on Paper) Fiat. Crypto. Gold. BRICS. Real Estate. Alternative Investments. BRICS Currency. Will the Dollar Become Extinct? Are There Any Safe, Green Banks? 7 Ways to Stash Your Cash Now. Lessons from the Silicon Valley Bank Failure. Which Countries Offer the Highest Yield for the Lowest Risk? Why We Are Underweighting Banks and the Financial Industry. Save Thousands Annually With Smarter Energy Choices Is Your FDIC-Insured Cash Really Safe? Money Market Funds, FDIC, SIPC: Are Any of Them Safe? My 24-Year-Old is Itching to Buy a Condo. Should I Help Him? The 12-Step Guide to Successful Investing. The Bank Bail-in Plan on Your Dime. Important Disclaimers Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience. Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors. |
AuthorNatalie Pace is the co-creator of the Earth Gratitude Project and the author of The Power of 8 Billion: It's Up to Us, The ABCs of Money, The ABCs of Money for College, The Gratitude Game and Put Your Money Where Your Heart Is. She is a repeat guest & speaker on national news shows and stages. She has been ranked the No. 1 stock picker, above over 830 A-list pundits, by an independent tracking agency, and has been saving homes and nest eggs since 1999. Archives
January 2025
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