Should The Omicron Variant Be A Concern For Investors?

While Americans were celebrating the Thanksgiving Holiday, the rest of the world dealt with the newest Covid-19 variant. The Omicron variant of coronavirus, first identified in South Africa, has been reportedly spreading in parts of Europe for days before it was identified in southern Africa.

On December 1st, the first confirmed US case of Omicron coronavirus variant was detected in California. In a White House news briefing, Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said the case was in an individual who traveled from South Africa on November 22 and tested positive for Covid-19 on November 29.

As of the end of November, the variant was already found in 20 countries, and governments around the world were already implementing lockdowns and travel restrictions.

These decisions where being driven by the fact that the Omicron variant was substantially different. With about 50 mutations from the original coronavirus, which started the pandemic, and about 30 mutations compared to even the highly contagious delta variant that has swept around the world. However, scientists don't know if the variant is actually more contagious or more deadly than any previous variants.

Many have been calling this an overaction, while others say the lockdowns and travel restrictions are adequate steps to protect others. Regardless these are difficult decisions for the politicians, and there will inevitably be those talking heads on the T.V. bashing the leaders regardless of their decisions. Part of this circus helps build fear and anxiety in most people, leading to fear and anxiety within the stock market.

The worst single day for the U.S. stock market in 2021 was Friday, November 25, the day following Thanksgiving, a shortened trading day, and of course, the day after the world found out about the new Omicron variant. The following few trading days were similarly volatile, with the market bouncing higher and then lower, despite any new real tangible information about the true nature and danger of the Omicron variant being known.

So, should this new variant be a real concern to investors? Continue reading "Should The Omicron Variant Be A Concern For Investors?"

Earnings Calendar For December 2021

The year is winding down, and that means companies will take a little breather from announcing earnings.

Nonetheless, December is front-loaded with earnings announcements which means there are still some big opportunities on the horizon for traders who know how to find big earnings plays.

Most Anticipated Earnings For December 2021

Below are some of the most anticipated scheduled earnings announcements for December Continue reading "Earnings Calendar For December 2021"

Are You Concerned About Inflation?

Twitter and Square CEO Jack Dorsey is the most vocal and alarming figure in the finance world who is not just raising the alarms on the potential coming inflation issues but is banging bells and yelling from the towers about the possible coming problem.

Dorsey said in a tweet, "Hyperinflation is going to change everything. It's happening." When replying to another tweet about inflation, he went further to say, "It will happen in the U.S. soon, and so the world."

While there have been other big-name investors, bank c-suite members, Federal Reserve members, and even the Treasury Secretary indicate that inflation will happen. Some have even said it is a little higher than what they expected. However, not many have said Hyperinflation was coming and would happen soon in the U.S. and then the world.

While some have and will continue to dismiss Dorsey's claims, we all need to remember that he is the CEO of Square, the payment company. So theoretically, Dorsey has access to information that others may not have, which could give him a better insight into how fast prices are increasing and what products are seeing big increases, which would undoubtedly help guide the thinking that higher than expected inflation is on its way. (Just a thought). Continue reading "Are You Concerned About Inflation?"

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Navigating Volatility: Options-Based Portfolio

Introduction

Controlling portfolio volatility is essential as the broader markets continue to break record high after record high along with violent pullbacks. The past three-month stretch of September-November was a prime example as the markets pushed to new all-time highs early in September then suffered a significant sell-off in the same month where the Dow Jones was down as much as 6%. October saw a bounce back into positive territory with new all-time highs set. Then November saw a dichotomy between the Nasdaq continuing to break out to new highs while the Dow Jones experienced significant weakness.

Amid this mixed market and broader index bifurcation, entire sectors were decimated. The payment space was heavily impacted with PayPal (PYPL) and Visa (V) taking huge market capitalization reductions by 37% and 21%, respectively. Quarterly reports have been detrimental for companies that report slight misses or in-line numbers with poor guidance. Disney (DIS) and International Business Machines Corporation (IBM) saw their stocks plummet 24% and 20%, respectively from their 52-week highs. An options-based portfolio can offer mitigation against these pockets of extreme volatility while generating consistent and smoother returns.

Options-Based Risk Mitigation

Risk mitigation can be achieved via a blended options-based approach where the portfolio is broken out into three components. Cash, long equity exposure, and an options component are the three pillars of an options-based portfolio strategy. Options alone cannot be the sole driver of portfolio appreciation. However, options can play a critical component in the overall portfolio construction to control volatility and mitigate risk. Continue reading "Navigating Volatility: Options-Based Portfolio"