Guacamole, Money and Markets

Speaker A: Um, on the Express this week, Guacamole money and markets.

Speaker B: We get in the kitchen with Jess Inskip for a masterclass mashup. It's time for a mid year market report card.

Speaker A: Which sectors and stocks are making the grade?

Speaker B: Hey, we hold these truths to be self evident.

Speaker A: Financial education has never been more relevant. You want independence, investing, intelligence.

Speaker B: You're rocking with Investopedia. Fly, fresh and always relevant.

Speaker A: Welcome back and welcome aboard.

Speaker B: Uh, happy Monday. The Investopedia Express live and direct Every Monday at 10am Good to be with you. Good to have all those Investopedia listeners, followers and fans from all over the world checking in, tapping in with us on the Investopedia Express. We know you're out there. Chime on in. We'd love to hear from you. Good to hear from you, Bellanis. Good morning to you. Investopedia. Rocking with you. J.J. on the job. Let's go, J.J. good to see you. You are on the job. Nice, nice avocados, my friend. Guac city Bis. Let's rock this joint. We're going to make some guac today. We're going to mix it up in the kitchen. We head to the Time Inc. People Inc. Uh, kitchens right down the corner here for a little master class. But first, let's get into it. Short trading week this week, but a pretty important one. Final week of the second quarter, final week of the first half, and markets are in the green to get things started. The NASDAQ popping after three weeks of selling. Here we got oil futures back at around $70 per barrel on news of a ceasefire with Iran and a deal to finally open the Strait of Hormuz. Must be Monday. And stop me if you've heard this one before, that seems to be the pattern over the past few weeks. Uh, hostilities over the weekend. An agreement on Sunday night. Markets pop Monday morning. Then we get volatile throughout the rest of the week, and then we'll see what happens by the end of this week. But we are coming up on July 4, the 250th birthday of the United States of America. Lots of celebrations intended and planned. And let's go, America. And these high oil prices now coming down to $70 a barrel. I saw $3 handles on gasoline throughout New York and New Jersey over the weekend. That's kind of a big deal inside the stock market, my friends. Rotation nation. That again, the lifeblood of the market. And we've seen it. Take a look at some of these heat maps from our friends at Finviz here. Just the last week looked like this right the big tech stocks and the big AI stocks off the front burner there with Alphabet fallen more than 6 uh percent Nvidia down heavily. Broadcom down heavily. Apple, Microsoft, Apple. Even after uh, talking about raising its prices on a lot of its devices due to the fact that short these chips are getting more and more expensive. So you see that rotation, roll it back a month. This is kind of what we've seen over the past month. Big mega cap tech stocks and the AI trade falling off. But rotation into the other sectors. We've got healthcare making a 52 week high. We got small caps rising. Finally we got industrials popping a little bit. Caterpillar making an all time high here and the equal weight S&P 500 at an all time high especially relative to the S P500. Remember the S P500 is a market weighted indexes. The biggest stocks weigh the most. The nvidias of the world, the Microsofts, the apples of the world, the microns of the world. These stocks move the market because their market cap uh, is so big that as they go so goes the stock market. But when you look equal weight and you look at the other sectors that are starting to perform and a lot of those other stocks making 52 week or all time highs, they that's what you want to see. I know the market may have pulled back a few percentage points from all time highs. You need to see that rotation. You need to see balanced scoring like you do on a great NBA team and everyone playing their role here. That's what we're starting to see here. Even though there's plenty of concerns out there right now. But let's get into the first half of the year. Report card for the stock market and when you look at things in general we're up about seven and a half percent in the S&P 500 uh, bull market still intact uh heading into its fourth birthday uh later on this fall. The 200 day moving average, that's a key trend that technical analysts look at that is showing strength. It's getting higher and stronger every single week. You want to see that happening. Breadth broadening again. Sector rotation, not just big tech, not just AI trades, but you see other sectors starting to participate. That's that breath. We want to see the AI capex boom fully intact. These companies continue to spend like crazy and plan to keep spending like crazy because it's a zero sum game. They don't control computers, they don't control the audience for AI. They will lose out on the future. Strong earnings, strong Earnings across the boards pretty much. Not just in the big tech stocks and, and AI, but strong earnings for most companies right now. Uh, the consumer balance sheet looks pretty strong. Delinquencies are relatively low. They're starting to pop a little bit for credit cards and, and, and uh, and car loans and productivity gains. You're getting through AI plus investor sentiment, and this is a weird contrarian indicator, is pretty bearish. When you look at the CNN Fear and Greed index developed by uh, my buddy Paul Lamonica years ago at CNN money.com individual investors, retail investors are pretty close to extreme fear and we're only 3 percentage points away from all time highs and we've been averaging 15.6% annual gains for the past five to six years. Are you not entertained? Why are we so fearful? We're fearful because it feels a little bubbly out there. We're fearful because of all these m. Massive amounts of trillions of dollars being spent on building out AI. Yet there seems to be a little bit of a pushback certainly with younger people, people worried about the energy consumption. And you just see this return to brand, which is good news for Investopedia. But there is the sentiment. That's bearish. But when investors are bearish, usually sometimes it's a contrarian indicator. Usually, sometimes, most of the time a contrarian indicator. We'll see if that's the case. What about negatives? Well, the uptrend has been weakening. It's not like we've been pushing to new record highs over the past few weeks. In fact we've been bouncing around, in fact, lower for the S P500 last week and lower for the NASDAQ for the past three weeks. The mega caps are stumbling and they drive the market one way or the other. And as they go, so goes the stock market. But as I said, it's okay if they're stumbling, but the other sectors are starting to rally a little bit. That's what you want, AI obsolescence. Are we overbuilding this AI ecosystem when we don't even know what we're going to use it for? Well, we'll see about that. The AI costs are still there. You got a tighter Fed presumably depending on what happens with the labor market. We'll find out a little bit more about that later this week. You got inflation that doesn't seem to go away. Oil prices are coming down. You're gas prices will come down with them. But inflation for other things have gotten a lot higher, especially anything that involves technology. Semiconductor prices are super high. Compute prices are super high. And that's driving inflation in a whole nother category. Uh, so you're still getting inflation right now in the midterm elections. Always volatile. You remember our conversation with Jay woods last week? He said the one thing he's worried about is the midterms because nobody's paying a lot of attention to the disruption and what might happen through the midterm elections. And then you got those risks in private equity and private credit that are freaking people out. But when you look at things like the advanced decline line, these are just trend signals we like to look at at Investopedia. And intelligent investors like you and me should be paying attention to them. The advanced decline line looks pretty strong here. It's topping near all time highs here with more stocks advancing than declining. Uh, so so far, uh, in the past few weeks and really in the past year. And that's what you want to see in a, in a really strong bull market or one that still has legs. On the other hand, analysts are crazy optimistic, right? If you look at this great chart from Facts at here, nearly 60% of S&P 500 stocks now carry a buy rating from Wall street analysts, the highest level on record. And my friends, I was around in the 90s and there was a lot of buy ratings on stocks back then. Why does it matter? When everyone's expecting good news, there's less room for positive surprises. So if everyone's bullish except for individual investors because we're just paranoid, that's maybe not such a great sign. But you see more and more strategists raising their price targets for the s and P500. You see analysts putting more and more buy ratings on stocks. That tells you there's a lot of optimism in institutional money right now. And they don't always get it right. So we will see what plays out in the second half of the year. Well, folks, you may not know this, but I have a very special set of skills. Skills that make me an absolute must invite at any, any dinner party or social gathering where food is involved. I have a black belt in guacamole, and I learned and earned that distinction in the great New Mexican kitchens in Santa Fe, New Mexico, where I grew up. I'd spend my summers making industrial sized buckets of guacamole. I'm talking about stacked to the ceiling, 500 avocados making guacamole for 400 people a day at Thomasita's. And then I did a tableside at Gabriel's. And I freak people out with my skill set. But I am really good at that and again, makes me a must invite. So for me, food and finance, these things just go together. I grew up in the restaurant industry and then became a art major and then finally a business journalist. But food and finance and wine, you know, they all go really, really well together. So I invited my friend Jess Inskip over to our kitchen studios at People, Inc. Right down the hall for me for a little guacamole and money masterclass and a little game with of this or that. Let's head to the kitchen.

Speaker A: Jess, I invited you here to People, Inc. The headquarters of People Inc. Our brands at Investopedia, for a little guacamole and finance masterclass. But also play a little this or that. And I did the whiteboard for you because you are the whiteboard queen.

Speaker C: Oh, that's exciting. Are you going to say class is in session?

Speaker A: For my followers, class is in session. And, folks, you should start at the beginning if you haven't already started classes with Jess, one of the great financial educators out there. But, ah, guacamole is where I reign. I have a black belt in guacamole.

Speaker C: Oh.

Speaker A: Hone my trade in the kitchens of Santa Fe, New Mexico. But now that I'm, you know, the editor in chief of Investopedia and a business journalist, I think about metaphors with everything that I make and the market, because I can't help myself. So I'm going to show you what I do here, and let's talk markets. Let's talk about portfolio composition, if you will.

Speaker C: I'm here for it. The bar has now been set very high for the guacamole and the content.

Speaker A: Yeah. Well, when you think about, you know, what these different elements are good for? Chips or chips, Right? Chips. And you can't do anything without chips. I always say chips are the transports of the 21st century.

Speaker C: Oh, I like that.

Speaker A: Okay, so you got your chips here, Right. You got good avocados. And you know how to pick a good avocado at the supermarket, Right. Not just feeling it. There's that. But you want to look at the top where that little stem is.

Speaker B: Yeah.

Speaker A: You want to make sure it's yellow inside. And we're in good avocado season. But avocados are that base. I kind of think of them in my portfolio as my index funds.

Speaker B: Right?

Speaker A: Yeah.

Speaker C: Foundation. Okay.

Speaker A: No good avocado. No good base. No good index fund. No 10% average annual returns.

Speaker C: Yeah, that makes sense. You can't add anything else if you don't have that base. Because otherwise it's too much risk.

Speaker B: Too much risk.

Speaker C: Which would just be pico de gallo.

Speaker A: I suppose that would be pico. And pico de gallo is a derivative of the guacamole. If you pay close attention, you're right on it again. You know, you're right up investopedia's alley with this. But I keep my guacamole super simple. There's a lot of people out there that, you know, throw a little pineapple

Speaker B: in there, throw a little onion in

Speaker A: there, throw a little mango. Go for it. We just can't be friends. Just kidding. Make it the way you want, but this is the way I learned how to do it. So again, chips are our chips. Those are our semiconductors, our avocados. Good avocados. I think of those as the index funds, and I'm just having them and scooping them out. And how do you like your guac?

Speaker C: Um, I make sure it's creamy, but I do like a lot of flavor.

Speaker A: Okay. A lot of flavor. I agree with you. And I like it spicy. I like to feel it. But I'm also risk averse just because, you know, a little financial trauma. So I want to make sure that I can tolerate it and I'm not feeling it too much later and I can always come back.

Speaker C: Do you need help? I feel like I'm robo advising here. Auto investing for me.

Speaker A: I'm going to have you do some. I'm going to have you do some avocado chopping here. Yeah, this is robo investing, and I will take a fee for that and put you in a diversified class of, of, uh, ETFs. As long as I know your life goals. By the way, what are your life goals? You have a number in mind for when you want to retire, when that gives you the ability to maybe not retire, but maybe stop, uh, working so much for a paycheck.

Speaker C: You know, I just love financial literacy so much. I mean, one of my life goals is I want to be on a boat in Mallorca, uh, looking at the stock market all the time. But that would still be inclusive of me working in some way, shape, or form. I imagine I would be making the content on said boat in my orca.

Speaker A: Somehow I think that's in your future. I'll have you chop those up first. Just take a look. Ah, a knife and a fork. And watch your fingers. Just chop those up a little bit and I'll talk.

Speaker C: I would smush them. So I'm learning.

Speaker A: We're gonna come back there. That's the first step for me. And I usually have my actual pumice stone that I make guacamole in that I'm famous for, but that's a little heavy to carry around on the skateboard, so I decided not to do that today. We get a little chop there, and all I do is I take good tomatoes and I use the rinds only. So the tomato part of the portfolio for me, a little. The fruity part. I'm thinking, you know, maybe that could be some Fun stocks or ETFs and

Speaker B: sectors that I want to, uh, you

Speaker A: know, have some exposure to, but not too much. So think of those as maybe your Lulus or maybe your Nikes or some of your retail stocks or I like

Speaker C: it as sector ETFs, because this is our foundation. And I think if you don't know index funds just like now, I did not know to chop this, but you can kind of learn about the markets and your basics as you build your foundation. If you want exposure to another sector or maybe another stock, it's very important to have tomatoes. Sorry, I'm pointing at you with the knife.

Speaker A: That's dangerous. That's dangerous. But we're totally insured here at Peopling tomato rinds. Okay. Another sector fund here, of course, you got to have chopped garlic, finely chopped garlic, and any guacamole, really, in any food, period. Right?

Speaker C: Garlic's, yeah.

Speaker A: And the garlic's the spicier. And this is. I would get maybe my biotechs, you know.

Speaker C: Okay, well, cleansing. Yeah, that works.

Speaker A: Good for the heart.

Speaker C: That makes sense.

Speaker A: That's your garlic here, then, uh, cilantro. Not everybody's cup of tea, but I hope you don't have that soap issue when you taste cilantro.

Speaker C: Oh, no, I love cilantro. It's important.

Speaker A: I don't know what is it with people with that. But cilantro, a little bit of an exotic spice here. So maybe that's my emerging funds, okay?

Speaker C: My emerging markets, which is important. Uh, especially as of lately, they've been performing. As soon as, you know, the Strait of Hormuz closed down, that affect the emerging markets more. And that's why we had this rotation. It was very interesting.

Speaker A: That's right. Sector rotation, country rotation. Lifeblood of the markets here. So we know that it's been, uh, uh, especially South American markets have been super strong this year. So do a little bit of that. And then you, uh, know the jalapeno. And we've gone back and forth on this. What's your feeling on Jalapeno.

Speaker C: You know, I feel like this might be your risk and we're adding alpha to the portfolio. So beating the benchmark here. And it is a risk tolerance, if you will.

Speaker A: I love that.

Speaker C: And there's a tolerance that you have for spice, um, so for anything with high beta, so it moves more than the market does. You're subject to volatility. Right.

Speaker A: Perfect.

Speaker C: Yeah. There you go.

Speaker A: I'll take a little bit of that. And I like a little spicier. I am getting a little bit old and a little bit cautious about my portfolio, but what the heck, why not?

Speaker C: You need some growth potential.

Speaker A: The next, the world champion. So add as much as you want. I'm going to leave a little bit of extra. I'll show you why the derivative of

Speaker B: this is where it gets really interesting.

Speaker A: So a little jalapeno, some garlic, most of it. But again, I'm going to save just a little bit on the back end there. Again, maybe that's wealth preservation tactic. I don't know.

Speaker C: I like that. That's good.

Speaker A: Maybe. Maybe it's a.

Speaker C: Maybe have multiple brokerage firms or something.

Speaker B: Sure.

Speaker A: Or maybe it's Those fixed income ETFs that the market so badly wants me to have. My tomato, my rinds. Let's save a little bit of extra there. And it's kind of just looking beautiful right now.

Speaker C: It is very pretty.

Speaker A: A little mosaic portfolio for me. Yeah. And then. And then for me it's. This is the secret here. This is the lime. This is the. This is where the real alpha comes from.

Speaker B: Fresh lime.

Speaker A: And lime is one of those things. I don't know about you.

Speaker B: I like to have them around the

Speaker A: house because they actually make me feel wealthy.

Speaker C: Oh, I love limes.

Speaker B: Yes.

Speaker C: I like them in my Diet Coke. I'm one of those addicted to Diet Coke.

Speaker B: I love that call.

Speaker A: But. Well, when you have limes in the house, for me, it signifies that something good's about to happen. Guac is about to happen. Maybe a margarita is about to happen. I like that. Maybe a fruit salad. That's it.

Speaker C: Oh, wait, hold on. So we. This is your. This is the extra research method. This is the extra research it with a fork. And then we squeeze. I've never did that before.

Speaker A: And a little bit of a squeeze. There's really no seeds in limes these days.

Speaker C: So is it true you have to roll it before some people do?

Speaker A: I checked. That one didn't need rolling. That was a nice firm lime. And then salt. Again, this is about, you know, how much you can handle. Are you a savory investor? Are you a sweet investor?

Speaker C: I, uh, mean, you know, I like sweet and savory, to be honest.

Speaker A: All right, this could be the perfect portfolio for you. I love that. The All Weather portfolio or the All Guac portfolio. I put a little bit on there. Super simple ingredients. I'll go back to a little bit of a chop chop here.

Speaker C: Wow.

Speaker A: Because you say you like it smooth, and I used to do this tableside Gabriel's restaurant, Santa Fe, New Mexico. That's where I honed my trade. And now I'm known around the world as a black belt.

Speaker C: A black belt Guacamole.

Speaker B: Wow.

Speaker C: That's amazing.

Speaker A: I'm, uh, mixing metaphors here, but that's

Speaker C: just how we roll, I think that's all right.

Speaker A: Want to give it a little bit of a smush?

Speaker C: Sure.

Speaker B: All right, tell us your origin story.

Speaker A: How did you get to do what you do today?

Speaker B: Because you're one of the great financial

Speaker A: educators out there, and you're putting out tremendous content, but you actually know the brokerage industry, uh, pretty much back and forth.

Speaker C: I do, yeah. So do you want to know how I started in finance or. I started as a content creator in finance.

Speaker A: Take us from the beginning.

Speaker B: Origin.

Speaker C: Sure. So in high school, I actually was in this program called the Engineering Manufacturing Institute of Technology. It was a magnet program in a public high school. Um, so I've been a nerd the whole time. Did not know what my eyebrows were at that point. Changed my life when I figured that out. But there I actually thought I wanted to be a mechanical engineer, but then I wasn't sure. So my degree was actually in business and administration because I had no idea what I wanted to do. And I thought, okay, well, I can utilize business skills no matter what vertical, or I talk at stock market all the time now, no matter where I apply that. And I was in college, and I learned that you can get an elective. And I found a paid internship at a place called Scottrade. So I got paid college credit at the same time. Believe it or not, analogy here, I was a clean whiteboard. I knew nothing about the stock market. My exposure was that Gordon Gekko movie. That's it.

Speaker A: Yeah. Well, that's pretty good exposure. But Scottrade, for those that don't know, early days of online brokers, great technology. One of the first ones to really put that in the palms of retail and in the hands of retail investors when retail investing was hot, another one of those cycles. And Scottrade was very advanced with the technology. How's our mush going here?

Speaker C: I think that's mushed enough.

Speaker A: If I was going tableside, I would pick it up a little bit and just do a little bit of a dance. Maybe I'll sing a little bit.

Speaker C: See, I don't have the speed because I, uh. And you know what? That's okay. I might know the stock market and I go through things quickly. But if you don't, you have to take your time.

Speaker A: Yeah. And this is, you know, portfolio rotation.

Speaker C: Yeah, there we go. Consultant expert.

Speaker A: Talk about sector rotation. It's happening right here in our guacamole. This, you know, with a delicious margarita. Summertime. Good way to, uh, entertain your friends. And I do a guac Margs and masterclass now. Yeah. For special clients and special friends.

Speaker C: I'm really sad I didn't get the margarita.

Speaker A: Well, five o' clock somewhere. All right, take it. Let's try it out.

Speaker C: Okay.

Speaker A: See what it needs. See if our portfolio is actually working for our palate and for our risk tolerance.

Speaker C: Oh, that's solid.

Speaker A: Solid.

Speaker C: I think that's Gen Z slang for. That's really good.

Speaker A: That's what I was waiting for.

Speaker C: That's really good. Um, I love it.

Speaker A: Great. And more. I like a little lime in there. A little bit more lime. Keeps it fresh. So derivatives, when you have a little extra, I don't throw out the pulp for the tomato. Just turn that into a little pico de gallo right there. A little extra garlic goes in there. Using my fingers.

Speaker C: Because you wash your hands.

Speaker A: I wash my hands. This is our kitchen. And here you go, right there, you got a little pico de gallo on the side here. Throw on the fajitas.

Speaker C: Mhm.

Speaker A: And off we go. We got a little lime. Add a little lime to that.

Speaker C: That's why we had extra.

Speaker A: Now that is your derivative right there, pico de gallo.

Speaker C: So derivative means it derived from an original product. Finance isn't complicated. Literally the names mean something. And sometimes you have to go back to the history. Like stock certificate. You needed a stock certificate back in the day. A coupon is literally attached to a bond. That's why you say clipping your coupons. So if you just understand the history, stock market terms really aren't that complicated.

Speaker A: They're not that complicated. The industry likes to over complicate it, to make it seem like you need the experts out there, but you just need people like Jess out there helping you explain stuff. And Caleb, Investopedia. All right, let's play a little game of this or that. You're in Our kitchen. Now, here's our pico de gallo. If you want a little bit of that to go with your, uh, guacamole. And since you are the queen of the whiteboards, I thought I would do a little whiteboard action for you. Took me all morning.

Speaker C: Did it?

Speaker B: Yeah.

Speaker A: I don't know how many versions of this I did, so let's. Thank you. Let's play a little game of this or that.

Speaker B: Okay.

Speaker A: ETFs, exchange traded funds, or individual stocks. What's your preference?

Speaker C: So, just like the guacamole, you must have the foundation of ETFs, but it needs to be diversified. But I personally, I love individual stocks. I have a higher risk tolerance, personally, because I've got longer time until I want to.

Speaker A: Because you're young. Why don't you just say that?

Speaker C: Because I'm young. I didn't want to. You know, you are too, Caleb. Um, I like individual stocks because you can, as long as you do your research and understand how to read a balance sheet, understand what the company does. And I always say if you're picking individual stocks for the first time, to start with something, you know. And what that means is I have friends that work in marketing and SEO optimization, so you know how that industry works, which means you'd be able to look at those type of companies better than anyone else, because stocks are just companies. Don't overcomplicate it.

Speaker A: Don't overcomplicate it, but know what you own. So if you're gonna buy individual stocks, make sure you do your research right. You got to know what you're buying or what you're putting in your portfolio. Okay, here's some heavy ones. Leveraged ETFs, leverage exchange traded funds or inverse exchange traded funds or c. Neither.

Speaker C: I'm a neither. I really am. I know they're so popular right now, um, which is having such a big impact on the market.

Speaker B: I know.

Speaker C: Leverage.

Speaker B: I'm having more guac.

Speaker C: I really want to try some of the pico. Um, but I mean, if you are feeling very risky and want to add a ghost pepper there, that's. This is your ghost pepper to your portfolio.

Speaker A: Briefly explain to folks what leverage ETFs are if they don't know it. And inverse ETFs, because they kind of, uh, different sides of the seesaw, so to speak.

Speaker C: Sure. A leveraged ETF is going to amplify your returns. So it will multiply it times 2 times 3. There is a multiplier. However it is amplifies the performance, and it's not necessarily the underlying security. Sometimes it's swaps, sometimes it's futures, sometimes it's options. It's usually a uh, derivative. So it's not a component of it. They only match their performance. Amplified daily, they reset daily, which makes them extremely risky. Extremely risky. They are only intended. It's in the investment objective to hold once a day, otherwise it deviates. You can do a fun regression model to look at the deviation. Um, inverse acts very similarly and they can be inverse leveraged ETFs. We can combine them but it just means it is the opposite performance. So if the. There was a lot of SpaceX ones that came out, do you know there were 10 that came out on Monday following the IPO?

Speaker A: Of course there were.

Speaker C: Of course there were. Exactly.

Speaker A: Which why is there weren't more?

Speaker C: Uh, always, always. But retail demands it and the products then are there because retail demands it. But retail understand it. So um, the inverse ETFs mechanically the same. It's just if you the stock's going to go up, it will go down.

Speaker A: Yeah, yeah. Very simple, dangerous. Handle with care. Do not buy these without knowing what you're buying. All right. SpaceX or Caterpillar. One's mining the galaxy, the other's doing a lot of mining here on planet Earth.

Speaker C: So I actually like both right now for different reasons. SpaceX I think is going to be your more risky one. But I do believe in Starlink in data centers in space. And right now we have. Micron blew out earnings yesterday. Apple raised their uh, their prices of everything because of the cost of storage and memory. And then the cyber deck girlies all over the Internet, I don't know if you've seen that. It's my favorite trend so far. But memory is increasing in cost and a part of that is because of the insatiable demand because of artificial intelligence and data centers that are needed. And I do think space as SpaceX is going to innovate upon that. Caterpillar actually is a component of that too. Yeah, so it's same theme.

Speaker A: You probably see caterpillars in space probably on a SpaceX rocket at some point or maybe SpaceX just buys it. It's possible, gets to 4 trillion. But Caterpillar stock, I think it's at an all time high too. A lot of uh, similar theme but

Speaker C: more blue chip, better financials, a little

Speaker A: bit of a dividend there and some history.

Speaker C: Yeah, there we go. All right.

Speaker A: Jack Bogle or Cathie Wood? Love them both, respect them both. But in terms of investor you want to follow in the footsteps of who you admire most.

Speaker C: Uh, so this is for the everyday investor. Jack Bogle, I think if you're starting out, I admire that because it he gave us index funds and things like that.

Speaker A: The godfather of index funds.

Speaker C: Exactly.

Speaker A: Changed change investors lives.

Speaker C: It did and it allowed it democratized financial access and that is a beautiful thing. We both really advocate for the retail trader. So that's important to me. Cathie Wood however, if you read the investment objective, it is for you don't see a theme here. Read the investment objective exactly. She, it's all for long term but she seeks alpha to really find innovative companies, emerging companies. So it's high beta. So it's gonna, you're gonna lose a lot.

Speaker A: That's your jalapeno right there.

Speaker C: It is your jalapeno. There you go.

Speaker A: Yep. All right. Fed funds rate or the 10 year yield? Not which do you prefer but which do you think is more important for individual investors?

Speaker C: You know I think that's a tough one because it's changing right now. But without going into a deep rabbit hole, it's going to be the 10 year yield. Because the 10 year yield impacts mortgages. And right now the housing market is a lens because of what's happening with inflation. That bill that did not go through such a lens on that. And if we can bring down affordability, that's important. And even if you don't invest that's still impacts you.

Speaker A: I agree that affects just about everything for mortgage rates, but it also affects uh, when we're looking at the equity risk premium, that's something that investors look at all the time. Should I put my money safely in a bond that's yielding, I don't know, four and a half, 5% or take my risk in the stock market? And we know what the answer has been for the past, I don't know, 20 or so years. All right. Bitcoin or gold.

Speaker C: Oh, so this goes back to. This is. Well no, they're, they're mixed up here now. Um, I like both. I think bitcoin is kind of transforming. So maybe I'd say if stablecoin, which is completely different. So but big. The rails of bitcoin I've noticed are emerging with this theme and gap that I'm seeing within the market. So there is some use cases for bitcoin that I still like, especially with the Clarity act and things like that. I think with the administration we have fiscal policy that's conducive to that. That is my media Way of being very.

Speaker A: That was very media. I'm going to borrow that on TV myself.

Speaker C: But gold has had a run up. But what I've noticed when oil went down, so it was only because central banks were buying gold. So I'm staying away from that one right now. That one I think has a little more room to run. But this one might as well depends on what happens with the 10 year.

Speaker A: Right. And you could have both bitcoin and gold as well. All right. The Big Short or Wall Street. Which movie really does it for you?

Speaker C: I love Wall Street. I also love Margot Robbie. So there's that. Um, I thought. I think both are interesting because I don't know if you know this. Not a lot of people do. Before I was in finance, I actually cleaned hotel rooms.

Speaker A: I did not know that.

Speaker C: Yeah. So I have emerged from the ranks the right way to not like Jordan Belfort did in Wall Street. But I do appreciate the grind and the hustle and um. Then of course we went sideways there and I just love that movie. I think it's very entertaining and interesting and I used to work on an active trader desk and so.

Speaker A: So you know that you know that world very well.

Speaker C: I will leave it there. And um. But the Big Short also, I. I am known on finance, media and a lot of places for going down rabbit holes. And I find really weird things. Like I was the first person actually on CNBC to talk about ChatGPT.

Speaker A: So.

Speaker C: And I love rabbit holes. But it was odd because I was looking for automation because the Fed couldn't print people and we had a labor supply issue. And uh, I knew that automation would be the solution. So I was looking at like Rockwell Automation or CRM and things like that. Never knew it'd be artificial intelligence.

Speaker A: Your mind goes into very interesting places when you clean hotel rooms. I make guacamole. I work in the kitchen. You got the grind is everything.

Speaker B: It is. All right.

Speaker A: Earnings per share or revenue per employee. What is the most important metric for investors today?

Speaker C: You know, I want to say both. I think, uh, seeing an in because I don't think you can rely on an individual metric. And what I love about the stock market is its dynamic and things shift on what probably is more important. So earnings per share is great because we want to see that increasing. And I like to look at the forward eps, so what analyst estimates. But revenue for employee. We're trying to understand the impact of productivity and that is where we can spot it.

Speaker A: That's right. Right. And some of the most, uh, the biggest Companies, and some of the most profitable companies are paying a lot of attention to this metric. A lot of investors are paying a lot of attention to that. The company with the most revenue per employee. Do you know what it is?

Speaker C: I don't, actually.

Speaker A: It's Apple, actually. Wow. And then it's Nvidia.

Speaker C: That's. Look at that. That makes sense.

Speaker A: All right, last. Let's go out on this. What is your favorite investing term? What is the one that really just speaks to you and makes you just happy in the morning when you think of the word or when you see it written?

Speaker C: You know, lately I've been diving into repo markets. It's such a weird thing to say. Um, I love Gamma. Gamma is my favorite.

Speaker A: All right, tell the folks what Gamma means, especially important in the options market.

Speaker C: It is so, um, well, it's a derivative of a derivative of a derivative.

Speaker A: A Tropico.

Speaker C: We have to make Tropico Pico something with that.

Speaker A: Pico smoothie.

Speaker C: Yeah, exactly. Um, but so with options, when you think about delta, delta is your destination. So the option is either going to be worth something or it's not. So 0 or 1. That's the scale that it's on to negative one as well, depending if it's bullish or bearish. So it tells you direction and your destination. So, for example, if you're buying a call where if it gets deeper in the money so it has more value without describing them too much, you're going to get to a delta of one at expiration because there's no time value. Gamma is like your acceleration there. So Gamma tends to be centered around at the money options. And it's the reason why you shouldn't. Which are options with a strike price relatively close to the current market price. It's the difference of you being on a skateboard to that destination or a Maserati. And if you are buying options, you definitely want to be in a Maserati if you're selling them, you want to skateboard. So Gamma actually really helps you understand, um, not only direction, but directional risk exposure. Really important. Great.

Speaker A: It's all Greek to me, but you explained it so well. Folks, you got to follow Jesse across the social channels. One of the great financial educators out there. You really put my whiteboards to shame. But let me thank you for letting me, uh, put one together for you and humor you and let's enjoy some guac.

Speaker C: I'm excited. Thank you. That was super fun. Caleb, I really want to speak some

Speaker A: guacamole and doing a little this or

Speaker B: that Jess Inskip again, folks. Follow her on, on the, on the socials if you're on those channels because she does a great job of explaining, explaining things. Uh, yeah.

Speaker A: Thank you. Let's talk more investing Guac tutorial.

Speaker B: We do it all here.

Speaker A: This is Investopedia in the home of People Inc.

Speaker B: All right, nice soundtrack right there. All right, let's get to a little money in motion on the way out. One more trading day left in the first half of 2026. Again, it feels like it's been two years long this six months, but we're here for it. And let's do a little report carding again on some of the stocks that have made the biggest moves and some of the sectors that have made the biggest moves. Looking at the scores on the doors here, shout out to our friends at B of A, uh, and their research team for putting this together. Oil, 22% this year. I know it's come down, but it has had the biggest increase of any asset class out there. International stocks about 11 and a half percent. The S&P 507.5%. Not bad for the first half of a year given all the news. The US dollar strong, strong across the board. Over 3%, uh, cash giving you about 1.7% in those money markets. And the high yield bonds really leading the bond market which is in kind of its own little Bear market, up 1.4%. Gold has had a terrible 2026 compared to the last couple of years, down 7% but not as bad as Bitcoin heading for one of its deep winters. Even though it's the middle of the summer. The top performing stocks in the s and P500 year to date. It's all about chips, my friends. Bring in the cookie monster because it's chip city. And even though some of these stocks have fallen off, the returns on some of these semiconductor stocks and stocks around the semiconductor ecosystem, bananas. Look at SanDisk, up 780% year to date. Look at Micron, up almost 300% year to date. Intel, uh, up 247%. Western Digital 240%. Seagate, 226%. Chips have been the sector of the year so far in 2026. Ton of volatility there. But it seems like chip prices are going to keep increasing, especially for what they call DRAM Dynamic Random access memory. Uh, because that's what we need in these AI data centers. That's what we need for compute, for creating generative, uh, AI and all the agentic AI that's coming this is where that, that's powered. It's powered through the chips. When you look at the losing, uh, stock so far this year, it's stocks that are in the software sector, by and large, that could be disrupted by AI. And Intuit's the top of that list, down almost 60%. Costar group, down 55%. Oops. Boston Scientific, thanks for the fixing. My typo there, down 52%. Accenture, that's consulting my friends, down 51%. In Trade Desk, they do a lot of the, uh, ad arbitrage and exchange on online advertising. And that has been disrupted too, down almost 52%. All right, let's take a little break here from our friends at Augusta Precious Metals, and we'll be right back with what to watch this week.

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Speaker B: All right, a busy but short trading

Speaker A: week with markets closed on Friday for

Speaker B: the Independence Day holiday, which is actually the fourth on Saturday, but they're closing markets on, uh, Friday as well. Today, Monday, no economic releases, slow week of economic releases until Thursday. We'll get to that in a second. But on Tuesday, final day of the second quarter, again, a pretty volatile quarter here for the stock market. A lot going on in terms of the war in Iran, the ceasefire, the non ceasefire, oil prices, inflation popping, new Fed chair, really busy quarter. We're coming to the end of that. Uh, we'll get a reading on consumer confidence for the month on Tuesday as well. And then earnings from Nike and Constellation brands. Just do it. Let's hear from Nike, their big sponsor of the World cup, which has been so much fun. I got to go to The England Panama game over the weekend. Great game. World cup is one of the greatest sporting events out there. Wednesday, July 1st, first day of July. The ADP private payrolls report coming out. That'll give us a sense of what private uh, companies are doing in terms of hiring and firing. I always find that a little bit more uh, on the spot than the government reports. Just because it's a little bit more dynamic. It's actually measuring paychecks. It's not doing a phone call. Earnings from General Mills. Get your Wheaties on Wednesday and on Thursday.

Speaker A: Big day.

Speaker B: June jobs report, the non farm payrolls report and everything that comes with it. We'll get the unemployment level, we'll get the jobs added jobs loss. We'll get average hourly earnings. How those compare to inflation, we'll get breakdowns by sector, breakdowns by race, breakdowns by age. And the jobs market is probably, uh, uh, one of the more important factors right now, just given the uncertainty about the economy. But the job market's holding up well and inflation continues to come down. Maybe we see no change in interest rates this year or maybe we actually do see a cut at some point. It all really depends. But right now, the unemployment rate of 4.3%, companies still continuing to hire. We've seen these estimates rate being, uh, the revisions for the prior months raise and big job numbers over the past couple of months. If that continues apace, well, economy is in decent shape and maybe we will get to that 3% GDP if that's what really matters, uh, to this administration. We will find out. Big jobs report on Thursday. Friday, markets are closed. And as our buddy Ryan Carson, Ryan, uh, Dietrich at the Carson Group, likes to remind us. And I saw Ryan and Sonu last week in New York City. Shout out to those guys, uh, always so good to see them, all the friends that, uh, we share in common. July has been the best month for the stock market for the past 20 years. Nothing hotter than July. And we used to say sell in May and go away. Well, don't do that in July because July has been hot city and we are heading into a midterm election cycle if you hadn't noticed the, uh, commercials on your local TV channels. We're heading into that. That said, July has been good. Let's see if it remains strong. And if we see this continued decrease in oil prices and gas prices and spending gets a little bit stronger going into the summer here with all the stuff going on in the United States right now with the weather, World cup and the Taylor and Travis wedding. Uh, well, we could be hotter than July. One of the great Stevie Wonder albums out there. Nothing Hotter than July. Nothing hotter than that album. Bang it at your next barbecue because Stevie Wonder still running things around here. All right, let's get to our indicator of the week. And this coming from the good folks at Gallup. They like to survey Americans about what they think is their best long term investment. Is it bonds, is it real estate? Is it Savings accounts or CDs? Stocks or mutual funds? Gold or cryptocurrency? And it is real estate by a fair amount. 38% of Americans responding to the Gallup poll saying real estate is the best long term investment. Stocks and mutual funds come second at 20%, and then there's gold at 18 and then everything else. So when you look at the real returns in the real estate market, I'm talking about the purchase of a primary home. I'm not talking about flipping homes or becoming an Airbnb. You, um, know, uh, owner and owning several properties that you're using for passive income or commercial real estate. I'm not talking about that. I'm talking about buying your home. The real returns on real estate, even though home prices have soared, are only like 3 to 4% a year at best, going back about 30 years now. Why is that the case? Because owning a home because becomes more and more expensive every single year. Even though the value of your home may go up, which is equity for you, if you're the homeowner, you might own it outright. It only is valuable to you in terms of dollar for dollar when you sell it. Now, you can't put a price tag on the emotional value of your home. That is where you live. That is where you put your head down. That is where you share meals with your family and great moments and go through life stages. I'm not saying it's not valuable. I'm saying for investment purposes, nothing beats the stock market. The stock market averages about 10% annual returns a year once you reinvest the dividends, and over the past five years, it's up 15.5% once you've invested, reinvested those dividends, and most of us do through our mutual funds and index funds. And I'm not saying you shouldn't own a home. I'm just saying it's so interesting that Americans still believe this. And maybe this is, uh, a snapshot of an older generation, older group of Americans, older cohorts like my age, Gen X and older, who know and appreciate the value of owning their home because they've watched it grow in value. But the stock market is where the wealth has been created and that's where the wealth will continue to be created. We always do a survey, uh, a pricing, I should say, uh, with our data team on the price of the American dream. And last year when we priced it out, it was 5 million bucks. And a big chunk of that is owning a home and having that home and servicing that home. I'm talking about insurance, I'm talking about paying, uh, your mortgage. I'm talking about taxes, maintenance, the trips to the Home Depot on Saturdays when you only thought you needed a roll, a duct tape, but you come back with $300 worth of other things. It gets really expensive. So more people are thinking twice about should I own a home or should I take that money, that million bucks, that 2 million bucks, whatever, it's going to cost me 500,000 and invest it for the long term and invest in experiences, right? Go live abroad for a couple of years. Go do something weird and different with your family. Create some memories that you'd never be able to recreate if you became house poor and sunk all your money into a home. Now, I'm not dissuading anyone from owning a home. I did for a period of time. It was a very smart investment. Uh, the timing was good, but I use it for that to raise my children and as an investment to open up some other opportunities. I just think it's so fascinating that Americans still believe owning the home is the best long term investment. It might be the most valuable investment, the most priceless investment, but dollar for dollar, nothing beats investing in the stock market. And that, my friends, is how you create a strong financial foundation and ultimately financial freedom. So on this Independence Day weekend coming up, I wish you and America a happy 250th. But I wish you a happy independence. Independence from all the things, uh, that you feel are holding you back. And one way to get on top of that and get your arms around it and feel like you're in a stronger place is to get financially fit. Financial education opens the door to so many things. That's why we preach it here on the Investopedia express and on investopedia.com. so, hey, thank you, monsieur. Thank you for saying that. I appreciate you. I appreciate all Investopedia listeners, followers, fans and express maniacs out there. Emotional value versus investment. Love the distinction. Yeah, well, thank you. I really believe that now all things have a different value to different people. But when you want to build wealth, you have to invest. And you have to make sure you know how to do that right. That's why we have folks like Jess on the show and all the great guests that join the Investopedia Express. And that's why we like talking to you every single week. So until next time, signing off here from the Invested PD Express Live every Monday and on all your podcast platforms on demand. We will talk again a little further on down the line. Um, sam?

Speaker C: Mhm?