(INVESTING IN A S&P 500 INDEX FUND COULD BE A SMART MOVE)
Friday, July 5, 2023
Hello everyone,
Warren Buffett is a big fan of S&P 500 Index Funds, so maybe you should consider squirreling away some of that hard-earned cash into one of those funds. As Buffett says, it’s a way for investors to mitigate the risks that come with choosing individual stocks.
By investing in this product, you are essentially buying all the big companies through the S&P500. If you do it consistently and average in, you will end up with a very good investment.
The S&P500 is a market index that tracks the stock performance of around 500 large-company U.S. stocks, including Amazon, Google parent company Alphabet, Meta, and Visa.
While the index is not immune to overall market downturns, long-term investors have historically earned a nearly 10% average annual return. However, as with all investments, it is important to note that past performance can’t be used to predict future results.
Here’s how much you’d have now if you’d invested $1000 in the S&P500 about one, five, and 10 years ago:
$1000 a year ago would be worth $942 as of April 20.
$1000 five years ago would be worth $1,689 as of April 20.
$1000 10 years ago would have more than tripled to $3,217 as of April 20.
Choosing to buy an S&P 500 index mutual fund or exchange traded fund (ETF) gives you exposure to the index’s underlying stocks.
It’s less risky than owing individual shares. Not as many severe drawdowns.
As index funds are considered passive strategies, they tend to be low-cost investments. Index funds track a benchmark performance and therefore don’t employ a manager to run the fund, as is the case with “active” strategies.
As a result, the average passive fund charges an annual fee of 0.12%, compared with a 0.60% average fee among active funds, according to data from Morningstar.
Of course, the sooner you start investing the better. The power of compounding will work for you and reward you handsomely.
Wishing you all a wonderful weekend.
Stay healthy and take care.
Cheers,
Jacque
https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png00Mad Hedge Fund Traderhttps://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngMad Hedge Fund Trader2023-07-05 18:00:242023-07-05 18:18:43July 5, 2023
Artists and musicians have always been the driving force behind creative innovation. However, as artificial intelligence (AI) increasingly finds its place in the realm of art, some creators express concerns about feeling cheated and their work being perceived as stolen. This article delves into the emotions and perceptions surrounding the intersection of AI and artistic inspiration.
For artists and musicians, their creations are not just pieces of work but a reflection of their identity and personal investment. They pour their emotions, experiences, and creative energies into their art, making it a deeply personal expression. When AI algorithms generate content that imitates or replicates their style, artists may feel a sense of detachment from their own work. This detachment can stem from the perception that their originality and unique artistic voice are being diluted or compromised.
Artists and musicians fear that the proliferation of AI-generated content might diminish the value and appreciation of their original works. The widespread availability of AI-generated art might create a perception that artistic creation is no longer a skill exclusive to human creators. This fear can be rooted in concerns about commodification and the loss of the intrinsic value that comes from human interpretation, emotion, and expression. Artists worry that their work will be devalued or seen as replaceable, undermining their professional worth and livelihoods.
Another aspect that contributes to artists feeling cheated is the issue of attribution and recognition. When AI generates content inspired by their work, the question of who deserves credit becomes blurred. Artists may feel sidelined or overlooked as the focus shifts toward the novelty of AI technology. Without proper acknowledgment and credit, artists fear their contributions will be overshadowed, leading to a sense of being robbed of their rightful recognition and impact.
While artists' concerns about AI and stolen inspiration are valid, it is essential to foster a shift in perspective. Rather than viewing AI as a threat, artists can embrace it as a catalyst for new possibilities and collaborations. Artists possess a unique ability to infuse their work with human experiences, emotions, and vulnerabilities, which AI cannot replicate. By acknowledging this distinction, artists can find confidence in their irreplaceable contribution to the artistic landscape.
Artists and musicians feeling cheated or having their work perceived as stolen in the realm of AI-generated creations reflects their deep emotional connection and personal investment in their art. Balancing the concerns with the opportunities offered by AI can lead to a more nuanced and collaborative approach, fostering an evolving and dynamic artistic environment.
Midjourney Prompt: “The Mona Lisa if painted by Salvador Dali”
Who’s Using AI Today?
Many market trading companies use AI to help their investors invest in the market but a larger majority are using the tools of AI to test the waters and to give themselves an extra edge when it comes to understanding the future and implementation of these essential tools.
There are several stock market trading companies that actively use artificial intelligence (AI) in their operations. Here are a few prominent examples:
Citadel Securities is a global market maker and liquidity provider that extensively uses AI algorithms in its trading strategies. Their AI-powered systems analyze vast amounts of market data to make informed trading decisions and improve execution efficiency.
Renaissance Technologies, a renowned hedge fund, utilizes AI and machine learning techniques extensively in its trading models. Their flagship Medallion Fund employs sophisticated AI algorithms to identify patterns and generate trading signals.
Two Sigma Investments is a quantitative investment firm that heavily relies on AI and machine learning for stock trading. They employ advanced algorithms to process vast amounts of data, identify market trends, and execute trades.
Bridgewater Associates, one of the world's largest hedge funds, employs AI-based systems to inform their investment decisions. Their AI models analyze economic data, market indicators, and news sentiment to generate trading signals.
Man AHL is a systematic investment manager that actively incorporates AI and machine learning techniques in their trading strategies. They utilize AI algorithms to identify patterns and generate signals across various asset classes.
BlackRock, one of the largest asset management firms globally, employs AI and machine learning techniques to enhance its investment and trading processes. They leverage AI for risk management, portfolio optimization, and trading execution.
Goldman Sachs, a prominent investment bank, has integrated AI technology into their trading operations. They use AI algorithms to analyze market data, predict price movements, improve trading strategies, and assist developers in writing code.
These are just a few examples of stock market trading companies that actively utilize AI in their operations. The use of AI in trading is an evolving field, and many other firms are incorporating AI techniques to gain a competitive edge in the market.
https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png00Douglas Davenporthttps://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngDouglas Davenport2023-07-05 16:46:162023-07-05 16:47:38The Tug of Artistic Innovation: Exploring Artists' Concerns about AI and the Perception of Stolen Inspiration
Facebook’s Mark Zuckerberg is coming out with a copy of Twitter to rival Elon Musk’s takeover trophy Twitter.
This effectively means that the Metaverse project is a dumpster fire.
Twitter is the town square of the world.
Every big name with clout has a direct voice open to the world on Twitter and nowhere else.
Apparently, Zuckerberg wants the same.
Instagram is not a bad asset, but it's more of a photo collage that acts as a dating profile to the whole world.
World leaders don’t use Instagram which matters so I don’t believe this will be a slugfest – more of a strong whimper.
Facebook’s new product will be called “Threads.”
In short, it’s basically a texting version of Instagram.
Instagram users will be able to keep their user names and follow the same accounts on the new app, according to screenshots displayed on the App Store listing.
Threads won’t make many inroads against Musk, who acquired Twitter last year for $44 billion and has brilliantly purged a useless workforce and added a slew of new advertisers to his new app.
The success has been so good that he has claimed that Twitter will soon be profitable.
Allowing Instagram users to port their profile to Threads could give the new app more traction with potential users by providing a ready-made set of accounts for them to follow.
However, I believe it’s a bad idea because these services will compete with each other and users will be cannibalized.
Interestingly enough, the mainstream media has been printing negative articles on Musk since the day he bought Tesla because Musk has been highly vocal against left wing investors that own major publications like Bill Gates and George Soros.
It’s smart that Musk took Twitter private because a public Twitter would need to navigate his critical tweet storms and dealing with unhappy shareholders.
Most users might be put off by Meta’s data privacy track record and would-be Twitter challengers like Mastodon have found it a challenge to sign up users.
For Threads to succeed, it will need to poach Twitter users.
Pew Research found last year that among U.S. adults who use Twitter, the top 25% of users by tweet volume produced 97% of all tweets. Musk isn’t going to cede Twitter’s role in the social-media ecosystem lightly, if his early reactions to Meta’s plans are anything to go by.
From my analysis, Twitter does a relatively good job with its platform.
At the very minimum, the Twitter experience isn’t such a bad experience to the point where it will bleed users.
I don’t exactly understand where Thread’s advantage is here and how they will cheaply steal Twitter’s business.
If they do steal Twitter’s business, the cost will be extremely cumbersome.
For me, the only way I envision Twitter capitulating is with a self-inflicted wound.
Twitter is stronger than ever not only as a revenue model but also its scarcity value which is at an all-time high.
There is a reason why Zuckerberg is going after Twitter and not the other way around.
Twitter is the best social media app on the market and the so-called negativity of Twitter by coastal journalism has sour grapes written all over it.
Zuckerberg’s Thread has a higher chance of stealing Instagram users.
That being said, Meta shares have had an outstanding 2023 and even if this is another soccer-like flop like the Metaverse, it won’t materially damage the stocks’ trajectory. Buy META on the dip.
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“I’d rather be seen as evil than incompetent.” — Said German-American billionaire entrepreneur and venture capitalist Peter Thiel
https://www.madhedgefundtrader.com/wp-content/uploads/2023/07/peter-thiel.png880520Mad Hedge Fund Traderhttps://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngMad Hedge Fund Trader2023-07-05 16:00:152023-07-05 18:08:16Quote of the Day - July 5, 2023
Come join me for lunch at the Mad Hedge Fund Trader’s Global Strategy Update which I will be conducting in Cortina, Italy on Thursday, July 27, 2023. An excellent meal will be followed by a wide-ranging discussion and an extended question-and-answer period.
I’ll be giving you my up-to-date view on stocks, bonds, currencies, commodities, precious metals, and real estate. And to keep you in suspense, I’ll be throwing a few surprises out there too. Tickets are available for $288.
I’ll be arriving on time and leaving late in case anyone wants to have a one-on-one discussion, or just sit around and chew the fat about the financial markets.
The lunch will be held at an exclusive hotel in the heart of Cortina with an expansive view of the Dolomites. I picked Cortina because this is where my great uncle died in the “White War” of WWI. Cortina has also been the location of three James Bond movies. The precise location will be emailed with your purchase confirmation.
I look forward to meeting you, and thank you for supporting my research.
To purchase tickets for the luncheons, please click the BUY NOW! button above or click here.
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Reading books about money &/or the markets or listening to them via Audible can have a profound effect on your lifestyle & how comfortable you will be in retirement. Provided, of course, you make some changes, and take action.
So, here is a list of books I recommend you pick up and read. Even if you get one small piece of advice from each book, that could be worth its weight in gold.
Enjoy!
1. “The Millionaire Next Door: Surprising Secrets of America’s Wealthy”
The late Thomas Stanley collected years of data about millionaire lifestyles. He found that they don’t all inherit their wealth or own mansions. Instead, they live modestly while accumulating their wealth.
This book was originally published in 1996, but the basic money principles can still be applied today.
2. “The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich”
Our brain mainly runs on autopilot, but there are ways to retrain your brain for lasting changes that can help you feel happier in just one week.
The book breaks down the components of happiness and stress, then offers weekly exercises to help you build new neural pathways for a more joyful and purposeful life.
4. “Just Keep Buying: Proven Ways to Save Money and Build Your Wealth”
Popular finance blogger Nick Maggiulli dives into the two main principles of building wealth — saving and investing — and crunches numbers to give practical advice for any type of investor in any type of market.
This book is a good reminder that you don’t need to be a math genius or even lucky to get rich in the market.
5. “I Will Teach You To Be Rich: No Guilt. No Excuses. No BS. Just a 6-Week Program That Works”
The second edition of Ramit Sethi’s popular book “I Will Teach You To Be Rich” challenges traditional finance advice.
For example, many experts recommend brewing your coffee at home to save money, but not Sethi. In fact, he teaches readers to uncover their “rich life” by spending lavishly on things they care about while cutting back on what doesn’t matter.
(I especially liked his script for talking your way out of late fees. That alone could be worth the price of the book.)
6. “Stop Overthinking: 23 Techniques to Relieve Stress, Stop Negative Spirals, Declutter Your Mind, and Focus on the Present”
Overthinking can have devastating effects on your mental health, and this book shows you how to escape your own mental prison.
You’ll learn to identify when you are overthinking and use relaxation techniques. Even those who live a relatively stress-free life could benefit by giving this a read.
7. “The Psychology of Money: Timeless Lessons on Wealth, Greed and Happiness”
If paying off your mortgage early makes it easier to sleep at night, it’s a great decision, even though it might not make sense mathematically.
Making good money choices is equal parts math and psychology. Money expert Morgan Housel explores the psychological side of finance in a clever and non-judgmental way.
8. “Your Money or Your Life: 9 Steps to Transforming Your Relationship With Money and Achieving Financial Independence”
This book explores the uncomfortable idea that many of us work ourselves to death. We work 40 hours a week for decades and hope to have 10 quality years of retirement.
The authors flip that script by challenging you to think: How much of my life am I giving up to drive that expensive car or live in the big house on the hill? When is enough enough?
Wishing you all a great week.
Cheers,
Jacque
"We may encounter many defeats, but we must not be defeated." - Maya Angelou
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A major Wall Street Bank has delivered us a stunning report telling us Artificial intelligence (AI) will replace the equivalent of 300 million full-time jobs.
Has science fiction finally arrived to jostle elbow-to-elbow with the working class?
I believe that report has been manufactured out of hyperbole.
Don’t forget that Wall Street is usually wrong in many of their predictions so take their analysis with a grain of salt.
Many of JP Morgan’s (JPM) top equity analysts have been publically telling us for the whole of 2023 that the stock market will fall to pieces because of an “earnings recession.”
I won’t name names but they couldn’t have been more wrong if they tried.
I do visualize AI taking jobs out of the US economy, but the truth is a lot more nuanced than that.
This report said that AI could replace a quarter of work tasks in the US and Europe but may also mean new jobs and a productivity boom.
And it could eventually increase the total annual value of goods and services produced globally by 7%.
Generative AI, able to create content indistinguishable from human work, is "a major advancement", the report says.
The report notes AI's impact will vary across different sectors - 46% of tasks in administrative and 44% in legal professions could be automated but only 6% in construction and 4% in maintenance, it says.
What ChatGPT does, for example, is allow more people with average writing skills to produce essays and articles which is completely accurate.
However, articles produced with no “voice” or individualism lack authenticity.
So it’s not fair to say that journalists will face more competition, which would drive down wages unless we see a very significant increase in the demand for such work. Funnily enough, journalism is quickly dying in 2023 because of a human element instead of an artificial one as mass journalism has turned into activism that does the bidding of whoever is sponsoring the newspaper.
Consider the introduction of GPS technology and platforms like Uber (UBER). Suddenly, knowing all the streets in London had much less value - and so incumbent drivers experienced large wage cuts in response, of around 10% according to our research.
The result was lower wages, not fewer drivers. However, GPS systems have nothing to do with creating unions which is another human element that AI cannot predict. If Uber drivers around the world could unite through human solidarity and muster up a functional workers union, then Uber would need to pay through the roof for benefits like paid time off, health care insurance, and sick leave.
I am not going to sit out here and talk about AI as if the human element is stripped out of anything AI is related to.
That analysis would be utterly incomplete.
And if generative AI is like previous information-technology advances, the report concludes, it could reduce employment in the near term.
Oddly enough, the jobs largely at risk to AI are white-collared jobs that are repeatable. This type of job stretches the gamut from clerical secretaries to computer programmers and interior designers.
The 300 million jobs estimated to be replaced is not something I agree with wholeheartedly.
A lot needs to go right to get anywhere close to that number.
The more interesting part of the technology is deploying the best parts of it to supercharge existing jobs like economic analysis and stock market prediction.
This is where the Mad Hedge Fund Trader comes in where I might be performing in the future at 500X of what I do now and even though that’s not an official “replacement” job, it would net the economy +500 because of the productivity gains.
Similarly, there will be outsized winners who deploy this technology who will net more than 1,000,000X increased productivity of pre-generative artificial intelligence.
Therefore, this technology is much more interesting at the top end of the job market than the lower end and this phenomenon will certainly supercharge tech stocks that jump into this groundbreaking technology AT THE TOP END.
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