At their core, prediction markets allow participants to buy and sell contracts based on whether they believe a specific event will occur. The price of these contracts fluctuates as traders place bets on what they think is most likely to happen.

For example, a prediction market might ask, “Will a particular candidate win an upcoming election?” A contract tied to a “Yes” outcome may trade for 65 cents. In simple terms, the market is suggesting there is roughly a 65% chance of that event occurring. If the event ultimately happens, the contract settles at $1. If it does not occur, the contract becomes worthless.

Supporters of prediction markets argue that they can provide valuable insights because participants have financial incentives to make accurate forecasts. Unlike opinion polls, which simply ask respondents what they think, prediction markets require traders to put money behind their beliefs.

These markets have been used to forecast political races, economic trends, corporate earnings reports, and even the likelihood of certain legislative actions. Some researchers believe that prediction markets can sometimes be more accurate than traditional forecasting methods because they aggregate information from many different participants.

However, prediction markets are not without controversy. Critics argue that market prices can be influenced by speculation, misinformation, or sudden news events that may temporarily distort public expectations. Additionally, regulatory questions have emerged regarding whether certain prediction markets resemble gambling or financial derivatives.

For individual participants, prediction markets can be both educational and risky. Traders who correctly anticipate outcomes may earn profits, while those who make incorrect predictions can lose money. As with any form of speculation, participants should understand the rules, fees, and risks before investing funds.

Several online platforms now offer prediction market contracts on a variety of topics. Depending on the platform and jurisdiction, users may be able to trade contracts tied to elections, economic indicators, sports outcomes, entertainment awards, and other real-world events.

As technology continues to evolve, prediction markets are attracting increasing attention from investors, academics, policymakers, and everyday consumers interested in measuring collective expectations about the future. Whether viewed as a forecasting tool, an investment opportunity, or a form of speculation, prediction markets represent a growing intersection of finance, data, and public opinion.

How Prediction Markets Work at a Glance

1. A question is created about a future event.
2. Traders buy “Yes” or “No” contracts.
3. Contract prices move based on market demand.
4. Prices often reflect the market’s estimated probability of an outcome.
5. When the event is resolved, winning contracts pay out while losing contracts expire.

Important Reminder

Prediction markets involve risk. Participants should only use money they can afford to lose and should carefully review the rules and regulations governing any platform before trading.

Interested in Learning More About Investing?

Prediction markets are just one way people attempt to forecast future events. If you’re interested in exploring stocks, ETFs, and financial markets, you can learn more through this resource:

👉 Start Here

Disclosure: We may both receive a referral reward if you sign up through this link.

The post Understanding Prediction Markets: Betting on Future Events or Measuring Public Expectations? appeared first on The Hemet & San Jacinto Chronicle.

WASHINGTON (AP) — Treasury Secretary Janet Yellen urged world finance leaders Tuesday to “get concrete” as they look for ways to combat a looming crisis over food insecurity around the globe that Russia’s war in Ukraine has made even worse.

“This threat touches the most vulnerable people the hardest — families that are already spending disproportionate amounts of their income on food,” Yellen told fellow finance leaders during a food security meeting convened with members of the International Monetary Fund and the World Bank. “Moreover, the interconnectedness of the global food system means that people on every continent are impacted.”

Among the proposed solutions under discussion: reducing export restrictions, relieving price controls across countries and subsidizing small farmers globally. Failure to feed the world’s population risks not only starvation, but also social unrest and cross-border political upheaval.

On Tuesday afternoon, the Treasury Department issued a carve-out to the sanctions that have already been imposed to allow agricultural transactions and trade related to humanitarian aid and access to communications.

Russia and Ukraine produce a third of the world’s wheat supply and the loss of commodities due to the war has resulted in soaring food prices and uncertainty about the future of food security globally, especially in impoverished countries.

The costs of fertilizer and natural gas have exploded and leaders expressed concern that countries could turn inward and restrict trade to protect their populations, indirectly hurting more vulnerable countries that face even worse food problems.

“We know that we must avoid export restrictions that could further increase prices,” Yellen said. “We must quickly support the most vulnerable populations with social safety nets and targeted support for smallholder farmers so they can continue to produce.”

David Malpass, president of the World Bank, said his organization will provide $17 billion per year to strengthen food security. “We think food insecurity is rising fastest in middle-income countries and responding appropriately is mission critical,” he said. The organization is also developing a 15-month crisis response package of $170 billion, that will address the pandemic, refugee resettlement and other issues alongside food supply.

The U.N.’s Food and Agriculture Organization Food Price Index has made its biggest jump since its inception in 1990, reflecting an all-time high in the cost of vegetable oils, cereals and meat, according to the organization.

A late March report from the organization stated that the global number of undernourished people could increase by 8 million to 13 million people into 2023, “with the most pronounced increases taking place in Asia-Pacific, followed by sub-Saharan Africa, and the Near East and North Africa. If the war lasts, impacts will go well beyond 2022/23.”

Gilbert Houngbo, president of the International Fund for Agricultural Development, said international banks should look not just at food production but also “providing food on the table, it’s a matter of ensuring minimum social protection for the most vulnerable communities.”

“Those small-scale producers should have their fair share in what they produce,” he said.

Yellen said international financial institutions need to work with affected countries to develop solutions.

“They can help mitigate the global fertilizer shortage and smooth supply chain disruptions for food and critical supplies,” she said, adding that they also can offer “targeted assistance and strengthen social safety nets to protect vulnerable people in the short term and build their resilience over the longer term.”

Anna Nagurney, a crisis management specialist at the University of Massachusetts Amherst, said Tuesday’s meeting of global leaders was significant and “speaks to the growing fear and the increasing understanding that the world may be on the verge of a hunger catastrophe.”

Nagurney predicted that countries that have not yet provided clear support for Ukraine — such as China and India — will come to realize that the food insecurity from a prolonged war in Ukraine will affect their own national stability and the welfare of their citizens.

“This may help to further isolate Russia both morally and economically,” she said.

Deputy Treasury Secretary Wally Adeyemo said Monday that the international coalition of countries imposing sanctions on Russia and its allies takes the food security threat seriously.

“One of the things we have to do is take practical steps to demonstrate that this system is helping the people who need it the most,” he said, which includes a “focus on those countries that are struggling to pay for things like bread for their people in light of the increase in commodities prices.”

Find your latest news here at the Hemet & San Jacinto Chronicle

The post Finance heads urged to boost fight against food insecurity appeared first on The Hemet & San Jacinto Chronicle.

CHARLOTTE, N.C. (AP) — Roughly 4 in 10 Americans say they’re still feeling the financial impact of the loss of a job or income within their household as the economic recovery remains uneven one year into the coronavirus pandemic.

A new poll by The Associated Press-NORC Center for Public Affairs Research provides further evidence that the pandemic has been devastating for some Americans, while leaving others virtually unscathed or even in better shape, at least when it comes to their finances. The outcome often depended on the type of job a person had and their income level before the pandemic.

The pandemic has particularly hurt Black and Latino households, as well as younger Americans, some of whom are now going through the second major economic crisis of their adult lives.

“I just felt like we were already in a harder position, so (the pandemic) kind of threw us even more under the dirt,” said Kennard Taylor, a 20-year-old Black college student at Jackson College. Taylor lost his job as a server in the campus cafeteria in the first weeks of the pandemic and struggled to make rent and car payments while continuing his studies. He had to move back in with his family.

The poll shows that about half of Americans say they have experienced at least one form of household income loss during the pandemic, including 25% who have experienced a household layoff and 31% who say someone in the household was scheduled for fewer hours. Overall, 44% said their household experienced income loss from the pandemic that is still having an impact on their finances.

The poll results are consistent with recent economic data. Roughly 745,000 Americans filed for unemployment benefits the week of Feb. 22, according to the Labor Department, and roughly 18 million Americans remain on the unemployment rolls.

Thirty percent of Americans say their current household income is lower than it was when the pandemic began, while 16% say it is higher and 53% say there’s been no change. About half of those who experienced any form of household income loss during the pandemic say their current household income is lower than it was.

The poll’s findings reflect what some economists have called a “K-shaped recovery,” where there have been divergent fortunes among Americans. Those with office jobs were able to transition to working from home while those who worked in hard-hit industries such as entertainment, dining and travel suffered. The poor have struggled to recover financially compared to the wealthy and Black and Latino households have not bounced back as well as their white counterparts.

Logan DeWitt, 30, kept his job with the government through the pandemic because he could work remotely. But his wife, a childcare worker, lost her job and after months of searching for a new one has returned to school. Their financial situation was further complicated by the fact that their first child was born in the early months of the pandemic.

“We had plans to get a house. Had to scrap that idea, and we consolidated down to just one car. We do a lot of cooking from home and buying in bulk,” DeWitt said.

About 1 in 10 Americans say they couldn’t make a housing payment in the last month because of the pandemic, and roughly as many say that of a credit card bill. Overall, about a quarter of Americans say they’ve been unable to pay one or more bills in the last month.

Thirty-eight percent of Hispanics and 29% of Black Americans have experienced a layoff in their household at some point during the past year, compared with 21% of white Americans.

This recession has been particularly hard on younger Americans, too. Forty percent of Americans under 30 report lower income now, compared to March 2020. About 4 in 10 have been scheduled for fewer hours. Roughly a quarter say they quit their job. Many millennials, who experienced the Great Recession early in their adult lives, are now experiencing yet another major financial crisis.

Congress is about to finalize the Biden administration’s $1.9 trillion stimulus package that includes aid for many Americans and business still feeling the impact of the pandemic. Timing is crucial — many of the relief measures passed earlier by Congress, most notably unemployment benefits, will be coming to an end in the next few weeks.

“It’s really going to help us,” said Nikki Luman, 43, from Ohio. Luman worked part-time at her local library, which had to close in the early weeks of the pandemic. The library is still operating at low capacity due to COVID restrictions, which translates into fewer hours for her each week.

“That’s $400 a month that we have been missing for the past year,” she said.

Things are not as dire as they were in the early stages of the pandemic for some Americans, in part because of the previous measures taken by Washington. Also the changes in lifestyle — less eating out, less traveling, no live entertainment — have allowed some Americans to make their financial lives healthier. In the poll, roughly 4 in 10 say they’ve been saving more money than usual, and about 3 in 10 have been paying down debt faster than usual.

Tracie Jurgens, 44, works in the trucking industry. Jurgens said her income evaporated in the first weeks of the pandemic as demand for truckers plummeted. Jurgen’s boss was able to get a loan through the Paycheck Protection Program for small businesses, which he used to purchase new equipment in the summer as things started to recover.

“I don’t know what I would have done if he didn’t get another truck,” she said.

Find your latest news here at the Hemet & San Jacinto Chronicle

The post AP-NORC poll: Many in US still face COVID-19 financial loss appeared first on The Hemet & San Jacinto Chronicle.

WASHINGTON (AP) — Republicans opposing a $1.9 trillion COVID-19 relief package that passed the House have pointed to two transportation projects as examples of pork that would politically benefit Democrats leaders Chuck Schumer and Nancy Pelosi.

Now those projects are out of the bill.

Drew Hammill, a spokesperson for House Speaker Nancy Pelosi, said the Senate Parliamentarian has ruled that a subway extension through downtown San Jose did not meet requirements for inclusion in the bill because it is part of a pilot project. The project was set to receive about $141 million under the bill that passed in the House. The parliamentarians rulings are generally respected by the Senate.

Also, the $1.5 million in funding to maintain and operate a bridge connecting Canada and the United States in upstate New York, Schumer’s home state, has been removed by Senate drafters of the bill.

The projects represent a tiny fraction of the overall bill’s cost, but they became popular talking points for Republicans lining up in opposition to the measure, which they says is bloated and unfocused. The subway extension was described as “Speaker Pelosi’s pork subway project” even though it is located 50 miles away from her district.

“Now that the two projects that Republicans misled the public about in the House bill have been removed, it is unclear how Republicans will justify their opposition to the American Rescue Plan, which has strong bipartisan support among the public,” Hammill said.

The Senate bill is expected to largely mirror the House-approved package, with the most glaring divergence the Senate’s dropping of language boosting the federal minimum wage to $15 hourly.

Democrats are using special rules that will let them avoid GOP filibusters that would require them to garner an impossible 60 votes to approve the legislation.

Shortly before Pelosi’s office confirmed that funding for the rail project had been removed, Bernice Alaniz of the Santa Clara Valley Transportation Authority in California explained that the $141 million slated for the project would help ensure it keeps moving at the planned schedule.

Construction is set to begin in 2022. Local and state sources are putting up three-quarters of the funding for the extension, among the highest match rates for similar projects across the country.

“It really is an essential transit alternative for a highly congested commute corridor and it serves two large universities — San Jose State and Santa Clara University,” Alaniz said. “So I know some of the criticisms are like, ‘oh, it’s for the high-tech oligarchs.’ But we serve transit dependent workers and we serve a large percentage of students going to these colleges.”

The Trump administration boasted of its efforts to fund the rail project when it approved $125 million in federal matching dollars back in 2019.

“This Administration is focused on expediting infrastructure projects,” said then-Transportation Secretary Elaine Chao. She added that the federal investment would help area residents “benefit from these improvements as quickly as possible.”

Last week, Sen. John Cornyn, R-Texas, described funding to operate and maintain the Seaway International Bridge over the St. Lawrence River in upstate New York as part of an “unrelated liberal wish list.” But Schumer said on the Senate floor that the request for funding for the bridge did not come from him and in fact had come from the Trump administration five months ago. He said revenues needed to maintain the bridge had collapsed with no one using the bridge due to the pandemic.

“I learned about it being in the bill when I read about in in the newspaper,” Schumer said.

The coronavirus bill has hundreds of billions of dollars for schools and colleges, COVID-19 vaccines and testing, mass transit systems, renters and small businesses. It also has money for child care, tax breaks for families with children and assistance for states willing to expand Medicaid coverage for low-income residents.

Find your latest news here at the Hemet & San Jacinto Chronicle

The post Projects GOP tied to Pelosi, Schumer dropped from virus bill appeared first on The Hemet & San Jacinto Chronicle.

As the pandemic continues to affect Americans across the country, many are facing financial hardship.

For homeowners with a Freddie Mac loan, COVID-19 mortgage assistance is available in the form of “forbearance,” which temporarily suspends or reduces your mortgage payment without penalty so you can get back on your feet.

Here is how forbearance works and what happens when it ends:

How do I request forbearance? To request forbearance, you must contact your loan servicer (the company listed on your mortgage statement) who will help you understand your options. Forbearance is available for up to a year, though servicers will typically start you on a shorter forbearance plan and reassess to see if your financial situation has changed.

What happens when forbearance ends? It’s important to remember mortgage forbearance is not the same as mortgage forgiveness and you will have to repay your missed payments. About 30 days before the forbearance plan is scheduled to end, you and your servicer will determine next steps. This could include additional forbearance or a workout option to make up the missed payments. Just remember, you are never required to pay back missed payments in a lump sum if your loan is owned by Freddie Mac.

How does repayment work? Even though you must pay back payments that were missed during forbearance, you have several options for doing so. Additionally, you won’t accrue additional fees, penalties or interest beyond the amounts already scheduled or calculated based on the terms of your mortgage. For example, let’s say you enter into a forbearance agreement of three months. If your monthly mortgage payment is $1,000, you will owe about $3,000 in missed mortgage payments at the end of your forbearance term. Your servicer can help you determine the workout option that works best for you, including:

• Full repayment, where you pay back the missed payments all at once.

• Repayment plans, which allow you to catch up gradually while you are paying your regular monthly payment.

• Payment deferral, which allows you to resume making your normal monthly payment. Your servicer can work with you to leverage alternative ways for you to pay back the missed payments from your forbearance period at a later date and in a manner that is affordable.

• Modification of the loan, which changes the terms of your loan, usually to reduce your original monthly payment amount. Your servicer can help with a modification that might suit your new circumstances.

Additional Information: To stay on track with paying down your loan balance and less interest over the life of the loan, it’s important that you resume your payments as soon as you’re financially able. Keep in mind that while you’re not charged “extra” interest, you won’t be paying down your principal, and the interest will continue to accrue on your unpaid mortgage balance.

For information on forbearance and how to get help with your mortgage, visit My Home by Freddie Mac at myhome.freddiemac.com.

Remember, contacting your servicer is the first step in getting help with your mortgage payments if you are facing financial hardship due to COVID-19 or for other reasons. They can explore available options with you and determine what works best for your circumstances.

Find your latest news here at the Hemet & San Jacinto Chronicle

The post Need Mortgage Relief Due to COVID-19? Here’s What to Know appeared first on The Hemet & San Jacinto Chronicle.

Tariffs avoided with Phase I trade deal between China and the U.S. was one of the catalysts this week. The other was the confidence vote in Boris Johnson signaling a high chance of BREXIT success. These two December wins cleared the path for market success of issues viewed as dogging the global economy. Probability of one or both of these being unsuccessful had many analysts and managers forecasting major headwinds.

This week a series of economic data from November also showed positive trends. Reporting this week was U.S. Housing Starts and U.S. Manufacturing Production. Manufacturing Production is a lagging area, which reflects the output of all factories in the country. It is viewed as a sub-set of industrial output. Manufacturing refers to the total production output from industries that consists of producing goods in factories or plants for a specific time period. Over the last several decades manufacturing has receded and was positioned to come back through repatriation and tax cuts. As for U.S. Housing Starts, they rose more than expected. Permit levels hit twelve (12) year highs. This appears to be driven by the lower Federal Reserve rates that also lowered mortgage rates. This bump may be over though as rates have edged back up in recent weeks.

All of these changes are upping the optimism of a Trump Bump and consumer and corporate confidence. These readings of the 4th quarter will not be available until January. While we are in a wait and see scenario the bull market definitely received a shot in the arm. In the mean-time, the Phase 1 deal is being analyzed to define is this a win or not for the U.S. Many suspect that the deal does not go far enough or if China will keep the agreement.

Markets are bound to end the year higher as tinsel and eggnog get us out of the way. Upcoming economic reports this week include a big one, GDP. This number is leaning to a higher consensus after it was revised upward last month. Forecasts show an increase from 2% to 2.1% this reporting period. Additionally, a USMCA appears to be poised to pass the House. This is the replacement for the North America Fair Trade Agreement (NAFTA) which is an agreement between Canada, Mexico and the United States. USMCA stands for U.S., Mexico, Canada Agreement. This is another trade agreement that has been reworked to benefit the U.S. One more present under the tree.

We will be watching the leading economic indicators to gauge if this was the bottom and if the economy is turning up or if there is another leg down come January. For now, enjoy wrapping presents and reaching out to loved ones as I am right now. Here is to wishing you all a very Merry Christmas and Happy Holidays.

If you have questions on a particular company or investment and would like our feedback, contact us at my email below. Our team will research and respond to you with our recommendation and opinion.

Andrew F. Kotyuk, CIMA* is CEO and Principal of Alpha Wealth Management LLC. For questions or investment topics please email me afkotyuk@alpha-wealth.com.

Find your latest news here at the Hemet & San Jacinto Chronicle

Search: End of Year Presents

The post End of Year Presents appeared first on The Hemet & San Jacinto Chronicle.

A trade deal done? Phase One underway and stated as very substantial. Wait, China would like additional talks before signing it. Markets surged, then gave back some and settled down. Details have been slowly coming out as have comments and tweets.

The deal described as Phase One, includes China buying 40-50 billion dollars of US agriculture products and their willingness to address intellectual property concerns raised by the United States. In return, the United States agrees to hold off on tariff hikes scheduled this week. It seems Phase One will go into effect over the next three (3) months. Wall Street is not sure of this agreement though.

Doubt has emerged on Wall Street around the tentative agreement with China. It seems that while comments from around the US were triumphant, the Chinese remarks were far more muted. The deal, while substantive is still subject to documentation. If an agreement is not cemented by the tariff date in December, then an increase in tariffs will go into effect. UBS’ Art Cashin doesn’t think this gets us to Christmas.

What is clear is that delisting Chinese companies has gained traction. A congressional action to force foreign accounting and audit firms to provide transparency is the catalyst for this. The United States allows many foreign companies to list on the US stock exchanges, but they have to meet all the same rules and regulations as do the American firms. There have been a few bad actors who have refused to provide transparency behind the audits and accounting, the Chinese on of them. Many believe there is Chinese government involvement and control with these firms, which is the reason they hide this information. There has been no clear progress with regulators.

While excitement around the deal is being tampered, the third-quarter earning season has kicked off, and there is some optimism for this. Many investors hope this is not the third recession in as many quarters.

According to FactSet, at 4.6%, earnings decline is in order compared to last year at this time. The clock is ticking on BREXIT also. Prime Minister Johnson is determined to exit one way or the other. Recent news shows a new possibility of an agreement being formed, a path forward that didn’t exist before. The end of the month will also bring Federal Reserves Chairman Powell’s announcement to lower rates again or stand pat.

How do you play this and the other events this month? I haven’t changed my position on this market. The data shows a slowdown and the leading indicators continue to point down.

We thus far have eight (8) months of data for the year. Yes, the consumer sentiment is strong and I believe they will stay strong, resulting in a minimal recession: touch and go. I have to follow the data on this. The good news is that Warren Buffet and Berkshire Hathaway sold more investments than they purchased this year and are sitting on $122 billion in cash.

If you have questions on a particular company or investment and would like our feedback, contact us at the email below. Our team will research and respond to you with our recommendations and opinion.

Andrew F. Kotyuk, CIMA* is CEO and Principal of Alpha Wealth Management LLC

For questions or investment topics, please email me afkotyuk@alpha-wealth.com.

Find your latest news here at the Hemet & San Jacinto Chronicle

Search: What would buffet do

The post WHAT WOULD BUFFET DO? appeared first on The Hemet & San Jacinto Chronicle.

Today the City of San Jacinto will present the State of the City held at the Soboba Casino Resort Center. Mayor Russ Utz will give his first address since taking a seat on Council in 2016. This year has marked many milestones for the City. Energy and excitement on the many positive directions will surely be felt. 

San Jacinto Power celebrated a 1-year anniversary. After launching in April 2018, it has saved City taxpayers millions. In 2016, I had the pleasure of evolving the concept into action as the City and residents entered into an agreement to form the organization. Since its start, several cities and the County have striven to join, following San Jacinto’s lead. Benefits from this new organization owned by the residents provide lower rates by at least 3% a year and higher buyback rates on solar panel excess productivity. In addition, the program provides an additional revenue stream to the City.

Over the last 12 months, there has also been a change in choices of retail. Aldi’s opened, Starbuck’s on San Jacinto Avenue is operating and the Mason Jar debuted. Sonic and Weinerschnitzel are moving to development. On a larger scale, several retail centers were approved and are working their way to construction. Not in the City but closely partnered, the new Soboba Casino Resort celebrated their Grand Opening. San Jacinto is once again attracting jobs and investments.  

Our City is transforming in several ways that provide more quality in the way we live. Paving of San Jacinto Avenue and Esplanade Avenue is the most obvious. Grants awarded allowed sidewalks to be constructed and repaired, and bike lanes to be added to the City’s trail corridors. If you come to City Hall, see Public Works around the City, attend the 4th of July Parade and Celebration or made it to Kool August Nights, you will notice a higher level of customer care, support and a down to earth community feel. Starting with our City Manager, Rob Johnson, the San Jacinto team is on the move and attracting creative, talented and focused team members from around the County. 

I would be amiss not to mention the new housing being built around the City. Our quality builders have been busy constructing new state of the art homes with modern amenities. San Jacinto recently became the 3rd fastest growing City in Riverside County. Our hometown is attracting quality residents from San Diego, Orange and L.A. Many good families are proud to call this City and Valley home. 

Proud doesn’t describe the feelings I have to see my City change. The dominoes are just starting to fall.  With the right team representing the City, with new home construction and population increasing, and as developers build restaurants and retail stores based on the increased population, we are just at the tip of an iceberg. There is more to come and now you understand our hashtag #GoSanJacinto. 

If you have questions on a particular company or investment and would like our feedback, contact us at my email below. Our team will research and respond to you with our recommendation and opinion.   

Andrew F. Kotyuk, CIMA* is CEO and Principal of Alpha Wealth Management LLCFor questions or investment topics, please email me afkotyuk@alpha-wealth.com.

Find your latest news here at the Hemet & San Jacinto Chronicle

Search: State of the City

The post State of the City appeared first on The Hemet & San Jacinto Chronicle.

Wall Street doesn’t quite work that way. There are levels, and they do mean something to your portfolio. It would be difficult for anyone to say they never heard of the S&P500, the Dow Jones, or the NASDAQ. They may not know what they mean, and if you don’t, here is your chance to understand them and what levels mean. With a little understanding, you will be better prepared when your portfolio level’s up.

So, let’s start with the indices mentioned above, the S&P500, the Dow Jones and NASDAQ. These are certain groups of businesses, companies, or categories of the economy used as a measurement. Think of them as a thermometer. The S&P500 is a thermometer of the 500 largest publicly-traded companies in the U.S, where the Dow Jones represents the 30 largest industrial companies in the U.S and lastly the NASDAQ reflecting over 3,300 companies listed on the NASDAQ exchange, from all countries. When the health of these companies goes up, the index representing goes up or vice versa downward. It is an easy gauge to understand the health of the top 500 companies, the top 30 industrial or 3,300 listed companies. Or your portfolio more importantly.

So, when you hear that the S&P500 or one of the others are hitting all-time highs, it means that the companies combined are selling at a premium and the markets are expecting them to perform even better than before, increasing their value. For the last twelve months, for example, the S&P500 has not been able to go to new highs. It would trade up to the same high point (the ceiling) and couldn’t break through or level up. This is telling us the market thinks the companies are valued too richly, and there are no buyers at a higher price. Now when the index makes a breakthrough and makes new highs, the previous ceiling becomes the floor. It is named as such because the same resistance it took to go higher is now the resistance for the market to go lower.

Like a game. You cleared a level. The market is not like a game, and yes, you can break through and fall several levels back down.
Why is this relevant? The indices or markets have broken through a tough level of resistance lately making new highs and a new floor. For your portfolio, this means that for now, the bull market is continuing and valuations are at all-time highs. A strategy some have is to buy when the market level’s up since it is now technically on the new floor of the new level and the new ceiling hasn’t been found yet, expecting the market to go higher. Other’s place computer orders to sell if and when the market drops through the new floor to take profits and protect from falling to the next floor. I have recommended both depending on the investor.

If the market has leveled up, most likely so has your portfolio. Train yourself at the wealth game.
Formulate your game to continue winning and knowing when you are by simply reading headlines on the markets. After all, you can lose. Choose one index, get to know its highest price, and monitor the market, push it higher or bounce back down off it. Once it finds the next ceiling, it won’t stay there long.
At the same time, see how your portfolio is behaving. Be a winning Pac Man.

Andrew F. Kotyuk, CIMA* is CEO and Principal of Alpha Wealth Management LLC, send questions or comments to afkotyuk@alpha-wealth.com.

The post Level Up Your Portfolio appeared first on The Hemet & San Jacinto Chronicle.