šŸ’° Maniac Minute: Are We Reliving the Dot-Com Boom?

November wrapped up as the best month for major indices in over a year. If December can keep the sleigh on course...

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Good morning, Maniacs!

I hope everyone enjoyed the long weekendā€”now cue the Christmas music as we cheer for a Santa rally! šŸŽ…šŸ“ˆ

November wrapped up as the best month for major indices in over a year. If December can keep the sleigh on course, we might just unwrap our first back-to-back 20%+ annual gains since the dot-com boom.

Let's dive in!

Market Recap šŸ“ˆ

Stocks climbed to record highs in a holiday-shortened weekā€”thanks to the strongest Black Friday session since 2012. Looks like investors were in a buying mood both at the mall and on Wall Street!

The market shrugged off tariff concerns after Mexican President Claudia Sheinbaum signaled easing tensions following talks with President-elect Trump.

Meanwhile, Fed minutes hinted that gradual rate cuts may continue if inflation and labor data stay on the nice list, boosting hopes for a 0.25% cut on December 18th.

Oil prices slid as a ceasefire reduced geopolitical risk premiums, even though supply remains ample.

Bitcoin, however, hit pause just shy of $100kā€”a psychological milestone that traders are watching closely heading into December.

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Winners & Losers šŸš€

The market had its ups and downs this weekā€”let's see who soared and who stumbled:

Winners

1. Hims & Hers Health ($HIMS) ā€“ Market Cap: $7.0B (+27.2%)

Hims & Hers shares got a healthy boost after the FDAā€™s new chief nominee, Marty Makary, was announced. Makary's ties to a business similar to Himsā€”that sells compounded GLP-1 weight loss drugsā€”signal a potentially favorable regulatory environment. Investors celebrated the news, pushing the stock further into a record-breaking year.

2. SoundHound AI ($SOUN) ā€“ Market Cap: $3.4B (+12.8%)

SoundHound AI is making itself heard on Wall Street. The voice tech company's stock soared nearly 19% on Fridayā€”despite no clear catalystā€”hitting a two-year high. SoundHound has yet to reach profitability, but investors are betting that its growth trajectory and industry expansion will strike the right balance in the years ahead.

3. Peloton Interactive ($PTON) ā€“ Market Cap: $3.9B (+8.4%)

Peloton pedaled to a new 52-week high, climbing 280% from its low of $2.70 earlier this year. A combination of improving earnings, retail expansion at Costco, and positive operating cash flow has analysts taking note and boosting their price targets. Peloton's turnaround momentum keeps climbing.

Losers

1. Dell Technologies ($DELL) ā€“ Market Cap: $87.3B (-11.5%)

Dellā€™s stock hit a hard reset this week following a mixed Q3 report. While its Infrastructure Solutions Group posted record sales (up 34%), weak PC demand weighed on results. With softer guidance for next quarter, investors are waiting to see if AI growth can reboot Dellā€™s drive.

2. Dick's Sporting Goods ($DKS) ā€“ Market Cap: $16.9B (-1.4%)

Dickā€™s Sporting Goods scored big with strong Q3 earnings and raised its full-year outlook for the third time. However, concerns over a shortened holiday shopping season and flat shrinkage (shoplifting losses) have investors playing defense. Shares dipped slightly after the earnings call but remain up 41% year-to-date.

Dividend Investing Series: Part 6

Thus far, weā€™ve discussed the ins and outs of dividendsā€”from understanding yields to reinvesting payouts. Now, let's talk about how to put it all together by building a diversified dividend portfolio that balances income with growth.

Why Diversification Matters

Spread the Risk: Just like any investment strategy, diversification is key in dividend investing. Relying on a single stock or sector for dividends can expose you to unnecessary risk. Companies can cut or suspend dividends, and industries can face downturns.

Sector Allocation

Mix It Up: Every sector performs differently under various economic conditions. For example:

  • Utilities: Often offer stable dividends but may have limited growth.

  • Technology: May have lower yields but higher growth potential.

  • Consumer Staples: Provide consistent dividends, even in economic downturns.

Aim to include dividend-paying stocks from multiple sectors to cushion against volatility in any one area.

If picking individual stocks feels daunting, dividend-focused ETFs can provide immediate diversification across companies and sectors.

Balancing Yield and Growth

Quality Over Quantity: High dividend yields can be tempting but may indicate underlying issues. Balance your portfolio with a mix of:

  • High-Yield Stocks: Provide immediate income, but watch for sustainability.

  • Dividend Growers: Companies with lower yields now but a strong history of increasing dividends.

International Exposure

Go Global: Consider including foreign dividend-paying stocks to enhance diversification. Be mindful of currency risks and tax implications, though.

Mind the Costs

Fees Matter: Pay attention to transaction fees, especially if you're investing smaller amounts or frequently reinvesting dividends. Opt for low or no-cost brokerage when possible.

Bottom Line: Building a diversified dividend portfolio is about more than chasing the highest yields. It's about creating a balanced mix of income and growth opportunities while managing risk (i.e. donā€™t put all your eggsā€”or dividendsā€”in one basket).

By spreading your investments across different sectors, geographies, and types of dividend-paying companies, you set the stage for more stable and sustainable returns.

Worth The Read šŸ“š

šŸ’° Securities-backed loans let you tap into your investment portfolio without selling your assets. Is it the savvy move for your next big project?

šŸŒ Japan and China dumped record amounts of U.S. Treasuries ahead of Trump's victory. What does this mean for the world's financial balance?

šŸ“ˆ U.S. households are more optimistic than ever, with 51.4% believing stock prices will soar. Is this the dawn of a new bull market or a sign of overconfidence?

šŸ¤” The IRS waived required minimum distributions from inherited IRAs for 2024. Should you take advantage now or could it cost you later?

āœˆļø American Airlines introduces beeping tech to shame line cutters. Will this new gadget make your travel smoother or noisier?

šŸ›ļø Shoppers plan to boost holiday spending by 8%, favoring experiences over gifts. Is the "experience economy" taking over this season?

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The Week Ahead šŸ”

This week, we'll get a fresh batch of PMI reportsā€”short for Purchasing Managersā€™ Indexā€”shedding light on the health of manufacturing and services sectors. Plus, Fridayā€™s unemployment rate will provide the latest check on the Fedā€™s "soft landing" ambitions.

Monday

  • ISM manufacturing PMI (est. 48.8)

Tuesday

  • Earnings from Salesforce

  • Job openings (est. 7.49 million)

Wednesday

  • Earnings from Chewy and GameStop

  • ISM services PMI (est. 55.5)

     

Thursday

  • Earnings from Lululemon, DocuSign, and Ulta

  • Initial jobless claims (est. 220k)

Friday

  • Non farm payrolls (est. 183k)

  • Unemployment rate (est. 4.1%)

  • December consumer sentiment (est. 72.9)

Thatā€™s a wrap! Hope you enjoyed the Maniac Minuteā€”weā€™ll see you next Monday with all the market insights and money tips you need to stay ahead.

Keep stacking,
The Money Maniac šŸ’ø

P.S. Got feedback, burning questions, or just want to say hi? Feel free to reply directly to this email!

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DISCLAIMER: The information provided in this newsletter is for informational purposes only and should not be construed as financial advice or a solicitation to buy or sell any assets. All opinions expressed are those of the author and are subject to change without notice. Please do your own research or consult with a licensed professional before making any investment decisions.

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