Monday, January 22nd, 2024

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Just five companies, all heavily involved with AI, have boosted the major averages into bull market territory.

One of those stocks, Nvidia, was up 189% in the first half alone.

Nvidia is a legendary home run, but our Weiss Ratings AI specialist, Jon Markman, has homed in on one high-rated AI stock in particular.

It’s our pick for The #1 AI Stock of 2024 and Beyond

Hello Stock Traders!

The world of penny stocks, for the uninitiated, can feel like a thrilling (and, yes, sometimes nauseating) roller coaster ride. These low-priced stock nuggets, like the novellas of the investment world, hold the promise of quick riches but come with their own fair share of plot twists and cliffhangers. But before you strap in, let’s shed some light on this intriguing, occasionally treacherous alleyway of the financial market.

Penny stocks, typically trading for less than $5 (though whispers of some reaching mere pennies still linger), can be found on both the bustling avenues of major exchanges like the NYSE and the hidden paths of the over-the-counter (OTC) market. Think of the major exchanges as well-lit shopping districts, while the OTC resembles a charming, yet slightly shady, bazaar. Both offer penny stock gems, but the OTC comes with its own set of risks, like navigating alleys without proper maps or streetlights.

But why does a company get relegated to penny stock status? Well, unlike the IPO’s aiming for a glamorous debut, penny stocks often represent companies battling challenges. Think fledgling biomedical firms with more dreams than profits, or entities with accounting practices that wouldn’t pass a magician’s smoke and mirrors test. It’s not a path they choose, but rather a consequence of missteps or financial hurdles that push them into the penny stock realm.

Now, within this world, there’s a hierarchy of sorts. On the “safer” end, we have stocks under $5 but still gracing the major exchanges. They offer better liquidity and transparency, like having friendly shopkeepers who offer detailed product information.

Then, there are the sub-$1 stocks on these exchanges, the darlings of volatility, where information can be as elusive as a desert mirage. They’re like the market’s equivalent of extreme sports – exhilarating but undeniably risky.

Going deeper into the OTC, we encounter the OTCQX, a platform for established, financially transparent companies, akin to a well-regulated market within the bazaar. Then comes the OTCQB, offering a platform for smaller companies with some regulatory oversight, like a market with friendly vendors but occasional pickpockets lurking around.

Finally, there’s the wild frontier of the OTC Pink tier, home to companies that wouldn’t meet the stricter standards of the major exchanges. Imagine this as a market bustling with whispers of hidden treasures, but also the potential for encountering con artists.

Now, the heart of the matter – volatility. Penny stocks are like the market’s temperamental toddlers, prone to sudden tantrums and bursts of joy. This volatility stems from factors like low liquidity, speculation, and limited information. News and rumors become their favorite toys, sending them on price-swinging sprees in either direction.

So, should you dive into this world? Well, like any adventure, it comes with both potential rewards and perils. Penny stocks offer avenues for diversification, learning, and even uncovering undervalued gems. But they also pose serious risks, from extreme volatility to potential fraud.

To navigate this tricky terrain, a strategic approach is essential. Treat every investment like a carefully chosen backpack for your financial journey. Pack it with risk management, thorough due diligence, and constant market awareness. Be wary of hyped-up stocks, diversify your portfolio, and never stop learning the market’s ever-changing language.

In the end, the world of penny stocks is not for the faint of heart. It’s a thrilling, sometimes treacherous adventure best embarked upon with knowledge, caution, and a healthy dose of adventurous spirit. Remember, it’s not about finding the next “get rich quick” scheme, but about navigating this unique market with your eyes wide open and your wits sharp. 

So, if you’re ready to explore the glimmer and grit of this financial alleyway, buckle up (metaphorically, of course!), do your research, and embark on the penny stock adventure with a plan – and a bit of daring. The market might just surprise you with its hidden treasures.

–James

Up next: After a rough 2023, the housing market is swinging for the fences in 2024, making housing stocks a potential grand slam for savvy investors.

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The gloves are off, and the housing market is stepping up to the plate. After a rocky season in 2023, fueled by soaring mortgage rates and shaky consumer confidence, the whispers of a comeback are getting louder. And as the sun shines on 2024, we at believe housing stocks are poised to deliver a grand slam for savvy investors.

Hold your horses, though. This isn’t just wishful thinking. We’re basing our optimism on a solid lineup of recent data points that suggest the tide is turning. Just think of them as pre-game warm-ups – promising signs that the market is ready to swing for the fences.

Remember that brutal homebuilder sentiment last year? It seemed like everyone had packed up their tools and gone home. But guess what? January saw a record leap in builder confidence, the biggest since the pandemic hit.

Why the sudden pep in their step? Falling mortgage rates, my friend. As borrowing costs eased, homebuyers started buzzing again, and builders took notice. They’re no longer sitting on the bench, they’re gearing up for action.

And here’s another stat that deserves a high five: January’s mortgage applications spiked to their highest level since summer 2023. That’s right – people are itching to buy. It’s like the housing market just announced a free ice cream stand in the backyard.

And to top it off, consumer sentiment bounced back from its summer slump, hitting its highest point since 2021. Think of it as the stadium filling up with enthusiastic fans, all rooting for a home run rally.

But let’s not forget the cherry on top – the price of existing homes. December saw a 4.4% increase in the median price, marking the latest chapter in a heartwarming comeback story. It’s like after a rough winter, spring flowers are finally starting to peek through the cracks.

So, if you’re wondering where to park your investment dollars this year, consider this: the S&P 500’s Real Estate sector is currently trading at a significant discount, well below its historical average. In simpler terms, it’s like finding a diamond ring in a bargain bin.

And with sales and earnings projected to rise sharply in 2024, it’s no surprise we’re bullish on housing stocks. We’re talking multiple expansion and profit growth so juicy, you’ll need a napkin.

Of course, not all stocks are created equal. While the entire sector shows promise, some individual players have the potential to steal the show. But that’s a story for another day. Trust us, we’ve got the scouting report ready, and believe me, it’s a roster full of MVP contenders.

The housing market is on the comeback trail, and with it, housing stocks are poised to hit a homer this year. Don’t miss out on this grand slam opportunity. Stay tuned, because in our next installment, we’ll unveil our picks for the top homer hitters.

Remember, investing is like a baseball game – there’s risk and reward, strategy and a bit of luck involved. But when the market throws you a curveball, sometimes the best swing is a well-informed one. And that’s where we come in. 

Disclaimer:

Trading foreign exchange, stocks, options, or futures on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade, you should carefully consider your objectives, financial situation, needs and level of experience.

This newsletter provides general information that does not take into account your objectives, financial situation or needs. The content of this newsletter or our website must not be construed as personal advice. COE Media is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation.

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