💸Biggest Mistakes Traders & DIY Investors Make

What’s on the Menu 🍴

Even though the stock market is closed today for Martin Luther King, Jr. Day…

We’re still dialed into the markets since we’ve got a busy earnings calendar.

Also, the crypto markets are buzzing after the ETF approvals, giving price a volatile jolt.

Let’s dive in:

• What To Watch This Week 👀

• Biggest Money Mistakes Traders & DIY Investors Make 💸

• Crypto Corner: Top News & Narratives For Monday ₿

Today’s newsletter is a 5 minute read.

 What To Watch This Week 👀 

Last week we had long awaited Bitcoin ETF approvals, CPI data, bank earnings, and energy market volatility which kept investors hearts racing.

This week brings a lighter calendar with US markets closed on Monday, but there’s still plenty of potential for excitement.

Short term government bond yields continued their downward trajectory last week, which could fuel further risk taking in markets.

In fact, the yield curve has gone from deeply inverted (a sign of possible recession) to nearly flat:

We’ll be keeping a close eye on crypto ETFs & stocks as one proxy for risk taking.

Bitcoin pulled back about 8% after the ETF launches, but Ethereum showed some relative strength. Crypto mining stocks have been especially volatile lately!

Banking is a key sector to watch this week as more banks & brokerages report their Q4 earnings.

Big names on the earnings calendar this week include:

• Goldman Sachs

• Morgan Stanley

• Charles Schwab

• Ally Bank

• KeyBank

• Discover

• US Bancorp

• Truist

• Alcoa

We’ll also get retail sales data from the UK and US, as well as inflation data from the UK, Canada, and Japan.

Markets breathed a sign of relief as the incumbent DPP party in Taiwan held on to the presidency over the weekend.

However, geopolitical tensions remain high in the Middle East after America & Britain carried out airstrikes against Houthi targets in retaliation for ship attacks in the Suez Canal.

We’ll have to keep close watch on energy prices as well as the following assets & sectors:

📈 Rising Recently:

• Uranium (SRUUF / YCA / Uranium futures)

• Software & Internet (IGV / FDN / QQQ)

• Semis (SOXX / NVDA)

• Cannabis (MSOS)

• Homebuilders (XHB)

📉 Falling Recently:

• Airlines (JETS)

• Solar & Cleantech (TAN / PBW)

• Crypto Miners (WGMI)

Biggest Money Mistakes Traders &
DIY Investors Make 💸

In our Wealth Building Community, we talk to a lot of traders & DIY investors that work hard to manage their own money.

As savvy is this group is about stock and crypto markets, they may have a lot of gaps in their financial plans that need to be filled.

It’s very easy to go all-in on trading and investing, after-all, it’s what helps you actually grow your money.

But, when you look at how a financial planner does a comprehensive financial plan, you realize how many topics get touched on and how money leaks are abound.

Here are the biggest money mistakes traders & DIY investors make, and how much money they can cost you over your lifetime.

1. Focusing on short-term trading before having a long-term investing strategy: Short-term trading (moving in and out of positions over days, weeks or months) is often the first place people go to try to increase their wealth. But often, it comes at a price.

   It’s certainly the “fun” part of the markets, but, it’s also harder to become profitable vs. investing. Ever heard the saying “90% of traders lose money?” We need capital compounding safely over the long run, and long-term investing should be secured for your future goals before capital goes into short-term trading.

2. No use of tax-deferred or tax-advantaged accounts: Believe it or not, there are a lot of people who are afraid to use retirement accounts because they don’t want to “lock up their money”. But, these accounts are essential for having a wealth building tax-strategy.

   The money isn’t actually “locked up” at all. There ARE ways to make the money accessible with the right plan and penalty exception. Worst case, you pay the tax penalty for withdrawing the money early (not ideal, but, it’s accessible).

3. No tax strategy implemented: Taxes are your biggest expense over your lifetime. So, it’s important to have a tax plan in place that will mitigate your “cost” legally.

   Proper tax planning may help you save hundreds of dollars over your lifetime.

   You can plan for things like:

   1. Tax savings over your lifetime via the proper retirement account

   2. Tax savings on Real Estate

   3. Maximizing tax credits and deductions via your adjusted gross income

   4. Minimizing estate taxes

   5. Maximizing returns and limiting taxation on stock based compensation (ESPPs, ISOs, NQSOs, RSUs, etc)

   6. Minimizing taxes for business owners

   So, it’s clear to see that a lot can be done on the tax side… and it can go missed because it’s not easily understood.

4. No asset protection strategy: It doesn’t matter who you are, a lawsuit can happen at any time.

   There are plenty of stories of everyday people getting in a bad car accident and being sued for millions more than their insurance could pay. Business owners have even more liability.

   So you need a proper plan for insurance AND asset protection.

   In the U.S. one of the best forms of asset protection is your qualified retirement accounts (401(k), 457(b) or 403(b)) which provide protection under Federal law, and IRAs which provide protection via your state laws (Individual Retirement Accounts).

   Look into Umbrella insurance. You have to carry a minimum liability coverage on your car insurance plan, but, it’s worth having. You also want to do what you can to properly use LLC’s to separate business and personal assets.

The biggest takeaway is to remember that a healthy money life goes WAY beyond just investing and being in tune with the markets.

You want to create wealth, protect the wealth and also manage the wealth!

If you’re unsure where to start with filling money gaps you may have in your life, we have the Wealth Master Plan Training Program that walks you through how to build a comprehensive money plan.

You get access to this training as a member of the Wealth Building Community along with a 24/7 chat room to ask questions to all of our Daily Dough contributors!

Crypto Corner: Top News &
Narratives For Monday ₿

1. Rollups Rev Up Crypto Game - The crypto landscape is abuzz as rollups technology emerges as a game-changer, poised to revolutionize blockchain efficiency by 2024. These rollups, innovative layers that process transactions outside the main Ethereum blockchain before bundling them back to the main chain, are crucial in tackling the notorious scalability and speed challenges that have long plagued blockchain networks. Meanwhile, the corporate world's embrace of Bitcoin signals a seismic shift in business strategy. Companies are increasingly integrating Bitcoin into their operations, from treasury management to payment solutions, riding the wave of digital transformation.

2. Miners Brace for Bitcoin Halving - Companies like Riot, Terawulf, and Cleanspark are preparing for the upcoming Bitcoin halving. Coinshares reports that this event, expected to impact Bitcoin's value and mining profitability, is causing a buzz in the mining industry, leading to strategic adjustments.

3. Tether Takes the Throne - Tether's not just playing the crypto game; it's changing the rules. With a 21-point leap in market share and a whopping supply crossing 100 billion coins in 2023, it's clear Tether's becoming the go-to guy in the stablecoin squad.

4. BlackRock's Bitcoin ETF Bonanza - BlackRock's spot Bitcoin ETF debut was nothing short of a blockbuster, raking in $500 million in a jaw-dropping two days. This investor frenzy is a neon sign of the growing hunger for crypto in the high-stakes world of institutional investment.

5. Coinbase Vs. SEC - Brace for a pivotal week in the crypto sphere as Coinbase stands toe-to-toe with the SEC in a landmark battle over crypto asset classification and the broader implications for decentralized finance. This tussle centers on defining the fine line between securities and cryptocurrencies, a debate that could reshape the regulatory framework for digital assets.

Key Takeaways

In a week where the crypto world is spinning with innovation, regulation face-offs, and market curveballs, savvy investors should be taking notes.

From the techie revolution of rollups to Tether's triumph, the landscape is ripe with hints of what's next.

The Bitcoin halving hype is more than just buzz; it's a pivot point for value and viability in the mining universe. BlackRock's ETF frenzy isn't just about big bucks; it's a green light for crypto's mainstream marathon.

And as for Coinbase's regulatory rumble and the token unlock saga, they're not just headlines; they're harbingers of a shifting tide in the crypto ecosystem.

Delicious Bites 😋

• BlackRock Drains 13 Days’ BTC Worth, Triggering Supply Crunch Worries

• Who are the Best & Worst CEOs?

• Why are Americans frustrated with the U.S. economy?

• AI keeps laying off humans

• China Set To Lose ‘Top Spot’ As #1 Exporter To US

Food For Thought 🧠

"The greatest weapon against stress is our
ability to choose one thought over another.”
- William James

DISCLAIMER: We are not investment advisors, and this content is for educational purposes only. We don’t offer financial, legal, or tax advice. Nothing we say is a recommendation to buy or sell any assets. Trading and investing are extremely risky, so please be careful and do your own research.