FinanceMaster

  By Oliver Rahman Ever wonder why almost all respectable institutions and legendary investors like warren buffet tell you to invest in ETFs (Exchange traded funds) with disposable income after expenses? The reason why is because it works! Investing in simple ETFs like $QQQ and $SPY (which return on average 8-10% per year) could potentially generate millions over the span of a few decades, it all depends on how much you put in at the beginning. For instance, lets run a simulation: Imagine you are 20 years old, and you have $1000 in your savings and can afford to spend an additional $250 per month into ETFs. By the time you're 67 (the "government defined" retirement age*) you could potentially have $2,014,373! It can get even crazier the more you are able to put in per month. For instance, if you put $500 every month you would have 3.971 million! Even accounting for likely inflation in the future you are still left with millions. Yes, this won't make you rich overni...

By Oliver Rahman Michael Burry saw the housing bubble as early as 2005! He decided to put a majority of his hedge funds capital (scion capital) into something called credit default swaps. What exactly are credit default swaps though? They sound complicated but aren't really. Imagine a company (let's say Netflix) issues 1 million dollars' worth of bonds to raise capital. Investor X purchases 1 million dollars' worth of bonds from Netflix. Another investor, investor Y, sees that Netflix might fail to pay interest or principal on the bond) meaning investor x would lose money. So, Investor Y goes to an insurance company to bet against investor X's bonds. Investor Y says he will pay a premium each year of $10,000 (meaning he pays the insurance company $10,000 each year) on the bond every year the bonds don't default. In exchange, the insurance company agrees to pay investor Y difference of the bond value if the bonds default. Now, let's say Netflix defaults on it...

By Oliver Rahman T he fed cut rates today again at 2:00 pm, which should be seen as a good thing to many investors. However, Jerome Powell (the fed chair) also said he would not be cutting rates as many times next year, which caused stocks to fall today after the announcement. This is because the general market thought the fed would continue to cut interest rates over time at a gradual pace, not slow down. However, I feel like it has been overblown, considering most major indexes are down 3%. It has always been proven that not selling and continuing to buy more shares during tips is a more successful strategy than selling! So, continue to hold! If you like these posts, consider subscribing to the newsletter!

By Oliver Rahman  Rolls-Royce has shown strong performance recently, with its stock surging and reaching a valuation of £50 billion ($63 billion) . They reported an underlying operating profit of £1.6 billion and a return on capital of 11.3% for 2023. All of this concerned, will the momentum of their stock continue into the future? What's caused the increase? The increases have been caused by the increasing demand of long-haul airliners. Rolls Royce (along with their fancy cars) are significantly important in making jet engines for these planes. This has caused the stock to rally over 600% in the past 2 years. They are also a leading player in the defense and aerospace industries and are adapting to the new futuristic world that awaits us. What are they doing for the future? Rolls Royce recently got a $1 billion dollar investment from Qatar to create more clean energy solutions. Rolls-Royce has partnered with the Qatar Foundation to create a center for climate-tech innovati...

By Oliver Rahman When I first started investing in ETFs (an investment fund that makes up multiple stocks or other assets) I saw ones that were leveraged and ones that were not. I put some of my money (thankfully) into QQQ (which tracks the NASDAQ) and not leveraged ETFs like TQQQ (which tracks the NASDAQ at 3x leverage). You might be thinking "what's so wrong with TQQQ? After all, if I put $100 into the TQQQ long term my profits would by 3x!". It's true that you CAN make 3x more with leveraged, but only if you hold it for less than a month, here's why: Imagine you invested $100 into both ETFs over the span of a couple days: -1% QQQ: $99 TQQ 3x: $97 +3% QQQ: $101.97 TQQQ 3x: $105.73 -2% QQQ: $99.93 TQQQ 3x: $99.38 With the leveraged ETF you are already 0.55% down in 3 days! Compound that over a year and your losses would be huge (QQQ: $31.65, TQQ: $3.44). Now, I did say earlier that if you held these for less than a month you could potentially gain more than holdi...