Tariffs: What Are They? How Are They Affecting My Portfolio?

What are tariffs? How do they affect the stock market and investors?

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It’s important to get a simple understanding of how tariffs are affecting the stock market and our economy. Tariffs are hurting many stock investors and it’s important to get an understanding of what they are doing.

A Tariff is a tax or duty to be paid on a particular class of imports or exports.

Simply put, a tariff is a tax on an import/export. When the money is collected they are known as duties or levies. Tariffs are usually charged as a percentage of a “transaction price”. These percentages vary from country to country. Analysis done by Greg Daco of Oxford University, discovered U.S., Japan, Europe and Canada charge a tariff percentage of 3.1% and below whereas Mexico and China reach to 4%.

Read: How Entrepreneurs Can stay Ahead Of A Slow Growing Economy.

Tariffs raise our government revenue and decrease pressure on our competitors. However, U.S. and China are two of world’s two largest economies and economists are declaring that China can stand to “hold their breath longer” in the trade-off than America.

The biggest concern lies with our fragile economy and corporate businesses. The “tax war” is effecting some of America’s most important businesses; soybeans farms, automobile manufacturers, steel and aluminum shipments, etc.

Rod Sides of Deloitte (U.S.) recently stated,

Consumers are feeling good, but if they see prices start going up, there could be a backlash. The average consumer hasn’t yet internalized what the tariffs mean to them and haven’t seen the prices rise.

Read: Bearish Behavior: How To React When Your Portfolio Is Plunging.

The tariffs can contribute to price changes of imports/exports which may contribute to the delay of corporate investments and new projects. This has investors concerned for price changes on the stock markets and America’s wealth. The tariffs don’t only effect our portfolios as investors, but this also affects the global economy. The world is watching every move President Trump makes and how he responds to China. The pressure is on.

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Information Attained:

Finance.Yahoo.com, InvestingAnswers.com, CBSNews.com

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Is Etsy Inc. Making Progress?

ETSY (Etsy Inc.,$42.43) is an e-commerce marketplace that caters to hand-made crafts and gifts for third parties to sell from. Similar to eBay (eBay Inc., $37.56), ETSY has made substantial growth the past few weeks and with a new management team, they are planning to make changes within the company.

Though some long-term investors are not amused by their history of high SGA costs, other investors see a bullish outlook on future gains. ETSY is reaching its 52 weeks high at $44.71.

(Chart screenshot from NASDAQ)

On June 14th, 2017, ETSY added to the revenue by raising their seller transaction fees from 3.5% to 5%. Shareholders are anticipating higher cash flow and more business from this decision. ETSY has also turned heads their way from opening their business to European markets- DaWanda, a company based in Germany. DaWanda is closing their business and passing their current customers to ETSY.

Investors compare ETSY to other, larger corporations such as eBay and Amazon Handmade (AMZN, $1,717.14 ), stock analysts are currently claiming ETSY as a buy.

Please see About Me & Disclaimer for additional information about Black Tea.

Information Attained: Etsy.com, MSN.com/Money, Yahoo!Finance, StockTwits.com,

Why You Need To Keep Reading SEC Filings

SEC stands for Security Exchange Commission, it’s a place where most businesses submit company reports; 10-Ks, 8-Ks, S-1 forums, and etc. It’s often you will find companies praising about the revenue they made in their recent quarter or profits gained from a particular project, but it’s crucial to know the companies overall progress on their balance sheet.

Is the company showing consistency? Are they keeping profits high and production costs low? Are they truthful about their paid taxes? You can find all of this information on the SEC.gov.

Though earnings calls have their own matter of importance, viewing reports on the SEC will give you accurate information you can copy and save for later. You may also find additional background information on the CEO of the company (criminal record or education) on the Schedule 13D forum. Catch up and read our recent post about Investing Secrets here.

 

Investors also visit SEC.gov to view S-1 forums for additional information on IPOs. Don’t invest based on what your friends told you, visit the main source and find out for yourself. Though companies hold their own annual/quarterly statements, these reports can be very “colorful” and have a picture perfect outlook on in future they are expecting. It’s important to read the SEC filings because it will keep you knowledgeable about your investments and the long-term potential the company holds.

Please see About Me & Disclaimer for additional information about Black Tea.

Information Obtained: Investopedia.com, SEC.gov, Fool.com

Stock Investing 101: What Are Robo-Advisers?

Robo-Advisers have become increasingly popular and many investors enjoy the features that come along with the investing program. Let’s get a quick view of what they are, how they work, and how they may work for you.

According to Investopedia, robo-advisers are “digital platforms that provide automated algorithm-driven financial planning services with little to no human supervision“. Simply put, it’s a digital financial planning service that manages your account for you- who needs people anyway? Read one of my most recent posts about tech stocks here.

Pros of Robo-Advisers

Robo-Advisers are known for their award-winning software for their algorithm techniques, simplicity, low costs and fees. They offer more affordable fees than human financial advisors and most companies provide 24/7 customer service hours. Annual fees may be as low as 0.2%, whereas fees for “human” managed portfolios have a flat annual fee for 2%. That may not sound like a lot, but a little goes a long way over a period of time.

Cons of Robo-Advisers

There are many advantages advertised for robo-advisors, however, they require online access to operate. If you enjoy day trading, swing trading or options, you more than likely won’t get all of the technical features that come with active trading. Robo-Adviser programs are aimed towards buy-and-hold investors and have their own set of hourly rates/fees involved with the program.

There are many robo-adviser programs that leave investors very satisfied. Two of the most popular companies you may be familiar with are Betterment and Acorns. Robo-Advisers are great and if your interested in opening an account, contrast and compare from other companies and do your own research on what you’re looking for in your investment portfolio.

Please see About Me & Disclaimer for additional information about Black Tea.

The Christian Investor: Trust Issues

There is a time to make a move and there is a time to sit back and let God handle it all, but how to do we define the two?

God is protecting us from things we cannot see.

As said in Ecclesiastes 3:11, ” He has made everything beautiful in its time. He has also set eternity in the human heart, yet no one can fathom what God has done from beginning to end. And when He calls us to sit back and not move, God is protecting us from things we cannot see. And if you don’t know when God is telling you to trust him, ask Him! This understanding requires you to read more of his the bible for you to understand what he is speaking to you.

God has higher thinking than we do.

Besides, you may not be mentally or emotionally prepared for what “looks” like an exciting opportunity. If you trust God in handling the small things, you must trust him in the big things too. We have to lean on his understanding, for God’s has higher thinking than we do. He can turn a bad situation into good in a matter of seconds, but if you cannot trust with the gift he has given you how can he help you?

Those who know your name trust in you, for you, Lord, Have never forsaken those who seek you. – Psalm 9:10

This week, ask God how you can trust him in every area of your life. Ask him to not only to help you when problems arise but to help you when things are going well. God will help us in the good times and bad, but our trust issues can stand in the way. Ponder on this scripture this week:

Trust in the Lord with all your heart and lean not on your own understanding; in all your ways submit to him, and he will make your paths straight. – Proverbs 3: 5-6

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Edible Earnings From DRI (Darden Restaurants Inc.)

DRI (Darden Restaurants Inc., $108.80) is a corporation that owns some of America’s famous restaurant chains: Olive Garden, Long Horn Steak House, Bahama Breeze, Cheddar’s Scratch Kitchen, The Capital Grill, Yard House, Eddie V’s, and Season’s 52 Grill.

Last Thursday, shares jumped 8.3% after their shareholders call, impressing investors by beating their earning goals; from $123.8 million (0.98 cents per share) to $174.5 million ($1.39 per share).

Carrying a fantastic history of consistent dividends, DRI has been steady in their lifetime on the stock market.

Image from StreetInsider.com

DRI also announced to increase their dividends by 19% for 0.75 cents per share. Many stock analysts are claiming this company to as a buy and hold investment. Current shareholders are very satisfied with their consistent dividend history since 2011.

Their Seasons 52 grill was the only restaurant that lagged behind by -1.39%.

Cheddar’s Scratch Kitchen was acquired last year by an all-cash offer for $780 million on March 27, 2017, some investors believe they could become more aggressive and competitive from their competitors BJRI (BJ’s Restaurant, $61.70) and DAVE (Famous Dave’s, $6.60). However, CEO, Gene Lee announced in DRI’s recent quarterly meeting,

“Our strategy remains unchanged, and our operators’ consistent focus on being brilliant with the basics has allowed us to continue building guest loyalty while taking market share.”

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Information Obtained: DardenRestaurants.com/investorrelations, Streetinsider.com, Markets.Businessinsider.com

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Nexstar Media Groups (NXST) Takes Action

NXST (Nexstar Media Group, $75.35) is one of the nation’s largest media broadcasting company based in Irving, TX. With a market cap. of 3.40 billion dollars, NXST is particularly loved by buy-and-hold investors.

NXST operates over 171 television stations across the United States and made a recent acquisition in 2017 of LKQD technologies for $90 million– a leading independent advertising infrastructure corporation. LKQD is a top performer in video advertising and reaches million of people through mobile phone advertising, tv advertising, etc.

Screenshot from Robinhood

With a fair GPR (gross profit margin) of 57% and a consistent dividend history, some investors believe NXST has more to grow from their low p/e ratio 6.936. Their projected stock price in one year is $95.00.

Neuberger Berman Genisis is the largest mutual fund holder of NXST and analyst are claiming this is a great time to buy if the investor is looking to have holdings in the consumer cyclical sector.

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