One Of The Most Important Charts In America… Plus: Income From One Of The Hottest Tech Names In The Market
A few months ago, I came across an amazing chart. It was the kind of thing that once you see, you just can’t unsee.
I happened across it by perusing one of my favorite corners of Twitter, known as Fintwit. This is shorthand for people on Twitter, from financial professionals to Venture Capitalists to individual investors, who use the social media platform to talk about the markets.
The chart below explains so much about where we are at as a nation. Particularly, it speaks to the state of the millennial generation, which is now the largest generational cohort in the U.S., the largest share of the workforce, and is entering its prime years in terms of earning (and consuming) power.
Take a look and see if you notice anything strange…
Source: U.S. Federal Reserve
Here’s what’s disconcerting about this chart. The first millennials turned 40 this year (the youngest are 25). This means they are entering what should be the sweet spot for wealth accumulation. But in terms of net worth, millennials have been lagging far behind previous generations.
This CNBC article sums up the situation:
While it’s not abnormal for older generations to be wealthier than younger generations — they have had longer to earn money and accumulate assets, after all — the Fed’s data also shows that millennials have far less wealth than boomers did at the same age.
Now, I want to encourage you to think for a moment before you dismiss these findings. I somewhat sympathize with what an older American reading this might think… But there is also another side to the story, of course.
After all, as the article points out, each generation encounters its own unique set of challenges and opportunities.
For millennials, especially older ones like myself, you could go back as far as the financial crisis. This (partially, at least) explains why millennials lived at home longer, got married later, and bought homes later than previous generations.
There’s also the student debt problem. According to the Institute for College Access & Success, the average college student graduated with $29,290 in student debt last year – a figure that’s been steadily on the rise. The average Gen X-er had $12,800 in student debt, by contrast.
Throw in an increasingly competitive global marketplace, stagnant wages, rising costs of living, and then a global pandemic that upends the economy — plus a few other factors — and you wind up with this chart.
But as the previously mentioned CNBC article states, there are signs of optimism:
Five years ago, older millennials were 40% poorer than previous generations were at the same stage of life. That wealth gap has shrunk in recent years, but it’s still too soon to tell if obstacles such as student loan debt burdens, rising living expenses and the effects of the Covid pandemic will push this generation permanently off course.
It goes on to point out that older millennials have started to close the gap and are now only 11% behind previous generations. A good portion of that gain can be attributed to gains in home prices, as millennials have (finally) started becoming homeowners in recent years.
We’ll see whether this gap closes over time.
Why should we care? Well, aside from wanting our fellow citizens to prosper, this has a broad range of social, economic, and political effects.
Some of that is beyond the scope of this column. And I’m not here to offer any policy prescriptions, either. But when you see a chart like this, it begins to explain a lot — and it should concern us. For one, it’s hard to have the confidence to take a risk and start a new business at a younger age if you don’t heave wealth.
All that being said, this chart has clear economic implications that we can’t ignore.
It’s interesting food for thought – and something to keep an eye on.
Collect Income From One Of The Hottest Tech Names In The Market
The stock market has pulled back this week. Traders seem to expect ever-rising prices and pullbacks seem to catch them by surprise. But pullbacks are normal, and the current decline is still within the realm of normal market activity. The chart below shows that $447.20 would be a 38.2% retracement of the recent advance.
At $447.20, SPDR S&P 500 (NYSE: SPY) would be about 1.5% below its high.
For now, it’s still a bull market, and that means I’m sticking with bull market trades over at my premium service, Maximum Income.
Some of you know that I worked in military intelligence a decade ago. Some of that work can be tedious. But a recent recommendation I made to my readers takes the level of analysis that goes into this work to a whole new level.
Palantir Technologies Inc. (NYSE: PLTR) is a leader in artificial intelligence applications. The company has worked with the government to develop intelligence systems.
The goal is to gather as much information as possible, sift through the data to find the important elements, and tie the important pieces of information together to identify, in advance, what the other party is planning to do.
Obvious applications exist in the War on Terror. A terrorist organization is decentralized and there is a fair amount of chatter among those tied to the organization. Within the organization, there are planners and operatives, and each may use coded communications since they plan to hide their actions from the intended targets.
Our government listens to the communications of terrorists when they can and tracks their movements with surveillance systems. This information is reviewed by analysts, and Palantir has created software to sift through the data looking for important connections.
The fact that the company has done this gives it a competitive advantage. Intel agencies change slowly and are comfortable with Palantir. This should lead to a steady income stream.
But Palantir knows this kind of software has capabilities beyond the military. It can be used to research drugs or to optimize complex manufacturing processes. Airbus, the European airplane maker, is a customer. This gives Palantir a position in the airline industry where artificial intelligence could help improve air traffic in addition to helping companies increase their profits.
My Plan To Profit
What’s attractive about PLTR is its growth potential. It makes a nice addition to our conservative portfolio.
Another long-term appeal is that Palantir is also an investor in other companies. Its company chair, Peter Thiel, is a successful venture capitalist. Thiel was a co-founder of PayPal and was the first outside investor in Facebook. His ability to find winners in the tech sector could add to the profits of PLTR’s shareholders now.
Of course, PLTR is a tech stock. That means it doesn’t pay a dividend. But over at Maximum Income, but we can still generate income from the stock thanks to a “loophole” that most investors don’t even know exists…
With this strategy, we get paid immediately for positions we hold in our portfolio. If everything goes according to plan, we can repeat this strategy again and again, allowing us the chance for thousands of dollars in extra income from the stock — as well as the chance to collect regular dividends.
Most Americans have no idea about this simple strategy… But it has the power to protect your portfolio on the downside, while supercharging your income as well. And once you know how it works, you can make trades like this in as little as six minutes…