Wall Street’s biggest optimist says he ‘wouldn’t jump into the AI trade right now’

Ed Yardeni, who coined the phrase ‘bond vigilantes,’ says Treasury yields won’t stay higher for longer, and believes the ‘Roaring 2020s’ will last

Link to MarketWatch article: Link

Ed Yardeni, who’s been called the most bullish man on Wall Street, says he hasn’t been bullish enough.

‘Instead of FOMO, we are seeing what I have dubbed FEMO, which stands for fabulous earnings momentum.’—Ed Yardeni

Ed Yardeni, who was recently called the most bullish man on Wall Street by a Bloomberg anchor, keeps getting more optimistic about the stock market.

Already this year, he’s raised his year-end target for the S&P 500 three times — from 7,700 to 8,250 to 8,400 — but says he still isn’t bullish enough. And, he adds, plenty of sell-side analysts are more bullish than he is.

Yardeni, president of Yardeni Research, started his career on Wall Street in 1978 at E.F. Hutton and later served as chief economist at Prudential Securities and C.J. Lawrence. He coined the term bond vigilantes in 1983. He is the author of “Predicting the Markets: A Professional Autobiography.”

In this interview, edited for length and clarity, Yardeni explains why today’s AI-driven bull market has little in common with the dot-com bubble, why the mounting national deficit doesn’t worry him and where he expects the ‘Roaring 2020s’ to go from here.

MarketWatch: What is the most important difference between the dot-com boom and today’s AI-driven market?

Yardeni: The dot-com boom was driven largely by FOMO, fear of missing out. The valuation multiple of the S&P 500 soared, led by the technology sector. The forward price-to-earnings ratio got to a record high of 25 by early 2000, led by a forward P/E for the information-technology sector that soared to something like 55. [Forward P/E uses aggregate sell-side analyst estimates of earnings per share over the next 12 months for the S&P 500 companies.]

This time around, forward P/Es have actually gone down. Instead of FOMO, we are seeing what I have dubbed FEMO, which stands for fabulous earnings momentum. This bull market, or melt-up, has been earnings-led, whereas the previous one was valuation-led, which makes it more sustainable and less troubling than what led to the tech wreck.

Semiconductors now have a P/E of about 17, while the market’s P/E is about 20. Investors are not willing to pay anywhere near the multiples they paid in the 1999 bubble. Quite the opposite: As analysts have raised their earnings expectations, the valuation multiple has actually gone down.

MarketWatch: What would make you abandon the Roaring 2020s thesis?

Yardeni: There are a lot of things that can go wrong. That is my base case, but I would put an 80% subjective probability on the Roaring 2020s continuing, with a 20% bucket of scenarios where things go very wrong. I would not abandon the thesis outright. I would adjust my subjective probabilities instead.

Geopolitics is a major issue, though crises have historically been buying opportunities, as we saw in March when a pullback lasted about a month before reversing. The real risk is the price of oil, both for consumers and for inflation, which could force central banks to raise rates.

The U.S. and global economy have weathered rate hikes well. The fed-funds rate went from near zero to 5.5% in 2022 and 2023, and the economy stayed resilient. But a bear market does not require a recession. We had one in 2022 without a recession, and that is conceivable again.

‘I do not agree that rates are staying higher for longer. I think 4% to 5% is normal, and I will worry about a debt crisis when the bond vigilantes worry about it.’—Ed Yardeni

MarketWatch: With the federal debt so high, are the bond vigilantes back, and is that a problem for investors?

Yardeni: The debt certainly goes on the worry list, but it has been on that list for more than 45 years. I coined the phrase ‘bond vigilantes’ in July 1983.

I wrote at the time that if the fiscal and monetary authorities, the sheriffs, do not keep law and order in the capital markets and the economy, then the bond vigilantes will step up and do it themselves by pushing up bond yields. Back then, they were concerned about $250 billion in federal deficits on a 12-month basis. Now we are looking at $1.5 trillion to $2 trillion.

I do not agree that rates are staying higher for longer. I think 4% to 5% is normal, and I will worry about a debt crisis when the bond vigilantes worry about it. They are certainly active in Japan and the United Kingdom, and they are starting to stir in the U.S., as well.

(A week before this interview, Treasury Secretary Scott Bessent intervened to prop up the yen by selling euros, apparently without asking the Europeans. That was unsettling, a reminder that the U.S. depends on the kindness of strangers, and that kindness may be starting to wear thin.)

‘I would not jump into the AI trade right now. Everyone has AI fatigue, and it is too hard to say who wins, who loses and who might blow up. If you want that exposure, hold a diversified fund like the QQQ rather than picking individual stocks.’—Ed Yardeni

MarketWatch: What would you tell an investor who feels that they missed out on this year’s gains and is thinking about jumping in now?

Yardeni: They should have been reading my research. It is hard to tell someone who missed a bull market anything comforting, but historically some bull markets have run much longer and kept delivering big gains. There are still opportunities because valuation multiples have actually gone down even as earnings expectations have gone up.

The counterargument is that the irrational exuberance this time is in analyst earnings expectations rather than valuations, but those expectations are being driven by real performance: First- and second-quarter numbers were extremely strong, and analysts raised their 2027 estimates as a result. It really comes down to whether we get a recession, and I do not think we will.

That said, I would not jump into the AI trade right now. Everyone has AI fatigue, and it is too hard to say who wins, who loses and who might blow up. If you want that exposure, hold a diversified fund like the QQQ rather than picking individual stocks. I do not know who wins or loses, but both are likely in the Nasdaq-100, so on balance the winners should beat the losers.

Beyond that, focus on industries that benefit from using AI rather than the AI companies themselves. I like financials and healthcare, which should find plenty of uses for AI to raise revenue and cut costs, and industrials, given the hyperscalers’ (the major cloud computing companies) commitments to expand AI capacity. I would add energy as a fourth overweight. Information technology and communication services, which we overweighted for a long time, moved back to market weight toward the end of last year.

MarketWatch: Does your 8,400 year-end S&P 500 target still hold?

Yardeni: Yes. I try not to change it too often. I started the year at 7,700, raised it to 8,250 in May, and raised it again a couple of weeks ago to 8,400, each time responding to earnings reports that showed FEMO. I have been bullish, but not bullish enough, on earnings.

MarketWatch: So far you have been right. Does that make you nervous?

Yardeni: A little. I have a bit of a contrarian streak in me, so I try to stay open-minded.

My approach is that unless your day job is day trading, stocks are for the long run, and pullbacks and bear markets tend to be opportunities to get in. The problem with the permabears is that they will get you out at the top, out at the middle and out at the bottom. You will never actually be in the market.

MarketWatch: Should U.S. investors be buying overseas stocks right now?

Yardeni: We have been recommending staying home over going global since 2010, and that worked well until last year, when going global outperformed and we did not fully anticipate the rotation away from the U.S. By the end of last year, we said going global made more sense, partly because U.S. stocks accounted for 65% of the entire world market by capitalization at the start of last year.

There was not much point in telling people to keep overweighting the U.S. when it had already succeeded so well, and opportunities existed overseas. So far this year, going global has worked fine.

MarketWatch: How about gold? Is it worth owning for protection?

Yardeni: Yes, absolutely, though I have never been a gold bug and am honestly clueless when it comes to valuing something with no coupon or dividend. But after Russia invaded Ukraine and the U.S. froze its international reserves, foreign central banks, particularly China’s, began buying more gold and reducing their dollar reserves. That is when gold started to make sense to me.

It has been tricky. Gold did not rally on this year’s geopolitical crisis the way you might expect, and instead sold off sharply.

We had used $5,500 as our year-end target but lowered it to $5,000 after gold’s perverse performance. It found support around $4,000 and bounced, then rebounded further after a recent Treasury Department announcement. I think having some gold makes sense in this environment.

MarketWatch: Is there something the bond market knows that we do not?

Yardeni: It is worth watching the credit markets, since problems there tend to surface before stocks catch on.

MarketWatch: You are going to speak at the MoneyShow in a few days. What will your talk be about?

Yardeni: It is titled “Will the Roaring 2020s Continue Into the 2030s?” The question is whether we are still on course. We are in the seventh year of the Roaring 2020s, an idea I first wrote about in August 2020, when it looked delusional.

It has worked out: no recession, and both the U.S. economy and the stock market are at all-time highs. I have about three more years to go to get it right.

But things could still go wrong, especially in the 2030s. The problem with the 2030s is that it rhymes with the 1930s, which was a horrible period for geopolitical crises.

Michael Sincere is a freelance financial writer and the author of several books including “Understanding Stocks,” “Understanding Options” and “Help Your Child Build Wealth.”

Schwab’s chief investment strategist says most investors are making the same costly mistake—and it has nothing to do with picking the wrong stocks

Liz Ann Sonders on gambling vs. investing, why valuation is a terrible market timing tool, where the real AI story is being missed, and what the Fed will—and will not—do next

Link to MarketWatch

Liz Ann Sonders has spent decades translating the complexity of financial markets into language that retail investors can actually use. As chief investment strategist at Charles Schwab, she speaks to millions of individual investors and has become one of the most recognized voices in the country on what markets are doing and why it matters to ordinary people.

In this interview, edited for length and clarity, Sonders explains the single biggest mistake retail investors are making today, why she believes the line between gambling and investing is dangerously blurred, what valuation metrics actually tell you and what they do not, and why the Federal Reserve is unlikely to cut interest rates anytime soon.

MarketWatch: What is the biggest mistake retail investors are making in this market?

Sonders: Probably a lack of some of the traditional disciplines. Also, not focusing on diversification, and most importantly, not rebalancing periodically. Investors let their winners run and bail from the losers.

I also think a lot of investors are jumping in with a trading approach, particularly younger investors, as opposed to going through the process of establishing a plan and figuring out what their strategic asset allocation should be. I often ask an audience: what is the most important piece of a jigsaw puzzle? People say the final piece, the corner pieces, the edge pieces. I always say it is the picture on the box. If you are doing a 1,500-piece puzzle without looking at the picture on the box, it is an impossible task. That is what investing without a plan looks like.

And then there is leverage. The popularity of leveraged ETFs, particularly leveraged single-stock ETFs, concerns me. I am not sure that all retail traders understand the risks associated with those products.

“Investing is about owning. Gambling is about hoping.”

—Liz Ann Sonders

MarketWatch: What do most investors consistently get wrong about the market?

Sonders: What they consistently get wrong is greed and panic. The classic extreme emotions. The late 1990s were a perfect example of greed. The global financial crisis and the bear market of the early 2000s after the internet bust were driven by fear and panic. Panic is not a strategy.

But there is something bigger happening right now. I think it is a good thing that there is more interest in investing, particularly among younger people. But there has been a dangerous blurring of the lines between gambling and investing. Investing is about owning. You are a participant in wealth creation, in the cash flows of businesses you own a piece of. Over a reasonably long period of time, the odds are in your favor.

When gambling, you place a bet, step back, and hope for a windfall. The odds are not with you. The marketing of betting platforms, sports or otherwise, and prediction markets is helping blur those lines. Studies of younger investors show they believe gambling is a reasonable path to wealth creation, not all that different from investing. That concerns me deeply.

I coauthored a piece in April called “Gambler’s Blues: Betting Isn’t Investing” that got more attention than almost anything I have ever written. It is available on schwab.com if readers want to look it up.

MarketWatch: If the market dropped 20% tomorrow, what should a retail investor do?

Sonders: There is no cookie-cutter answer for all investors, and that frustration I have with cookie-cutter answers is worth explaining. Imagine a little birdie from the future landed on my shoulder and whispered, with 98% probability, exactly what the stock market and bond market are going to do. I take that information and sit down with two investors.

Investor A is 25 years old. They inherited $10 million from their grandparents, go skydiving on weekends, are gainfully employed, and do not need the money right now. Investor B is 78, built a nest egg they cannot afford to lose, and is living off the income it generates. Even with near-certainty about where markets are headed, what I would tell those two investors is entirely different.

For some investors, a 20% drop is a buying opportunity. The financial media tends to say trim 15% of your equity holdings or hold a 60/30/10 portfolio (equities, fixed income, and cash). But who is the investor? That context matters more than the market call.

“Valuation is often misunderstood. It is perfect to have in your knowledge bank, but valuation is a terrible market timing tool.”

—Liz Ann Sonders

MarketWatch: Are investors paying a fair price for U.S. stocks at current valuations?

Sonders: We are not at egregious valuation levels right now. Valuations have improved, and for what is at least on the surface the right reason: earnings have surged. As of early August, you are looking at more than 50% earnings growth for the second quarter. When earnings grow faster than stock prices, valuations come down.

But here is the key point people miss: valuation is a terrible market timing tool. There is very little correlation between what any valuation metric reads at any point in time and what subsequent one-year market performance is. I have scattergrams—charts showing no reliable pattern—of every major valuation metric against one-year forward returns, and the dots are all over the map. The correlation rounds to nearly zero.

If you extend to a 10-year horizon, then valuation connects to performance as you would expect. Lower starting valuations have historically produced higher long-term returns. But you really have to go to a 10-year-plus horizon for that relationship to hold.

MarketWatch: Are investors getting too excited about AI profits that may still be years away?

Sonders: The earnings growth from AI has been phenomenal. The risk right now is that the bar has been set so high that disappointment becomes possible even when results look strong. I have said for decades that better or worse often matters more than good or bad. That is a key tenet of how the stock market works.

The market focuses on inflection points, on when things stop getting better and start getting worse. The best stock market performance historically comes in the early stages of an earnings recovery, when growth is barely back in positive territory. The worst performance comes in deep contractions.

“Panic is not a strategy.”

—Liz Ann Sonders

MarketWatch: Is there a sector or theme that investors are overlooking right now?

Sonders: Energy still does not get a lot of attention, even though it is by far the best-performing sector this year. Part of the reason is that energy is a small share of the S&P 500. Even with incredibly strong performance, it does not move the cap-weighted index much. But we have increasingly been recommending investors consider an equal-weighted version of the index, because that is where you can find opportunity when leadership starts to shift away from the cap-dominating sectors like technology.

MarketWatch: What is happening with the Federal Reserve that investors may be misunderstanding?

Sonders: Two things. First, there was a lot of worry in the transition from Powell to Warsh. I would hear questions like, what if Warsh just raises rates aggressively and goes against the committee? That is not how it works. There are 12 voting members. You need seven to agree on any rate decision. The chair has an important voice, but the actual decision is majority rule. The idea that any chair can simply impose their will is a misperception.

Second, people assume that rate hikes are automatically bad for stocks and rate cuts are automatically good. That is too simple. What matters is why the Fed is moving and how fast. If they are cutting because the economy has fallen into recession and deflation, that is very different from cutting because inflation has come down while the economy is still growing. The why and the pace both matter enormously.

As of early August, the Fed funds futures market shows about a 30% probability of a rate hike at the next meeting. There is zero expectation of a cut. Inflation is still above the Fed’s target. It has been above target for five years. There is no justification for a cut.

MarketWatch: People must ask you all the time what the market is going to do. What do you tell them?

Sonders: They do, and my answer is always the same: I do not know. Most strategists and analysts, most pontificators, should probably answer that way, because it is the truth.

The most important advice someone in my position can give is not to try to time the market short term, pick tops and bottoms, or make a call about when the next 10% correction is going to happen. That is pretty close to throwing a dart. It is not what we know that matters. It is what we do that matters.

The tried and true disciplines—diversification across and within asset classes and periodic rebalancing—do not make headlines. But that is what matters.

Michael Sincere is a freelance financial writer and the author of several books, including “Understanding Stocks,” “Understanding Options” and “Help Your Child Build Wealth.

Kevin O'Leary, aka 'Mr. Wonderful,' on crypto, winning in AI and 3 things all business owners must know

Michael Sincere

Financial Writer, Editor & GhostwriterAugust 8, 2026

What Kevin O'Leary learned from Steve Jobs: You only need to get three things done every day. Just three.

By Michael Sincere Aug. 7, 2026

Link to MarketWatch column: LINK

'The demand for data centers is insatiable. Domestic demand right now is about 45 gigawatts, and we have about 4.7 gigawatts under construction. We are way behind.' — Kevin O'Leary

Kevin O'Leary, who made a fortune in software in the 1990s, is now best known as "Mr. Wonderful" from ABC's Emmy Award-winning "Shark Tank."

O'Leary co-founded SoftKey Software in 1986, grew it into the world's second-largest consumer software company with over $800 million in annual sales, and sold it to Mattel for $4.2 billion in 1999. He is chairman of O'Leary Ventures, holds investments in more than 30 private companies, and is a member of the Hamilton Trust, the oldest investment club in the United States.

In this recent interview, edited for length and clarity, O'Leary talks about whether there are still opportunities in cryptocurrencies, where he's putting his money in the artificial-intelligence trade and the one question he asks every entrepreneur that reveals whether they have a real business.

MarketWatch: You've said 97% of crypto value has concentrated into bitcoin and Ethereum. Is that a warning to retail investors?

O'Leary: It's just a fact. Sovereign-wealth funds looked at the crypto market and hired analysts to run the numbers. They looked at market caps and volume across every token and concluded that bitcoin and Ethereum captured 97.2% of the entire market. So why bother with anything else?

As a result, you could see the charts collapse. Some of these tokens went down 80% to 90% and never came back. They had their day in the sun and it's over.

'I talk to S&P 500 companies all the time, and I ask every one of them: Are you planning to use blockchain for inventory, logistics, contract management?' — Kevin O'Leary

MarketWatch: So where's the next big opportunity in crypto?

O'Leary: I talk to S&P 500 companies all the time, and I ask every one of them: Are you planning to use blockchain for inventory, logistics, contract management? And 100% say yes. Then I ask which one. They say they haven't decided.

The next big thing in crypto is whichever chain lands at least one company in all 11 sectors of the S&P 500. The minute that happens, you want to go long that token. Because once standardization forms across sectors, it becomes a winner-take-most situation. That's the moment. And we haven't hit it yet.

MarketWatch: You've moved your company's cash reserves into stablecoins. Why?

O'Leary: Stablecoins are now Securities and Exchange Commission approved and compliant. Let's say you're putting down a $2 million deposit on real estate in Zurich. Fedwire takes three days. Your money earns nothing while it's in the system. ACH transfers are even messier. Those are 60-year-old technologies.

With stablecoin, you do a $100 test transfer, confirm it arrives in five minutes, and complete the transaction. Know-your-client compliance is built in on both sides. You just saved yourself a fortune. More and more of our assets are going into stablecoins. Our cash reserves are basically in stablecoins now.

'I'm a picks-and-shovels guy. I know that data centers need power. I know digital payment systems need infrastructure. I'd rather play on that side than bet on who wins and who loses on the software side.' — Kevin O'Leary

MarketWatch: You control tens of thousands of acres tied to AI and data centers. How do you think about that investment?

O'Leary: The demand for data centers is insatiable. Domestic demand right now is about 45 gigawatts, and we have about 4.7 gigawatts under construction. We are way behind. Each gigawatt of AI compute costs $15 billion. That's an enormous amount of capital we're going to have to deploy if we want to stay competitive.

The reason I'm in land is simple: You can't attach a new data center to the grid anymore. There is no power. If you tried, you'd force electricity prices up 30% in your local community and you wouldn't get a permit. So you have to bring your own power. That's what we're doing.

MarketWatch: Which investment looks brilliant today but could collapse in five years?

O'Leary: With tech, it's very hard to know which horse to bet on. If you're betting on one of the AI stacks — whether it's Claude, ChatGPT or any other — I have no idea where they are in five years. That's not what I invest in.

I'm a picks-and-shovels guy. I know that data centers need power. I know digital payment systems need infrastructure. I'd rather play on that side than bet on who wins and who loses on the software side.

'It's all about CAC — customer acquisition cost — and ROAS — return on ad spend. If you don't know those numbers, you're heading to zero.' — Kevin O'Leary

MarketWatch: After thousands of "Shark Tank" pitches, what makes you say no faster than anything else?

O'Leary: I ask three things: Are you using social media to acquire customers? Do you know your customer acquisition cost? And which AI tools are you using to reduce your content costs? If they stare at me blankly, I'm out. I don't care what the product is. Their competitors are going to destroy them using those tools.

Fifty percent of sales on most domestic startups are now direct-to-consumer or direct-to-business. It's all about CAC — customer acquisition cost — and ROAS — return on ad spend. If you don't know those numbers, you're heading to zero.

MarketWatch: What separates people who want to be rich from those who actually become rich?

O'Leary: The ability to distinguish signal from noise. Great entrepreneurs get an inbound flow of information every minute of the day and deflect the noise. They catch the signals. In entrepreneurship, you only need to get three things done every 18 hours to advance your cause. Just three.

I learned this from Steve Jobs in the early 1990s. I made all his educational software for 110,000 school buildings. He told me, get three things done each day, and the rest is noise. He used to call me at 3 in the morning. He was very difficult to work with, but he was right. When you go to bed, you need to know what tomorrow's three things are.

MarketWatch: Your portfolio is 60% equities, 20% fixed income, 20% alternatives. Has anything changed in 2026?

O'Leary: I've moved more into sports collectible cards and watches this year. My highest return has come from alternative assets. Rare watches — particularly F.P. Journe pieces — have outperformed the S&P over the last five years. A dual Logoman Kobe-Jordan autographed card that my syndicate bought for $12.93 million last August is now worth $21 million. That's a strong return by any measure.

MarketWatch: If you were 25 with $10,000, what would you do?

O'Leary: I'd go to companies and offer to manage their social media and content creation using AI tools. I'd charge 2% of the reduction in their customer acquisition cost per week — measurable, provable results. I have people who used to make $40,000 to $60,000 a year doing this work who now make $600,000 a year because they got on the right side of AI-driven content.

People worry AI is going to eliminate jobs. That's the same fear people had when Ford automated the manufacturing line. The productivity it creates builds economies. The same thing is going to happen here.

Michael Sincere is a freelance financial writer and researcher and the author of several books including "Understanding Stocks," "Understanding Options" and "Help Your Child Build Wealth."

Link to my MarketWatch column: Link

Investing legend Charles Ellis: Most stock pickers are playing a 'loser's game'

By Michael Sincere July 29, 2026

'Active managers who beat the market typically beat it by a little. But those who fall short, fall short by a lot.' — Charles Ellis

Charles D. Ellis has spent six decades trying to convince Wall Street of an uncomfortable truth: Most professional money managers cannot beat the market, and picking the ones who can is largely a losing game.

Ellis built that argument over three decades as founder of Greenwich Associates, which advised many of the world's largest financial institutions. The financial press has called him "Wall Street's Wisest Man."

Ellis chaired the investment committee at Yale University for decades, working with David Swensen, who was Yale's longtime chief investment officer. Ellis taught investing at both Harvard Business School and Yale. He served for years on the Vanguard Group board alongside its founder, John Bogle. Ellis's classic 1998 book, "Winning the Loser's Game: Timeless Strategies for Successful Investing," now in its eighth edition, has sold more than 1 million copies.

Ellis's 24th book, "Great American Investments: A History of the Bold Initiatives that Shaped a Nation," tells the stories behind 14 major U.S. government investments, from the Louisiana Purchase to the GI Bill to the founding of NASA, and the political fights that nearly kept several of them from happening.

"I looked for stories that nearly everyone today would agree were good decisions, even though many disagreed at the time," Ellis says. "Every one of these 14 stories is its own small adventure in how America makes decisions democratically. It is never easy."

In this recent interview, edited for length and clarity, Ellis uncovers key lessons from his long career in investment management. Among them: why indexing beats even the most talented stock pickers; the biggest mistake individual investors are making right now, and what a young investor can learn from a lifetime spent studying markets.

An active manager might charge 1% of assets, which sounds cheap. But at a normal 7% return, that 1% fee actually works out to about 15% of your returns. — Charles Ellis

MarketWatch: Your seminal 1975 Financial Analysts Journal article, "The Loser's Game," argued that most professional money managers cannot beat the market. What convinced you that was true?

Ellis: I was working at a research-driven stock brokerage, and every client I spoke with was certain they could beat the market. They were all competing against each other for the same edge. Around that same time, Jack Bogle was trying to launch the first index fund and could not get any backing on Wall Street. It launched as a load fund, an 8% sales charge just to get in, guaranteed never to beat the market. People thought only a fool would buy that.

The data proved us both right. Over a 20-year period, roughly 85% of actively managed mutual funds fail to beat the market. There is no reliable way to predict which managers will land in the winning 15%, other than looking at who charges the lowest fees. Active managers who beat the market typically beat it by a little, but those who fall short fall short by a lot, because a manager who is behind and worried about being shut down takes bigger risks to catch up.

MarketWatch: What separates a bold investment from a reckless one?

Ellis: The biggest advantage anyone has is time. Six months does not count as long-term. Real long-term means 40, 50, even 60 years. People start investing in their 20s and often are investing in their 80s. If you think about your children and grandchildren, it stretches even further.

I use the analogy of climate versus weather. I live in New Haven, Conn., where some days hit nearly 100 degrees and some days are close to zero degrees. Look at the daily weather; it seems chaotic. But ask anyone in New Haven about the climate, and they will tell you it is a wonderful place to live. Look at the stock market day to day and it jumps around constantly. Look at it decade to decade, and it is close to a straight line.

MarketWatch: Why is it so psychologically difficult for people to stay invested for the long term?

Ellis: Because we are human beings. We are wired to think too well of ourselves. Roughly 80% of people believe they are better drivers than average, better dancers than average, better at almost everything than average. Young men are especially prone to this, particularly when it comes to investing.

The best resource on this is Daniel Kahneman's "Thinking, Fast and Slow," drawing on decades of research with Amos Tversky. I spent 30 years consulting with investment firms worldwide, like a bumblebee moving from flower to flower. Every flower was talented and convinced it could win. Multiply that across the market, and those advantages cancel out. The only thing that does not cancel out is the fee you pay for it.

MarketWatch: You chaired the Yale University investment committee for decades, working with David Swensen, who was Yale's respected chief investment officer. What is the single most important lesson a young investor today can take from that experience?

Ellis: Understand how the market operates. It is filled with extraordinarily talented people whose careers depend on being right, evenly matched against each other. When you think you have an edge, you are almost always up against someone just as smart and just as determined.

Time, not talent, should drive your decisions. A horizon of 10 years or more calls for being close to 100% in stocks. A shorter horizon calls for bonds, and a very short one for money-market instruments. Do not try to time when to get in or out. Surprise is the most important characteristic of markets in the short run. In the long run, there is no surprise. A 20-year-old has decades of that long run ahead, and should be almost entirely in stocks without a second thought about short-term swings.

'Indexing is the easiest way to put the best judgment of the smartest people on Wall Street to work for you, at remarkably low cost.' — Charles Ellis

MarketWatch: What is the biggest mistake individual investors are making right now, and what should they do instead?

Ellis: The biggest mistake is letting short-term noise dominate your thinking about the long-term trend. Nobody knows everything, and you probably do not know enough to make good short-term calls. What you do know is that this is a great economy with a great future ahead of it.

Indexing is the easiest way to put the best judgment of the smartest people on Wall Street to work for you, at remarkably low cost. Think of everyone brilliant at Goldman Sachs, Morgan Stanley, Fidelity and Capital Group. With an index fund, all of them are effectively working on your behalf.

MarketWatch: Is there anything I didn't ask that you'd like to discuss?

Ellis: One thing that fascinates me is how people think about fees. Index funds cost 5 to 10 basis points. An active manager might charge 1% of assets, which sounds cheap. But look at it as a share of your expected return instead. At a normal 7% return, that 1% fee actually works out to about 15% of your returns. That is not cheap at all.

Compare that with the incremental return you are actually getting. Active managers, on average, produce a negative incremental return after fees, so that 1% ends up costing more than 100% of whatever you gained by hiring them. Nobody charges over 100% for anything. Yes, they do, for perfume and for investing. That is why, when I raise money for my old college, the first people I call are the people in the investment business. They have made more money than anybody else.

He brought AI to Wall Street in 1994 — but won’t trust ChatGPT with his money

MarketWatch Link: LINK

When should people trust a machine over their own judgment?

Vasant Dhar has been building artificial intelligence long before anyone called it that. In 1994 he left academia to bring machine learning to Wall Street, then founded SCT Capital, one of the first hedge funds built entirely on machine-driven trading. His firm’s algorithms still trade markets every day.

Dhar is a professor at the NYU Stern School of Business and the NYU Center for Data Science, where his research centers on prediction, AI governance and a question he keeps returning to: When should people trust a machine over their own judgment?

Dhar explores that question in his book, Thinking With Machines: The Brave New World of AI, and on his podcast and newsletter, Brave New World.

In this recent interview, edited for length and clarity, Dhar shares why he would not hand his own money to a chatbot, what his AI valuation tool found when it disagreed with the human expert it was built to mimic, and how investors can decide where AI actually belongs in their own portfolio.

MarketWatch: Are retail investors using AI effectively or are they making expensive mistakes?

Dhar: This gets to the heart of when algorithms do better than humans, and when humans do better. People should not be doing frequent, short-term trading on their own. Unless you have a real system or algorithm, you will lose money doing that, and the more you trade the faster you will lose.

Long-term investing is different. Until large language models came along, AI could not help with decisions like whether to buy Nvidia or SpaceX, since those require thinking through uncertainty and imagining future scenarios. That used to be a purely human exercise.

Now LLMs can think through those decisions with you, which makes them useful partners. But trusting them blindly is a mistake unless they are grounded in real data. I asked ChatGPT whether to go long on Nvidia, BYD and the S&P 500, among other names, and got an answer. I asked again later and got a different one. The variance is real, and it’s highly sensitive to how you frame the question.

MarketWatch: You built an AI tool around one specific investor’s thinking. What is it?

Dhar: It’s called the Damodaran Bot (DBOT), after Aswath Damodaran, the “dean of valuation.” You ask it to value a company the way Damodaran would, based on a specific investment thesis you give it.

It uses a free cash flow to the firm approach, based on four key drivers: operating margins; revenue growth; weighted cost of capital; and reinvestment efficiency, measured through a company’s sales-to-capital ratio. It’s all standard methodology that Damodaran has made publicly available.

The advantage of the DBOT is speed. While Damodaran might publish one or two valuations a month, the bot can run that same analysis across the entire S&P 500 with the push of a button.

MarketWatch: Has the bot ever disagreed with what Damodaran would have concluded himself?

Dhar: Yes, and SpaceX is a good example. The IPO valued the company at $1.77 trillion. Damodaran’s own valuation came in around $1.2 trillion. The bot’s number was roughly $600 billion, less than half of Damodaran’s figure, making it even more bearish than the human it was modeled on.

The bot ran a deep analysis on SpaceX’s three businesses: the rocket-launch business, Starlink and the AI business built around xAI. It found too much uncertainty in the AI segment, which requires massive capital spending with an unclear payoff. Damodaran’s own analysis took the company’s numbers more at face value than the bot did, which pushed back against some of the assumptions.

The bot’s report shows a table comparing its assumptions for those four value drivers for SpaceX against the market’s assumptions, letting investors decide for themselves which numbers look reasonable.

MarketWatch: If someone has money to invest, would you trust AI to help decide where it goes?

Dhar: That depends entirely on the person. The first question is whether you’re genuinely passionate about investing, or just trying to grow money on the side while working a full-time job. The answer differs in each case.

If you don’t have the time or interest, put the money in an index you believe in. If you believe in the long-term growth of the United States, buy the S&P 500 and forget about it. If you believe a handful of companies will keep dominating technology, invest — but still do the research yourself.

Would I trust AI to make that decision for me? No, not unless I had a system whose outputs I’d already tested, and I’d want to see how credible its answers are and how much they change with a different thesis. I would never just ask an AI whether to go long on a stock and act on the answer alone. That would not be a good idea.

MarketWatch: What is the bear case on AI in investing? Does it ever get dangerously wrong?

Dhar: All the time. AI can be wrong, just like people can. But one question I’ve started getting from reporters is what happens if AI gets so good that everyone starts using it. Does that raise systemic risk?

The answer is yes, because it creates herding. If everyone trusts the same AI and acts on the same signal, you could get bigger shocks to the system when something goes wrong. In a strange way, AI starts to become the market itself, and outperforming the market means knowing when the AI is wrong.

We’re not at that point yet — not even close — but the scope of AI in finance is expanding. I’ve thought about whether AI could eventually play a role of a central banker, detecting bubbles or risk buildup that humans might miss. We genuinely don’t know yet whether on balance AI will lead to more stability or volatility. A lot depends on the checks and balances we put in place.

AI changes where the real work happens. People can ask the machine to run the analysis and spend their own time asking better questions instead. I recently wrote a piece asking whether I’m becoming obsolete, as a portfolio manager and a professor, since machines can now do so much of what I used to do by hand. The short answer is yes, but only as long as they can ask the right questions and interpret intermediate results correctly.

MarketWatch: Your fund, SCT Capital, still trades using machine learning. What was it like bringing these methods to Wall Street in the 1990s?

Dhar: Both exciting and difficult. When I went to Morgan Stanley in 1994 after several years in academia, Wall Street was full of physicists and economists. The physicists liked physical models, and economists liked linear models, so machine learning didn’t fit cleanly into either camp and was viewed with suspicion.

It left plenty of low-hanging fruit for me. I’d already seen machine learning work well at ACNielsen in identifying and predicting consumer buying patterns, and I brought those tools to trading. Fortunately, they substantially improved the performance of the proprietary trading group I worked with. I kept building AI models at Morgan Stanley and Deutsche Bank, then spun out SCT Capital as an independent firm in 1998.

The methods I use have evolved since, from machine learning to deep learning to what we have today. I now use vision models, the same technology that powers driverless cars, and I work with sovereign wealth funds on systematic signals for commodities trading. My algorithms trade every day using AI.

MarketWatch: When did it become clear that AI had crossed into something fundamentally new?

Dhar: Things look different from the inside than the outside. Around 2015 and 2016, machine translation started becoming genuinely good, almost perfect in some language pairs. That was an early sign we were starting to crack natural language.

The real turning point was in 2017, marked by the publication of a paper out of Google called Attention Is All You Need, which introduced the architecture behind today’s large language models. By the time ChatGPT launched in 2022, it wasn’t much of a shock to people in the field, but it was a pivotal moment for AI, showing that it could engage in a coherent conversation about anything with anybody in natural language.

What ChatGPT did was turn AI from a narrow application into something everyone could use and identify with. That was the real moment of transition, from an application to a general-purpose technology anyone could use. That’s the world we’re in now.

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Annie Duke was at one time among the world’s most successful poker players, winning the World Series of Poker Tournament of Champions and the NBC National Heads-Up Poker Championship. She is now a sought-after decision strategist, working with investors, executives and venture firms on how to make better decisions when faced with uncertainty. She is the author of several books, including “Thinking in Bets” and “Quit: The Power of Knowing When to Walk Away."

In this recent interview, which has been edited for length and clarity, Duke shares the three-step framework she uses to evaluate markets that look like bubbles, talks about why the most common investment advice is both right and wrong at the same time, and identifies the trap that quietly destroys investors who confuse lucky outcomes with good decisions.

MarketWatch: Investors once again are faced with a decision to either chase the stock-market rally or hold back. What’s the best way to judge a frothy market?

Duke: The starting point is what I call the base rate. What has historically happened in situations like this one? If you’re looking at how high the market is, how long it has been rising and how it’s priced relative to history, that tells you whether things look normal or whether you’re in territory that has preceded corrections before. It doesn’t mean a correction is coming. It just helps you understand where you are.

From there, you ask: Is something genuinely different this time that would make the current valuation sticky? A classic example is Amazon in 1999. It was getting a far higher multiple than traditional retailers. But a reasonable person could argue it was different enough — no physical locations, a tech component and a much broader potential upside. The comparison wasn’t quite right.

The third step is to cast yourself into the future and imagine you were wrong. If it turns out this was just like every other cycle, what were the early signals you probably ignored? Writing those down in advance gives you an exit ramp. You’re not locked in to a bet you can’t get out of.

MarketWatch: What did poker teach you about investing that a finance textbook can’t?

Duke: Poker forces you to really accept how little you know and how much luck is in the system, and then to still make your best bet anyway. The key skill isn’t certainty. It’s making good decisions under uncertainty and then changing your mind quickly when new information arrives. People who cling to their initial belief in poker get into serious trouble.

Finance textbooks teach you about confirmation bias and expected value. But when you’re iterating so quickly in poker — hand after hand, decision after decision — it gets into your bones in a way that reading about it doesn’t. You develop a feel for probability that you can’t get from doing equations.

MarketWatch: Most financial advice says to never sell in a bear market. Is that good advice?

Duke: Mostly, yes. But understanding why helps you apply it correctly. On its own, a stop loss is technically irrational. Any decision to buy or sell should be based purely on the underlying value of the asset. But we know that once people own something, they become terrible at evaluating it objectively. Loss aversion, sunk-cost fallacy and herd behavior — all of it kicks in during a drawdown. A stop loss is an irrational tool deployed to prevent something even more irrational.

It’s like throwing unhealthy food out of your house. Logically, you should just choose not to eat it. But you throw it away anyway because you know that a future version of you, tired and stressed at the end of a long day, is going to make a worse decision. So you protect that future self in advance. “Never sell in a bear market” is the same idea. It’s stopping you from panic-selling into a herd. For the average retail investor, it’s good advice.

People chase other people’s returns without asking whether those returns came from skill or luck.

MarketWatch: What investment advice do people give that leads others astray?

Duke: Two things happen constantly. First, people chase other people’s returns without asking whether those returns came from skill or luck. A large return in isolation should actually make you suspicious. It usually means high volatility, which means a lot of the result was luck. Second, people compare their performance to the wrong benchmark. If your adviser made you 11% in an 18% market, that’s not good. If they made you 11% in a 5% market, that’s worth paying attention to. But people skip the comparison entirely.

The deeper issue is regression to the mean. We look at last year’s top performers and assume they’ll repeat. Fund managers do this with allocators all the time. They’re pruning good investors who had a down year and keeping mediocre ones who got lucky. We’re just not wired to think about mean reversion.

Just because you do well in the short run doesn’t mean you made good decisions. And just because you do poorly doesn’t mean you made poor ones.

MarketWatch: You use a term called “resulting.” What is it, and why does it matter?

Duke: Resulting is when you equate the quality of an outcome with the quality of the decision that produced it. Winning a poker hand doesn’t mean you played it well. Losing doesn’t mean you played it poorly. There’s luck in the short run, and a good decision can produce a bad outcome, while a bad decision produces a good one.

The investing version of this is everywhere. Someone invested in Zoom in 2019 and made a fortune when the pandemic hit. They may have had a legitimate thesis about video conferencing’s future. But they did not forecast a global pandemic. Taking full credit for that outcome is resulting. It wasn’t in their decision — it was an act of luck.

The fix is to write your reasoning down before you invest. What do you think the distribution of outcomes looks like? What are you actually betting on? Then, when you get results, you can compare them against your forecast, not just the number in your account.

People get so uncertain that they stop making decisions entirely, not realizing that doing nothing is itself a decision.

MarketWatch: What’s your best advice for investors right now?

Duke: For retail investors, historically speaking, the answer is what it’s always been: Get into low-cost exchange-traded funds or index funds and stay in the market across all cycles. The reason individual stock-picking is so dangerous is that if you believe markets are even somewhat efficient over the long run, you have to ask yourself what you know that the experts don’t. Because you like a brand at the grocery store isn’t an answer.

The bigger mistake I see is paralysis. People get so uncertain that they stop making decisions entirely, not realizing that doing nothing is itself a decision. You’re implicitly saying that whatever you currently hold is the best allocation in this environment. Great investors lean into uncertainty. They recognize that you’re always forecasting, always investing into an unknown future. The question is whether you’re doing it with a clear framework or just hoping.

Michael Sincere is the author of several books including “Understanding Stocks,” “Understanding Options” and “Help Your Child Build Wealth.”

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Brad Jacobs is a serial entrepreneur with a noteworthy track record as a Wall Street investor and business builder. He has founded and led eight companies, all of which grew into billion-dollar or multibillion-dollar giants. He has completed around 500 M&A transactions and raised more than $50 billion in debt and equity capital, including three IPOs.

His companies include United Waste Systems; United Rentals; XPO and its two spinoffs, GXO Logistics and RXO; and, more recently, QXO, where Jacobs serves as chairman and CEO.

Jacobs is the author of “How to Make a Few Billion Dollars” and “How to Make a Few More Billion Dollars.”

In this recent interview, edited for length and clarity, Jacobs shared his tips on finding businesses to invest in and creating effective management teams to run them. He confessed to the mistake that cost him $500 million, and gave the secrets of building billion-dollar businesses that last.

MarketWatch: You’ve built eight multibillion-dollar companies across different industries — waste management, equipment rental, logistics and building-products distribution. How do you decide which industry to go into, and what are you looking for?

Jacobs: For my skill set, building-products distribution — supplying construction materials to contractors and builders — is the best opportunity right now. It’s a large, highly fragmented industry with 20,000 distributors between here and Western Europe, which gives you room to consolidate and scale.

There’s also an opportunity to apply cutting-edge technology. Fragmentation lets you lower costs, improve logistics and generate more cash flow. When you reinvest that cash into technology and M&A, it’s a virtuous flywheel.

We target industries that are tech-backward. I like it when incumbents are operating on outdated systems because that creates a substantial opportunity to leapfrog competitors with modern integrated technology.

‘The world is not constrained by money. It’s constrained by ideas and talent.’

The building-products-distribution industry has strong secular tailwinds — chronic housing shortage, aging homes, old commercial buildings. Over the next decade, there will be more construction, more repair and remodeling. On top of that, there’s $2 trillion needed to fix infrastructure.

This is the same playbook we’ve used successfully over and over again. We built United Rentals into the world’s largest construction-equipment rental company in just 13 months, and it became the sixth best-performing Fortune 500 stock the last decade.

MarketWatch: With a career spanning 500 M&A deals and decades in business, you’ve obviously learned from experience. What mistakes cost you the most money, and what did you learn from them?

Jacobs: The mistake that cost me the most money happened when I was at United Rentals. We bought a bunch of road rental companies — all those orange barricades and cones and striping you see on the roads. I did that to capitalize on expected federal government legislation, which was passed, and it was supposed to spend hundreds and hundreds of billions of dollars to repair the nation’s infrastructure.

The government spending never fully materialized. That part of the business was a bad performer, and we decided to sell it at a big loss — a $500 million loss. That was very painful.

I counted 100% on the government doing what it said it was going to do. That was naive. In the world of business, you have to say exactly what you believe, then do exactly what you say. The world of politics is more malleable and short-term. Sometimes politicians say they’re going to do stuff and it doesn’t get done.

MarketWatch: QXO recently made its second big acquisition, buying Kodiak Building Partners for $2.25 billion. What did you like about that deal?

Jacobs: Kodiak is a national distributor of essential building products, including lumber, trusses, windows and doors, construction supplies, waterproofing and roofing, with 110 locations across 26 states and about 5,500 employees serving more than 10,000 customers. This deal triples QXO’s existing market opportunity and expands our total addressable market to over $200 billion. It puts us in nearly every major building-products category.

Plus, Kodiak holds No. 1 or No. 2 positions in many of its local markets, including higher-growth areas like the Sunbelt and Mountain states. It operates in highly fragmented segments that give us a substantial runway for consolidation, which aligns perfectly with our long-term goal of becoming a $50 billion revenue company.

We got it at a great price, paying 10.7 times 2025 Ebitda of $211 million. When you include synergies, the Ebitda multiple is about 7.3 times. The timing is good, too. We believe we’re buying at the bottom of the housing cycle, so there’s clear operating upside.

MarketWatch: Many investors are looking for opportunities, whether as entrepreneurs or shareholders. What would you tell them?

Jacobs: That depends. Our strength is M&A and integration — buying companies well and improving their profits. So for us, consolidation in large, highly fragmented, tech-backward industries is the right strategy.

But that may not be for everybody. Some people want to grow organically — find something scalable that you can rinse, wash, repeat and grow by opening more locations, like McDonald’s or Walmart did.

When people ask me what industry they should go into, I ask them back: What are your superpowers? Find an industry that matches those superpowers, and make sure you’re on the right side of the long-term trend.

I learned from a successful mentor that you can get a lot of things right, but if you don’t get the major trend right, it’s for naught. On the other hand, if you get the big trend right, you can mess a lot of things up and still do really well.

MarketWatch: One thing people always wonder is how much capital they need to get started. How much startup capital do you think would be needed nowadays to grow a business into an industry giant.

Jacobs: I started my first business when I was 23 years old in 1979 with $5,000 left over from my bar mitzvah money, and that business grew to a billion dollars. You don’t need lots of money.

The right frame of mind is more important than capital. In my second book, I list 269 sources of equity capital that manage $32 trillion. There is so much capital in the world, it’s ridiculous. There is, however, a shortage of powerful ideas and fantastic management teams.

If you’re thinking, “I won’t be able to get the money for my great business idea,” that is a psychological fallacy. That is a mental roadblock you’re inflicting on yourself. The world is not constrained by money. It’s constrained by ideas and talent.

MarketWatch: Let’s get practical. For the average reader who wants to build serious wealth, how can they actually make it?

Jacobs: Again, understand what your superpowers are. Find an industry that matches your skill set. Devise a strategy to capitalize on the big trend you see. What big problem are you solving for customers?

Then assemble a group of very bright, hardworking, collegial, honest people and lead that team. Have a culture where you can respectfully disagree with each other. Use technology to eliminate waste and become more productive.

Set very ambitious goals that initially seem unattainable. If you think huge, you will expand your vision and motivate yourself to go beyond perceived limitations. It’s not the money, it’s the mindset.

‘If you think huge, you will expand your vision and motivate yourself to go beyond perceived limitations. It’s not the money, it’s the mindset.’

MarketWatch: You mentioned assembling talented teams. If you had to identify the single most important factor in your success, how important is hiring the right people?

Jacobs: Do they have fire in the belly? Are they smart? Are they collaborative? I always hire people who have a higher IQ than I do. I want to be surrounded by people who are more intelligent than I am.

I say it almost every day: “Teamwork makes the dream work.” You can’t accomplish great things without a team. I’ve never accomplished anything by myself. If I had to identify the single most important reason why my companies have been so successful, it would be the quality of the people on my teams.

I give senior people lots of equity, but I like it to vest over many years. The senior executive team at QXO owns about 30% of the company, but the vast majority is locked up for six years. People are thinking about long-term decisions, not short-term ones.

MarketWatch: Running multiple billion-dollar companies means making thousands of high-stakes decisions. How do you approach risk and decision-making?

Jacobs: I make mistakes every day because I’m making thousands of decisions. If your goal is only making decisions when you have 100% certainty, you’re not going to make a whole lot of decisions. You need to take some risks. You need to evaluate risk objectively. Understand the probability that the decision is right. If it turns out to be wrong, can you live with that? Is the downside correctable and not fatal?

When I’m analyzing a problem early on, I want to be testing every scenario, poking around for where I could be wrong. I’m a big believer in dialectical thinking — looking at situations from multiple perspectives. But once we’ve made the decision, I do want to be confident. I want to execute with speed. If you’re going to be an effective leader, you have to have confidence in your decisions.

MarketWatch: Looking at everything you’ve accomplished — 500 acquisitions, $50 billion raised, multiple 50-bagger and 200-bagger stocks — what’s your best advice for someone who’d like to be in your position one day?

Jacobs: In business, success comes from the ability to spot big trends, build highly talented teams that get along with each other, and rearrange the way you think so that you can solve big problems for customers. I found this to be a repeatable process that works across industries.

I spend significant time meditating and doing thought experiments. The purpose is to create a cumulative effect where you’re in the zone and thinking clearly throughout the day. I don’t think I would have been able to do 500 acquisitions or raise over $50 billion if I had been super stressed out and not thinking clearly.

Michael Sincere is the author of several books, including “Understanding Stocks,” “Understanding Options,” and “Help Your Child Build Wealth.”

Link to MarketWatch column: Link

From Pre-Med to Financial Educator: How One Gen Z Creator is Changing the Conversation About Money

Taylor Price, known online as @PricelessTay, is a Gen Z financial educator on a mission to close the financial literacy gap for young adults. After briefly training for medical school, she pivoted to finance. She earned her degree in finance and management from the University at Albany, all while recovering from spinal fusion surgery that also helped shape her perspective on resilience and control. 

In early 2019, Price launched a personal finance blog that quickly evolved into a multi-platform brand, boasting more than a million TikTok followers and supported by active communities on Instagram and YouTube. Through her content, she emphasizes that financial literacy isn’t just for the wealthy, but a tool for empowerment: “Once you know your worth, you stop settling in jobs, in relationships, and in money,” she said. 

Price is also the founder of Fifecta, a platform designed to help Gen Zers automate savings, understand investing, and build confidence in managing their money.  

In this recent interview, edited for length and clarity, Price discusses retirement, financial independence, and how Gen Z is changing the conversation about money.

MarketWatch: What first made you realize there was a gap between studying finance and understanding personal finance?

Price: When I switched to finance as a major in college, I was expecting to learn the basics—how to file taxes, what a credit score means, and why any of it matters in my own life. Instead, I was thrown straight into discounted cash flows, financial modeling, and complex statement analysis. I could value billion-dollar companies, but I had no idea how to manage my own paycheck. 

When I asked my academic counselor if there were any courses on personal finance, the answer stunned me: “Nope, we don’t have anything.” A respected university, a finance degree, and not a single required class on managing personal money. You could graduate knowing how to price an IPO but not how to build a budget. The absurdity of that hit hard.

MarketWatch: How did you bridge that gap for yourself and others?

Price: I did what any young person would do: I talked about it online. I started a blog that documented my journey. I'd write things like, "Hey, I'm in college as a finance major, but I'm starting my own financial path now. My mom told me about this thing called the Roth IRA. I'm opening it up at 18 years old. Here's why maybe you should check this out too." Or, "I'm applying for my first credit card. This is what it means.” At the time, I was using MarketWatch and Investopedia to teach myself, then turning around and sharing what I learned. 

MarketWatch: What's the most important financial concept you try to teach?

Price: Compound interest, hands down. Einstein supposedly called it the eighth wonder of the world, and once you see it in action, you understand why. It's not just about saving money. It’s about time being your greatest asset.

Here's the example I show everyone: Invest $500 a month starting at age 25, and with an average return of 8%, you'll have approximately $1.7 million by age 65. Wait just 10 years and start at 35 with that same $500 monthly investment? You'll end up with around $745,000. Same effort, same discipline, same monthly contribution, but that decade of delay costs you nearly a million dollars.

 That's not a penalty for doing something wrong. That's the cost of simply waiting. Time is the secret ingredient, and you can't buy it back.

MarketWatch: What's your advice for young people just starting?

Price: Start now. Not next year, not when you get a "real job," not when you're making more money, but now. Even $50 a month at age 18 will outperform $500 a month starting at 30. You can't make up for lost time in investing, no matter how much money you throw at it later.

My number one tool for young people? The Roth IRA. As of 2025, you can contribute up to $7,000 a year, and here's the magic: every dollar of growth is completely tax-free. You're investing with after-tax money now while you're likely in a lower tax bracket, and when you withdraw it in retirement, the IRS gets nothing. Not a penny.

Think about it: 40 or 50 years of compound growth, and you never pay taxes on any of those gains. That could easily be hundreds of thousands of dollars staying in your pocket instead of going to the government. That's generational wealth-building power.

MarketWatch: How do you think Gen Z’s definition of financial success differs from previous generations? 

Price: Our parents' generation was laser-focused on homeownership. It was the pinnacle of success, the American Dream. Gen Z? We've watched housing prices skyrocket while wages stagnated. We saw our parents lose homes in 2008. We're redefining what success looks like.

Gen Z doesn't want to be house-poor. They want financial freedom, the ability to work because they want to, not because they have to. They want flexibility, experiences, and autonomy. They'd rather invest in index funds and travel the world than tie themselves to a 30-year mortgage and a picket fence. That's not irresponsibility. That’s a fundamental shift in priorities, and my content reflects that reality.

MarketWatch: What does financial freedom mean to Gen Z?

Price: For Gen Z, financial freedom isn’t about owning a house. It’s about owning your time. That’s where Coast FI comes in. It means investing enough early that compound growth alone can carry you to your retirement goal.

If your target is $2 million and you’ve built around $400,000 in your early 30s, you could stop contributing and let time do the rest. The money you were saving each month becomes freedom to take a lower-paying job you love, start a business, or travel.

The goal isn’t to stop working; it’s to stop being trapped by work. Most people work until they can afford to quit. Coast FI  flips that: your future is secured, so you work because you want to, not because you have to. That’s true financial freedom.

MarketWatch: Speaking of retirement, what are your thoughts on the concept?

Price: I don’t believe in traditional retirement, and the data backs that up. In places like Okinawa, Sardinia, and Loma Linda, the so-called Blue Zones where people often live past 100, no one really retires. They stay engaged, purposeful, and connected to their communities well into old age.

Compare that with the typical American story: someone retires at 65, plays golf for six months, and then their health declines. I’ve seen it happen. It’s not work that kills people—it’s the loss of meaning.

I’m not saying you should grind forever. Design a life you don’t need to escape from. Financial independence isn’t about quitting. It’s about having the freedom to pursue work that matters, paid or not. The goal isn’t to retire from something. It’s to retire to something better.

MarketWatch: What’s your long-term vision for financial education and the role you want to play in it?

Price: Financial literacy shouldn't be a privilege for those lucky enough to have parents who know this stuff or live in the right state. It should be universal. Every young person deserves to understand how money works before they're drowning in student loans or credit card debt.

Link to MarketWatch column: Link

Suze Orman is a two-time Emmy Award–winning television host, ten-time New York Times bestselling author, and a two-time honoree on Time’s list of the 100 most influential people. Widely recognized for her work in financial education, she now hosts The Women and Money Podcast and co-founded SecureSave, a company focused on workplace emergency savings programs. 

In Part 2 of this recent interview, edited for length and clarity, Orman discusses financial independence, key policy changes under the Trump administration, common pre-retirement mistakes, and whether there can ever be another Suze Orman. 

MarketWatch: How do you define true financial freedom, and has your definition changed over the years? 

Orman: Over the years, my perspective has changed. I started with my book, The Nine Steps to Financial Freedom, and at first, I thought having a lot of money meant being financially free. But I came to realize that real freedom isn’t about how much money you have. It’s about understanding and managing the money you do have. In fact, I think ‘financial independence’ is a better term. When you’re financially independent, you’re no longer dependent on financial advisors who may give you self-serving advice. 

Second, true financial independence means that if you couldn’t work, whether because of illness, an accident, or any other reason, you would still be secure. You’d have enough money, either generating income or available as principal, to cover your expenses for the rest of your life. 

 MarketWatch: Is financial independence about making more money?

Orman: The real key isn’t just making more money — it’s cutting your expenses. I have a new motto for my podcast: make your money make more money. How? By not wasting it on interest, debt payments, or car loans.

Often, when people build wealth, they end up spending more, buying a bigger house, a nicer car, fancier clothes, and luxury watches, and all the accoutrements that show the world how much money they’re making. In the meantime, their bills have gone up while their savings and investment contributions have decreased. That makes absolutely no sense whatsoever. 

MarketWatch: What should they do? 

Orman: Stop spending money you don’t have to impress people you don’t even like. That’s the trap. Don’t do retail therapy. Don’t fill the emptiness with stuff. Fill your bank account instead. 

If you live below your means but within your needs, financial independence becomes far easier to achieve, which I’ve been saying since the cows came home. One of the biggest mistakes people make is retiring with a mortgage. If you plan to stay in your home forever, pay it off before you retire. Using retirement savings to cover interest and mortgage payments is such a waste of money in the long run. Pay it off. 

MarketWatch: Who’s the next Suze Orman of the upcoming generation?

Orman: There isn’t one, and I don’t want there to be. Why? Because the next great voice in money should be their own, not a copy of me. Don’t try to be me, because you can’t. You need to be you. When I first started at 30, I had to learn the hard way, by investing people’s money, losing it, and feeling that pain. That’s how you really learn. On TikTok today, it’s different. On TikTok, you may be watching someone who is handing out advice without considering the ramifications of giving wrong information. 

MarketWatch: Is it challenging to give financial advice to the masses? 

Orman: The problem with blanket advice is you don’t know who’s listening, or what their situation really is. That’s dangerous. Money isn’t just numbers; it’s emotions. I learned a long time ago that fear, shame, and anger are the biggest inner obstacles to wealth. It doesn’t matter how much money someone has. If they’re scared, they’ll buy and sell at the wrong times. So when you tell someone to ‘buy XYZ,’ are you sure it’s right for them? Maybe they just went through a divorce, a death, or a breakup. Perhaps they’re drowning in credit card debt at 20% interest. They may not have an emergency fund. Maybe they’re not matching their contributions in a 401(k). Until you personally know about them, your advice could do more harm than good. 

MarketWatch: Are there any parts of the One Beautiful Bill Act (OBBA) that will have a positive impact on investors? 

Orman: I get it—half the people out there can’t stand Trump. But politics aside, parts of this tax plan will have a negative impact, while others will really help. The higher standard deduction, about $15,000 single, $31,000 married, is a big win. Seniors get an extra break, the child tax credit went up to $2,200 per child, with $1,700 refundable, and the $500 dependent credit was made permanent. Tips and overtime are now eligible for new deductions, the SALT cap has been lifted to $40,000, and some charitable and loan interest breaks have also been expanded. For details, I break it all down on the Women & Money podcast.

MarketWatch: What’s one investment that you really think is a big mistake?

Orman: One of the biggest mistakes you can make is handing your retirement savings to a target-date mutual fund, the kind that invests automatically based on your retirement year, such as 2030, 2040, or 2050. Target-date funds? They’re for people who don’t want to think, and that’s never a good strategy. You never invest based on age or a specific date on a calendar. You invest based on your own circumstances: how much money you have, your income streams, your risk tolerance, your health, and what’s happening in the economy. Think about it: if you were about to retire in 2021 or 2022 and your target-date fund was loaded with bonds, you’d get crushed when interest rates skyrocketed. That’s the danger. 

MarketWatch: How should someone plan for inflation and the loss of a spouse after retirement?

Orman: You always have to plan for inflation because prices rarely go down. But here’s what people miss: when you lose a spouse, expenses often go up, not down. Loneliness makes you spend. You travel more to see family, you go out with friends, you fill the void. Meanwhile, you’ve lost a Social Security check and maybe part of a pension. So, the costs rise just when your income falls. That’s why planning for inflation isn’t optional. It’s survival.

MarketWatch: It used to be that buying a home was a path to wealth. Is that still true?

Orman: No. It may actually be a path to poverty. A home is no longer the guaranteed foundation of financial independence, and there are two big reasons: weather and insurance. I know people in Florida who owned their homes outright but had to walk away because insurance skyrocketed to $2,000 a month. Others in California lost everything to wildfires when insurers denied coverage. Even condos aren’t safe. Owners faced double- or triple-digit assessments, wiping out any chance of appreciation. 

On top of that, property taxes, repairs, and catastrophic events such as fires, floods, hurricanes, and tornadoes are more common than ever. Now, if you have money to absorb those shocks, buying a home can be financially rewarding. Because climate and insurance have become factors, you need to think twice before buying. 

MarketWatch: Is a college education worth it today? 

Orman: Maybe, but at what cost? Student loans aren’t what they used to be. Subsidized loans are gone, repayment terms are tougher, and graduate loans can easily reach $200,000. Interest starts accruing immediately, and the old six-month grace period no longer applies.

Here’s the truth: If you can’t comfortably afford tuition without jeopardizing your own financial stability, you need to stand in your truth and have an honest conversation with your kids. You are not a bad parent if you can’t send your child to a $65,000-per-year school. There’s nothing wrong with starting at a community college for two years, especially if scholarships aren’t available. We must also face the reality of AI’s effect on the future of the job market. Maybe it's time we start looking at blue-collar careers as a great alternative. Electricians, plumbers, mechanics, carpenters, and boat captains. Hmmm. It’s something to think about. 

MarketWatch: How do people get into credit card debt? 

Orman: They are spending money they don’t have to impress people they don’t know or like. Credit card debt isn’t just about money. It’s about I want it and I want it now, or trying to to fill a void, so you buy something. Unless you understand why you’re in debt, you’ll never get out of it. That’s why people who declare bankruptcy once declare it twice, because they fix the numbers without fixing themselves. You can pay off the balance, even get a windfall or inheritance. Bottom line: You have to go within to see why you are doing without. 

MarketWatch: What's the biggest money mistake that Gen Z (ages 15 to 27) is making right now? 

Orman: Gen Z is excited about investing, and that’s amazing. However, too many are skipping the foundation. They know every TikTok trend but not enough about the basics such as compound interest, Roth accounts, or the power of starting early. By their late twenties, those gaps start to show: paying too much for rent, ignoring free money from workplace retirement matches, not having an emergency fund, and choosing the wrong accounts. Instead, they lean into “buy now, pay later,” impulse spending, or investing without a safety net. And here’s a big one: when they finally save for retirement, many choose a traditional 401(k) instead of a Roth. That’s trading a small tax break today for a lifetime of bigger taxes later. Think about it. You’re basically signing up to let Uncle Sam be your permanent business partner.

The bottom line is that Gen Z wants to build wealth, and they can, but skipping the safety nets makes everything shaky. A Roth, an emergency fund, and smart use of workplace benefits aren’t boring. They’re the launchpad for financial independence. 

MarketWatch: What are the biggest mistakes people make with insurance and retirement planning?

Orman: Never, ever use life insurance as an investment. Whole life, universal life, and variable life are some of the biggest rip-offs out there. Insurance was never meant to be a permanent need. It was intended to cover you in case of a premature death until you’ve built enough assets to take care of your family. If you need life insurance, buy term. Period.

And while we’re at it, never put a tax-deferred product inside a tax-deferred account. I can’t tell you how many people roll over $500,000 into an IRA only to have some broker stick it in a variable annuity. Why would you double up on tax deferral? That makes no sense. And those variable annuities with guarantees? You only get your money back if you die. Meanwhile, you’re paying surrender charges and fat commissions to the advisor who sold it to you. Don’t fall for it. You could’ve just bought a no-load mutual fund or ETF.

Link to MarketWatch column: Link

Hemant Taneja is a venture capitalist, author, and CEO of General Catalyst, recognized for his insights into how artificial intelligence (AI) is reshaping industries and economies. An MIT graduate with multiple degrees, Taneja was an early investor in companies such as Stripe, Snap (SNAP), Grammarly, and Anduril, with a focus on applied AI, healthcare transformation, and responsible innovation. 

His new book, The Transformation Principles: How to Create Enduring Change (co-authored with Kevin Maney), outlines nine principles for creating sustainable change. Under his leadership, General Catalyst has raised billions while emphasizing ethical AI deployment.

In this recent interview, edited for length and clarity, Taneja discusses how individuals and companies can transform themselves, mentions AI stocks with growth potential, outlines the risks of AI, and explains why it represents both a huge opportunity and a challenge. 

MarketWatch: What’s the central message of your new book, and why is it timely now? 

Taneja: We are entering a technology cycle where AI is going to be a transformative force, and it’s going to transform many industries. There is an opportunity to actually make capitalism work for everybody if we make the right intentional choices.

MarketWatch: What does a company need to do to have a successful transformation? 

Taneja: For an organization to be transformative, it needs to have a culture of curiosity and generosity. They need to transform, but not disrupt. Disruption is the alternative to transformation.

MarketWatch: Should an individual begin transforming themselves today?  

Taneja: You have to. Steve Jobs said that first we have to change ourselves, then we change our industry, and then we change the world. We have to transform ourselves to deliver greater value and then gain the ability to transform the industries that we work in.

MarketWatch: Is AI going to be more transformative than the internet? 

Taneja: It will be bigger. When the internet came, it was all about making things more efficient, but humans were still doing the work, and software was making them more efficient. With AI, you're basically saying it will do the same job as a human for the most part. When ChatGPT first arrived, every CEO in every industry and in every country was thinking about what to do with it. It was the first time a technology hit the zeitgeist across the entire world at the same time (i.e., it became a global cultural phenomenon).

MarketWatch: Many employees fear that AI means job loss. How can leaders introduce it in a way that builds trust and gets people on board?

Taneja: Change is scary for a lot of people which is why trust matters. If AI people came into your company and said to your employees, “We are going to transform your business,” the natural response is that you’re going to kill their jobs. That’s because you didn’t take the time to build trust. Instead, tell them, “We're going to bring in this technology that will make you more effective and help you grow.” They would embrace it. 

MarketWatch: Which companies are getting AI adoption right today? 

Taneja: In my book, I talked about companies such as Applied Intuition, Hippocratic AI, Stripe, and Commure.

MarketWatch: Are there any AI companies that you believe have the most long-term potential? 

Taneja: Some of the AI model companies are obviously doing very well. If you look at the consensus, it would be OpenAI and Anthropic. There are also open-source companies, such as Mistral, that are building AI models that are quite interesting. There are also companies that are imagining modern call centers, the evolution of the legal department, how accounting is being done with AI, how marketing and sales are going to be done using AI, and how to empower sales reps. Those types of companies are going to be very, very interesting over the next ten years.

MarketWatch: What do you see as the biggest risks of AI adoption? 

Taneja:  We are going to transition from a culture of solving problems to a culture of asking questions, which will be a big transition. We want to make sure we're not losing our cognitive capabilities, our ability to think, and our ability to solve problems. How do you make sure you're using AI to improve what you're doing, but not using AI to be lazy and not think? There is a trap you can fall into, whereas these technologies get better and better, and you stop thinking. Think about how to get from point A to point B today. People turn on the map program and lose all touch of how things are laid out physically. You don't want that to happen to all concepts in your brain. It is a downside if we become too reliant and give up sharpening our own cognitive skills.

MarketWatch: What are the key steps leaders must take to successfully integrate AI into their organizations?

Taneja: There are four steps leaders must take to make AI work: First, they have to change their data infrastructure and their IT (information technology) department so they can adopt AI. Then they must train them with the data. Next, they have to change their workforce because they now have humans and AI working together. What a lot of CEOs got wrong is they didn’t realize that the only way a profound change will happen in their company is if they demonstrate courage and conviction. They have to encourage their people to take risks and show them how it will make them more successful. Otherwise, people get scared, and they won’t use it. That’s how a lot of organizations get stuck. 

MarketWatch: What is the biggest cautionary lesson leaders should keep in mind as they adopt AI? 

Taneja: There will always be those who use it for societal harm. We have to trust the system to build the right guardrails. Over time, this technology will be properly regulated in terms of who gets access to it and how it gets applied. Like any new technology, it could be bumpy. I have an optimistic view that human beings will find a way to leverage these profound technologies for good in the aggregate, such as what happened with nuclear. 

MarketWatch: With AI reshaping so many industries, how can employees protect their careers and make sure they thrive in an AI-driven workplace?

Taneja: The most concrete and useful advice I can give is to learn how to adopt AI to do your job more effectively. That's really what you should be doing. This means asking the right questions (i.e., prompt engineering) and being more strategic in your own work. It’s a huge opportunity for employees. In our company, we’re encouraging everybody to use AI to do their jobs to a greater degree.

MarketWatch: What guidance would you give recent graduates entering today’s fast-changing job market?

Taneja: To understand that the world is going to change a lot in the next few years. When kids used to graduate ten years ago, they would list all the software they knew how to use on their resume. Now we’re in a world where that software is changing every three months, and you’re constantly having to learn and keep up to be effective at your job. Being a lifelong learner is important. The world is an empty canvas. Let’s have AI shape the world to be what we want it to be. 

MarketWatch: Looking ahead, how do you see AI reshaping society and business in the years to come?

Taneja: AI is a transformative force, and we have an amazing opportunity in front of us to transform society, to transform nations, to transform industries, and to transform our own business with AI with this mindset of abundance, of building companies that are truly focused on purpose and profit. We need to find the ingredients required to be able to build companies that can be agents of such transformations. 

Link to MarketWatch article: MarketWatch

Suze Orman is a two-time Emmy Award–winning television host and the author of ten consecutive New York Times bestsellers on personal finance. She has been named twice to Time magazine’s list of the 100 most influential people and is widely recognized for her work in financial education.

She currently hosts The Women and Money Podcast, where she discusses personal finance topics, and is the co-founder of SecureSave, a company focused on workplace emergency savings programs. Orman’s career spans television, publishing, and entrepreneurship, with an emphasis on helping individuals manage money and plan for financial security.

When Orman was on Fast Money (CNBC) on October 24, 2023, she recommended Palantir (PLTR), Microsoft (MSFT), Amazon (AMZN), Shopify (SHOP), and Broadcom (AVGO). Since then, Palantir has soared over 848%, with Microsoft and Shopify up 54% and 166% and Broadcom up 235%. 

 In this recent interview, edited for length and clarity, Orman shares her top stock picks, her outlook for the market in August and September, the biggest investment mistake she’s made, and her take on cryptocurrencies. 

MarketWatch: Can you name some of the stocks and investments you like right now?

Orman: I continue to favor large technology companies such as Microsoft (MSFT), Meta Platforms (META), and Broadcom (AVGO). Palantir (PLTR) is my favorite stock, which I’ve followed closely, even though it’s controversial. I first recommended it when it was around $7 based on a suggestion from financial strategist Keith Fitz-Gerald. Beyond those big names, I own and still love Apple (AAPL), Advanced Micro Devices (AMD), IonQ (IONQ), and Coinbase (COIN). I also like GE Vernova (GEV), which I started buying around $100 to $150, and is now over $600. I’d also look at JPMorgan (JPM). 

For those who would rather own ETFs rather than individual stocks, the Vanguard S&P 500 ETF (VOO) offers a nice overall participation and allows for partaking in my favorite stock ETFs —VanEck Semiconductor (SMH) can be a good choice. Also, the ETF for bitcoin, iShares Bitcoin Trust ETF (IBIT), is for a small part of your portfolio. For REITs, I like CareTrust (CTRE), but remember that REITS should be held in retirement accounts. 

MarketWatch: For everyday investors, what’s a sensible way to allocate their money right now if they are looking for long-term growth? 

Orman: One simple approach is to dollar cost average and allocate a total of 50% into a broad index fund such as VOO. With the rest, you could divide your money among a handful of strong individual names such as Microsoft, Palantir, Meta, Apple, COST, WMT, Gilead, COIN, VOO, SMH, XBI, and IBIT FOR ETFS. That way, you’re diversified between the overall market and leading companies, rather than putting everything in one place. My broader message is that people should not be investing large sums all at once. Dollar cost average and invest for the long term, and focus on companies or assets you truly understand. 

MarketWatch: Do you have any caveats for investors? 

Orman: Yes, other than your retirement account, do not put one penny in the stock market that you might need within the next five years. Money that you need within five years is not money that belongs in the stock market, period. 

MarketWatch: Do you have any predictions for the stock market? 

Orman: Overall, the market is strong. I would not be surprised to see the S&P 500 cross over 7,000 by the end of the year. This is not your dot-com bubble. 

MarketWatch: Looking back, is there an investing mistake you regret or advice you wish you could take back?

Orman: The biggest mistake I’ve made was thinking I was smart just because I doubled, tripled, or even quadrupled my money, and then selling too soon. I used to believe that when a stock went from $7 to $50, like Palantir, it couldn’t possibly go higher, so I sold, only to watch it keep climbing. Then I’d have to buy back in at $70, which made no sense. The same thing happened with Amazon and Apple. If I had just held on from the beginning and continued to dollar cost average, the gains would have been extraordinary. That doesn’t mean you never sell. 

MarketWatch: You’ve mentioned crypto before. What are your thoughts on bitcoin and how do they fit into a retirement strategy?

Orman: With crypto, there’s a place for it, but only in moderation. Personally, I’d stick to bitcoin ETFs from well-known firms such as BlackRock. I don’t have a problem with that, but I’d want limits, no more than 5% of your portfolio. Otherwise, some people, especially younger investors, might go all-in. Are you nuts? That’s too risky.

MarketWatch: What is your outlook on bitcoin? 

Orman: Bitcoin has become too mainstream to ignore. Big banks such as JPMorgan are involved, and I wouldn’t be surprised to see bitcoin climb higher over time, perhaps $140,000 or $170,000 one day. But don’t forget the risks. If you buy bitcoin directly, you can make more than an ETF, but then you have to worry about storage and trust, especially after FTX collapsed. That’s why I’d rather use ETFs, or even stocks like Strategy (MSTR), which holds a lot of bitcoin on its balance sheet. Crypto can be part of a diversified portfolio, but it should never be your whole portfolio. 

MarketWatch: Some people argue that the market is manipulated or at least heavily influenced by large players. Do you think that’s true?

Orman: What I see is that when traders miss out and there’s trillions of dollars still sitting on the sidelines, the fear of missing out (FOMO) kicks in. At some point, the market tends to pull back, whether that’s natural or influenced, I can’t say for sure. But what often happens is that a sell-off shakes out the weaker hands of people who get scared when prices dip. That, in turn, creates an opportunity for bigger money to step in and drive the market even higher.

MarketWatch: You’ve often spoken about retirement accounts. Do you prefer a traditional retirement account or a Roth IRA? 

Orman:  If you’re eligible, I will always tell you: choose a Roth over a traditional. Yes, with a traditional 401(k), 403b, or Thrift Savings Plan (TSP), your money compounds tax-deferred, but don’t fool yourself. It’s not just compounding for you. It’s compounding for Uncle Sam, too. You’ve literally made him your partner, and one day, he’ll want his share.

In my opinion, the biggest mistake you can make with your retirement accounts is not having them in Roths. With a Roth, you pay taxes upfront—end of story. Every single penny of growth, and every single withdrawal in retirement, is yours to keep. Tax-free. Forever. As well as your beneficiaries. 

And don’t think you’re locked out just because of income limits. Regardless of what you earn, there are always ways to get money into Roth accounts. If you don’t, are you nuts? In the end, with a traditional retirement account, Uncle Sam will take a big bite out of your retirement savings and it will affect taxation on Social Security, Medicare Part B premiums, and your Required Minimum Distributions (RMDs). This is not true in a Roth, so don't make Uncle Sam your partner. (Editor note: If you want to hear more details, listen to Orman's April 21, 2024 podcast.) 

MarketWatch: What final piece of advice would you give investors?

Orman: Always trust yourself more than you trust others. After all, what happens to your money directly affects the quality of your life, not your financial advisor's life, insurance agent’s life, banker's life, but your life. Finally, don't let your fear of loss keep you from incredible gains. 

Michael Sincere is the author of books including “Understanding Stocks,” “Understanding Options," and “Help Your Child Build Wealth.”

Link to MarketWatch article: MarketWatch article

Lance Roberts is a seasoned financial strategist and economist with over 30 years of experience in investment management, private banking, and venture capital. He currently serves as Chief Investment Strategist and Chief Economist at RIA Advisors, where he leads market research and portfolio strategy. Roberts is also the editor of the widely followed Real Investment Report and host of The Real Investment Show, offering daily and weekly commentary on macroeconomic trends, financial markets, and investment strategy.

 Known for his precise, and pragmatic analysis, Roberts provides practical investment guidance using a variety of methods and tools. Through his writing, broadcasts, and public speaking, Roberts has built a reputation as a respected voice for both individual and institutional investors seeking clarity amid market volatility. 

MarketWatch: What are the most significant risks or red flags you see in the current market environment?

Roberts: The market is bullish, but I’m concerned we’re getting set up for another pullback sometime this year. Many institutions are still underweight equities and are not chasing the rally at this moment. In terms of sentiment, they are not back at the very bullish levels of exuberance. Retail investors, however, are taking on an enormous level of speculative risk with call option volumes at record levels and inflows into leveraged ETF accelerating. There’s a bit of speculative exuberance. The market is currently approaching a point where an unexpected event, such as Powell’s resignation, could prompt the market to reassess forward earnings and lead to a correction in valuation. 

MarketWatch: So you are expecting a market correction later this year?

Roberts: I think there's a good setup that the market can rally here for the next month or so on earnings, but August is the deadline on tariffs. If Trump suddenly reimplements 38% tariffs, and if the overbought, extended market deviates from the 200-day moving average, there’s some good technical fuel for a 5% or 6% correction in late August or early September. Based on technical indicators, we should at least retest the 200-day MA at some point. That would be about 5% or 6% lower than our current level. 

MarketWatch: Is there anything happening in the market that keeps you up at night?

Roberts: Everything keeps me up at night, but there are two things worth watching right now. I don't think there are too many risks at the moment, but I believe earnings estimates are way too low going into this quarter. It’s the third and fourth quarter that keeps me up at night because if you take a look at earnings estimates for Q3 and Q4, they rocket to the moon. They are expecting 16% growth in the third quarter. I don't know where they're expecting this 16% economic surge to support that. There’s a big disconnect between economic activity and the markets right now. 

MarketWatch: Are there any stocks you are avoiding right now? 

Roberts: The stocks I'm avoiding right now are the ones primarily subject to tariffs. For instance, I’ve owned Apple (AAPL) for ten years, but I sold it this year because it’s lagging in the AI development race. Apple also has significant exposure and risk to tariffs because of their exposure to China’s development. We sold Apple and took a position in Meta (META) due to its growing revenues. We just swapped the portfolio. Apple is an example of a company that I'm trying to avoid right now. 

MarketWatch: What’s your advice for managing portfolio risk in this kind of market?

Roberts: The first thing not to do is to sell everything because if you move to cash, the market often keeps rallying. Back in March, we were at all-time highs and everyone was super bullish. We’re now back at those levels again. Here is my recommendation: If you owned stocks that have performed exceptionally well, consider taking some profits. That doesn’t mean to sell everything. However, if your normal position is 4% or 5%, trim it back to 3%. Raise some cash. Do you own a weak stock in a strong market? If that’s the case, then sell your laggards. If it’s a strong company that’s not participating right now because it’s out of favor, consider adding to the position. It’s about looking at your portfolio and rebalancing your risk. 

MarketWatch: How should investors think about risk during a bull market?

Roberts: What people don’t realize is they often take on more risk in a bull market than they realize, and that risk shows up when markets decline. Risk is not about how much money you make when the market goes up. It’s how much you lose when the market goes down. Investors need to take an honest assessment of their personality and think: if the markets decline by 10% tomorrow, what would I do? Would you panic and sell everything? If you don’t know that answer, then think about how you felt in April, and you’ll have a better idea of where you are. 

MarketWatch: Why hasn’t the market reacted more negatively to the latest round of tariff news?

Roberts: I tell clients not to worry about the headlines so much. Take a step back and consider how the tariff headlines impact earnings for companies such as Nvidia (NVDA), Microsoft (MSFT), or Apple. If it doesn’t have a major impact on forward earnings, then there’s no need for the market to reassess valuations. So, the market is back to being very exuberant again because they are betting that the tariffs won’t exceed 10% or 12%. 

MarketWatch: Why do you think the Fed, not tariffs, poses a greater risk to the market right now?

Roberts: The market has a handle on the tariffs. Powell has been saying that tariffs will cause inflation. It may cause inflation in some aspects. For example, a computer might cost more because it was manufactured in China, but those aren’t things you buy every day. However, the reason tariffs aren’t causing a significant surge in CPI is that housing accounts for 40% of it, and tariffs do not impact housing. Its services that affect CPI.  In the economy, services account for 80 percent, while manufacturing accounts for 20 percent. The only people paying tariffs are producers of products. Widgets from China sold at Walmart are not a major factor in the CPI. 

MarketWatch: What do you think the Fed is getting wrong about the current economic data?

Roberts: The Fed, as smart as they are, gets trapped into these mental biases, and they allow that to impact their forward thinking. In my opinion, employment’s okay, but it’s slowing down. We are seeing some weakness in employment, not only in the BLS report, which has weakened, but also in the ISM manufacturing report. The employment indexes are also showing a lot of weakness. I think the Fed should have cut at the last meeting, not aggressively, but cut 25 basis points, and see how things are going. 

MarketWatch: What risks does Powell face if he waits too long to cut rates? Shouldn’t he be cutting now?  

Roberts: He’s worried that if he cuts rates, it will cause inflation. If something happens, for example, if Trump takes a particularly aggressive stance on tariffs, it could cause the economy to buckle. And all of a sudden, Powell is having to cut a lot more aggressively, and markets don’t like that. The market is okay with a controlled 25-point basis point, but they don’t like aggressive cuts. If Powell started to cut by 50 basis points, then you know that something broke in the market. 

MarketWatch: How could tensions between Trump and the Fed impact the markets?

Roberts: The two risks in the next two months are that Powell is late in cutting rates, and the battle between him and the White House accelerates. My concern is that if Powell quits or is forced out of office, the markets may not like it. The market relies on the Fed’s independence. 

MarketWatch: What stocks do you see as long-term winners?

Roberts: If you’re investing in AI, I like Palantir Technologies (PLTR), which is extremely overbought right now, so I’d wait for a pullback. You have to own Nvidia, but you must wait for a pullback. It’s very extended. Keep in mind that the companies we'll be talking about ten years from now won't be these guys, just like it was during the .com boom.

LINK TO PUBLISHED ARTICLE: Link to Article

Introduction

David Booth is a visionary investor and the co-founder of Dimensional Fund Advisors (DFA), a firm he launched in 1981 to bring academic finance into real-world investing. Educated under Nobel laureate Eugene Fama at the University of Chicago, Booth became a pioneer of evidence-based, systematic investing, helping to popularize passive strategies.  

Over the 20 years ending September 2024, 84% of DFA’s U.S. funds outperformed their benchmarks, compared to just 17% of typical active funds. Recent performance includes returns of 15.98% over 1 year, 9.09% annualized over 3 years, 15.87% over 5 years, and 7.54% over 10 years. 

Booth is also the central figure in the new documentary, Tune Out the Noise, directed by Oscar-winner Errol Morris. The film explores how academic research at the University of Chicago transformed financial markets, focusing on DFA’s founding and evolution.

Featuring Nobel laureates such as Fama, Myron Scholes, and Robert C. Merton, the film focuses on the power of data-driven investing, risk management, and behavioral discipline. The film tells the story of Booth’s impact and shows how research and science still play a big role in how he invests today.

In this recent interview, which has been edited for length and clarity, Booth discusses his investing philosophy, how his firm seeks to outperform market indexes, and what most investors misunderstand about the stock market.

MarketWatch: In the documentary, Tune Out the Noise, you describe your work as a pursuit of truth. What did you mean by that? 

Booth: A lot of things that people assumed was a virtue didn’t turn out to be true. The basic one is that anybody can beat the market if they just pay attention and work hard. That turned out not to be true. The pursuit of truth involves a lot of research which gives you insights from the past that hopefully are helpful going forward. People want the absolute truth but I’m afraid that’s just not available when talking about investments. We do our best analysis on the way markets work, and in our view, we tell you the best way to go forward. However, reasonable people can have different opinions. 

MarketWatch: What’s the biggest myth investors believe about who really wins in the market? 

Booth: Most people think of themselves as outsiders, while the insiders make all the money. That’s just not the case. The evidence is that professional money managers don’t do any better than the market. That should be a revelation to people. In every phase of life, if you work harder and smarter, you’ll probably do better than the guy down the street, but that’s not true when it comes to picking stocks. Because the market knows more than you, it can be very costly to try to bet against it. Once you accept that the market is your friend, life gets a lot easier. There is less second guessing. 

MarketWatch: Do you have a forecast for the current market environment?

Booth: Many people are comfortable making a forecast but there’s not much evidence that people can forecast or predict market returns. Too often, people feel like every year they have to make a change. This year is a good example of why just calming down and staying the course is frequently the best solution. We had a lot of volatility, lots of ups and downs. A lot of people got whipsawed trying to time the market. 

MarketWatch: Do you ever make changes to your strategy based on what the market is doing? 

Booth: We are constantly revising our long-term research to see if the evidence we had before is holding. Maybe we learned something different that we need to include in our long-term strategy. Occasionally, we change our long-term allocations, but we never make changes over the short term. 

MarketWatch: In a market full of uncertainty, what gives you confidence that staying invested for the long term still works?

Booth: Some people call me an optimist. What has bailed us out over the long haul is basic human ingenuity. It’s always worked in the past and I don’t see any reason why it won’t bail us out in the future. What I mean is that people want to make their lives better and the lives of their family better. If something bad happens to them, they don’t sit there and take it. They try to get back on track. That’s what leads to all this ingenuity and progress. It’s frequently three steps forward and two steps backward, but I don’t see a reason why it should not be anything other than optimistic over the long term. 

MarketWatch: How does that principle shape the way Dimensional approaches markets differently than traditional active managers?

Booth: We start with the evidence. Is there really any compelling evidence that you should try to time short term moves in the market? If you look at professional money managers, there’s no compelling evidence they can time short term moves. And yet, individuals think they can go out and time short term moves in the market rather than our approach, which is to take advantage of how markets work. 

MarketWatch: You don’t try to outguess the market, but you also aren’t a traditional indexer. How do you define your approach? 

Booth: Our view is that indexing is a rather mechanical and inflexible approach to investing that leaves money on the table. We’ve developed ways of beating index funds. We try not to outguess the market but work with market mechanisms that can add value to indexing. But it’s close to indexing. 

MarketWatch: How does your fund add value beyond traditional index funds?

Booth: We built our firm on the efficient market hypothesis of Gene Fama, a Nobel Laureate who is one of our founders and directors. It doesn’t make sense to try and outguess the market, but as a professional money manager, there are some things we can do to add value over indexing. For example, while many indexes rebalance as infrequently as once or twice a year, staying flexible allows us to buy and sell securities every day based on up-to-date information on what can improve returns. That flexibility has been a key source of value, because it allows us to seek better prices than index funds may get and helps us avoid holding stocks with lower expected returns. 

MarketWatch: What’s the most sensible way for long-term investors to participate? 

Booth: In the US stock market, thousands if not millions of investors are entering the market every day. There are huge trading volumes. On both sides of the trade are very sophisticated investors with differences of opinion. I’d rather rely on the overall wisdom of crowds, on the collective judgement about pricing, and not try to guess the market. When I go home at night, I’d rather spend more time playing with the kids than trying to figure out what’s going to happen with the market the next day. 

MarketWatch: Do you see a reason why individuals should choose individual stocks? 

Booth: I haven’t come up with one yet and I’ve been doing this for almost 56 years. It’s silly because the market does a good job of setting prices. Why get in the middle of that when there’s no evidence that you know more than the pros. I know that for some people, picking stocks is fun. If you get a kick out of it, then pick a few names as long as you don’t bet the ranch on it and hurt yourself too badly. I don’t view that as serious investing. That’s entertainment. Many people are attracted to what we think of as the noise. I don’t understand how a casual investor can think they can take advantage of pricing mistakes. Why do they think they can do that? 

MarketWatch: What’s the single most important takeaway you’d want long-term investors to remember from your experience?

Booth: Our mission is to try to help people understand the market and how it works. If you understand how it works, you’ll be more likely to invest. Over the long haul, it’s really important for people to start investing early. The power of compounding means that a 10% return on your investment each year—similar to the stock market’s historical annualized average—would double your money every seven years. Find an investment approach you can stick with rather than trying to time all of the short term moves in the market.

MarketWatch: What was your relationship with John Bogle like in the early days?

Booth: John was a hero. He helped us get started. When we started our firm, Vanguard did all of our back office and administrative activities for us such as reconciling trades and making sure dividends and interest payments were collected. Running a mutual fund company is very complex. Eventually, we started doing it on our own. I went to work at Wells Fargo and they were one of the pioneers of indexing as well. We all talked to each other and tried to get these ideas out. This is what I mean by the pursuit of truth. 

MarketWatch: In the movie, Tune Out the Noise, you said you learned a lot from selling shoes. What lessons did you learn? 

Booth: I put myself through school selling shoes, and it was a commission-based system. There was a huge incentive to try and make a sale. I realized when I went home at night, I wanted to feel good about myself. I wouldn’t feel good about myself if I tried to sell a pair of shoes that didn’t fit or was the wrong color. That’s the basis of our firm. 

Michael Sincere is the author of “Understanding Stocks,” “Understanding Options” and “Help Your Child Build Wealth.”

LINK TO PUBLISHED ARTICLE: Link to Article

Introduction

Mark Minervini is one of America’s most accomplished stock traders, known for his disciplined approach, consistently high returns, and proprietary Specific Entry Point Analysis (SEPA) methodology. With over 40 years of market experience, he’s advised hedge funds, won the U.S. Investing Championship with 155% returns in 1997 and a record 334.8% in 2021. He was also featured in Jack Schwager’s Stock Market Wizards. Through his books and mentorship programs, Minervini continues to train traders worldwide.

In this recent interview—edited for length and clarity—Minervini shares his insights on risk management, discipline, how he has generated consistent profits over decades, his outlook on the current U.S. stock market, and some of the stocks he’s currently buying.

MarketWatch: What do you think of the economy?   

Minervini: Right now, we’re in an optimal economic growth period that is good for a sustained bull market. It’s a Goldilocks economy. You have 2% to 3% real GDP growth, which is a really good environment for a sustained bull market — it’s not strong enough to have inflation, and we’re not tipping into a recession. On May 8, our firm put out a buy signal for the S&P 500. That’s when we went 100% into the S&P 500. 

MarketWatch: With the recent U.S. strikes on Iran on June 21, have you made any adjustments to your short-term trading strategy?

Minervini: The strikes on Iran may create short-term volatility in oil and equities, but history shows markets often rebound within 6 to 12 months. While oil prices above $80 could weigh on sentiment, with the S&P 500 still in a confirmed uptrend and our May 8 buy signal intact, I view any pullbacks as buying opportunities. Expect near-term volatility—but don’t lose sight of the broader trend. Our bottom-up approach remains driven by individual stock behavior, not headlines. 

MarketWatch: What else could put pressure on the market?  

Minervini: We have a lot of uncertainty right now with the tariffs, oil, and Iran. Oil just had one of its biggest rallies. If oil goes above $80 per barrel, that may be a tipping point that could put pressure on the market. Every $5 or $10 that oil rises above $80 could add to a recessionary scenario. Right now, we’re bullish on the major indexes like the S&P 500, but cautious with regard to individual stocks—particularly small and mid-caps. 

MarketWatch: Why are you taking a cautious approach with individual stocks? 

Minervini: Right now, participation is weak because money managers are not willing to go too far out on the risk curve, so they are gravitating towards the big heavy-weighted stocks in the index. For example, right now only about 40% of the S&P 500’s market capitalization is concentrated in just its top 10 stocks today, a level not seen in decades. For the Nasdaq Composite, the top five companies—and six if you count Alphabet’s dual share classes—make up over 40% of its total weight. 

 This is not a broad-based bull market. Money is narrowly concentrated. That’s why you see indexes such as the S&P 500 moving up to new highs but the percentage of stocks that are above their 200-day moving average is still very low. It’s a bifurcated market. If you’re in the bigger cap names in the indexes, you could make some money. 

MarketWatch: Can you name any stocks that you like? 

Minervini: We put a buy signal on Netflix (NFLX) in April because - at the time - it was the best name of the Magnificent Seven stocks, but it’s run up a bit now. 

MarketWatch: In 1997, you were a two-time investing champion, and at one point, averaged a 220% per year return over five years. What do you think has been the key to delivering those kinds of results?

Minervini: The real secret is risk management and discipline. Discipline is the key—committing fully to a strategy, mastering its details, and understanding both its strengths and limitations through every market cycle. You see a lot of traders who are up big, but they fail to respect risk, and suddenly they’re down big, digging out of a hole and only getting back to even. I very rarely dig out of a hole, and if I’m in a hole, it’s a small loss. It’s a simple law of compounding that if you don’t lose big, winning becomes easier. 

MarketWatch: You often emphasize the importance of risk management and discipline—areas where many traders continue to struggle. What specific methods or practices do you recommend for managing risk effectively?

Minervini: When you enter a trade, there really is no other alternative to manage risk except selling a position for a small loss before it becomes a large loss. The key is to get out at single digits, and to do that, you must use a stop-loss. Some people will hedge and maybe use put options—but that just adds risk—because you could lose on both sides. 

MarketWatch: So, in your view, managing risk and maintaining discipline is the real secret to trading success?

Minervini: I’d love to tell you something new, but things really haven’t changed a whole lot when it comes to risk-reward and supply-and-demand. It may be redundant and boring, but if you want the hair on your neck to stick up, then you’re not managing risk. You’re gambling. When I was interviewed by Jack Schwager for his Market Wizards book, after I gave him the same answer, he stopped the tape recorder and said, “Mark, this is great, but this is what all the Market Wizards say.” And I replied, “Well, Jack, this is the reason why they’re Market Wizards!”

MarketWatch: Even with all that in mind, a lot of traders still have trouble making steady profits. What are they missing?

Minervini: Many people spend all their time researching a company and falling in love with products and services such as artificial intelligence (AI). Then they buy the stock, and the next day, the stock is down 3%, 4%, 5%, or 8%. They are forced to decide whether to cut their loss. ‘Oh my God, so soon? I thought this stock was going to go up!’ They didn’t plan for the stock to go down. When you buy a stock and the stock goes down, you’re wrong. If you sell it and take the loss, you’ve admitted defeat. The real fear, and this is what keeps people from selling, is that you’re going to sell it and it’s going to turn around and go back up. Then you will be wrong a second time. Psychologically, being wrong twice is a very powerful force, and it makes us hold onto a position, even when it’s clear it should be sold. 

MarketWatch: What advice would you give traders right now? 

Minervini: I would tell them to be careful because of information overload—including thousands of self-proclaimed financial experts on YouTube. You have to figure out a way to reduce the noise and commit to a particular strategy. You must become a specialist rather than a jack of all trades. 

MarketWatch: Did you make any mistakes when you first started trading?   

Minervini: I made every mistake you could possibly make. Everything I did then was the complete opposite of what I do now. I lost money for almost six years. I reversed all the criteria. I studied what winning stocks looked like and created a “leadership profile,” which is what I use now. It’s a technical profile ranking that compares whether a stock meets the criteria of the biggest winning stocks of the last 100 years. We look at the common denominators to see if your stock has what it takes to be a big winner. That’s what has worked for me for the last 38 years. 

MarketWatch: It sounds as if you are a trend follower. 

Minervini: I am definitely aligning my investments with the trend. The main thing is a stock has to be in an uptrend. I will not trade against a trend. Then I look for stocks that are showing relative strength vs the entire market. We also look for a technical chart pattern called the Volatility Contraction Pattern (VCP), which is my signature stock setup. If a stock doesn’t meet my criteria, I stay away from it. Many people buy a stock because of a news story or because their friend gave them a tip, but that’s not sustainable; that’s not a strategy. 

MarketWatch: Is the market different since you were interviewed for Market Wizards? 

Minervini: Nothing is different except things are faster and more accessible, which makes trading easier than ever. 

MarketWatch: Some traders blame their losses on the algorithms. 

Minervini: Those are just excuses. If you go back to the ‘40s and ‘50s, traders blamed their losses on big institutions. During the 1987 market crash, they blamed it on program trading and computers, which were basically algorithms. In the 90’s, it was the SOES Bandits, or traders who exploited Nasdaq’s Small Order Execution System (SOES) to execute high-frequency trades. There’s always some boogeyman in the closet. The algos aren’t causing the problems. The main problem is poor tactics and poor discipline. You have to not only have rules and tactics but have the discipline to follow them. 

MarketWatch: How long do you hold a stock? 

Minervini: The main thing is risk and reward. As long as the potential reward is larger than the risk, I’ll hold the stock. If my stock turns profitable, I start protecting my profits, but I’ll hold it as long as it’s behaving. I don’t hold for the really big moves like I used to when I first started trading. Now, I’m more of a swing trader. 

 MarketWatch: How do you know when a stock is too high? 

Minervini: Sometimes, a new high is actually low. For example, I bought Amazon off its IPO base back in 1997. It made an all-time high coming out of its IPO. If you look back now, that was pretty low. I also bought Yahoo! in 1997 when it was trading at 908 times earnings. Then it went up 8,000%. Looking back, the stock was actually quite low. 

MarketWatch: Is the market different since you were interviewed for Market Wizards? 

Minervini: Nothing is different except things are faster and more accessible, which makes trading easier than ever. 

MarketWatch: Some traders blame their losses on the algorithms. 

Minervini: Those are just excuses. If you go back to the ‘40s and ‘50s, traders blamed their losses on big institutions. During the 1987 market crash, they blamed it on program trading and computers, which were basically algorithms. In the 90’s, it was the SOES Bandits, or traders who exploited Nasdaq’s Small Order Execution System (SOES) to execute high-frequency trades. There’s always some boogeyman in the closet. The algos aren’t causing the problems. The main problem is poor tactics and poor discipline. You have to not only have rules and tactics but have the discipline to follow them. 

MarketWatch: How long do you hold a stock? 

Minervini: The main thing is risk and reward. As long as the potential reward is larger than the risk, I’ll hold the stock. If my stock turns profitable, I start protecting my profits, but I’ll hold it as long as it’s behaving. I don’t hold for the really big moves like I used to when I first started trading. Now, I’m more of a swing trader. 

MarketWatch: How do you know when a stock is too high? 

Minervini: Sometimes, a new high is actually low. For example, I bought Amazon off its IPO base back in 1997. It made an all-time high coming out of its IPO. If you look back now, that was pretty low. I also bought Yahoo! in 1997 when it was trading at 908 times earnings. Then it went up 8,000%. Looking back, the stock was actually quite low. 

MarketWatch: What advice did you receive when you were growing up?  

Minervini: The best advice I received was to live as modestly as you can and save as much as you possibly can early on. Don’t be quick to spend money because that money makes money. Refrain from making those really big purchases until you can afford them. Learn how to compound money, not mistakes. 

MarketWatch: Any final advice? 

Minervini: If you’re new to investing or trading, don’t believe those who say it was easier back in the day. Trading is easier now than ever. This is one of the best times in history for trading and investing in stocks. Be patient with yourself, and don’t give up. Realize you can’t be a doctor or Major League baseball player in six months or a year.  Don’t expect that to happen with trading, either. You will have to put in some time, but it’s worth it because we’re in the best times for investing. 

LINK to MarketWatch article: MarketWatch article

Warren Buffett, the voice of reason in the stock market, recently announced that he was retiring at the end of 2025. “He was like the Rock of Gibraltar,” says Jeff Bierman, chief market technician at Theo Trade and an adjunct professor of finance at Loyola University Chicago. “Losing him concerns me. It marks the end of an era of old school fundamentals that used to drive the markets until the early nineties. It’s a sad chapter that is closing, but at the same time, it opens up a Pandora’s box for much more volatility going forward.” 

The Pandora box, according to Bierman, is a “mercurial president where on any given day, there can be a tweet, a social media post, or a television appearance where one word from him drives order flow. Each morning, I wake up and wonder what he’s going to do to torch my portfolio or lift it up.”

Bierman says he worries about the unpredictability of President Trump. “To me, that is the perfect storm of a market that will remain volatile for at least the rest of the year. Trump is like the sun and everything revolves around him. Because of that, both professional and retail investors alike are constantly on pins and needles.” 

In this recent interview, which has been edited for length and clarity, Bierman discussed his views about the market, including stocks he is buying and what he’s avoiding.

MarketWatch: In our last interview, you warned about a volatile stock market. Have you ever seen a stock market as volatile as this?

Bierman: Not where one individual has such an impact on the market and not where so many asset classes are offered. I’ve seen volatile markets, but I haven’t seen a market quite like this where one single individual has the power to drive order flow.

MarketWatch: What should traders and investors do when the market is so unpredictable? 

Bierman: Trade small. Don’t be fully invested at all times in one single product. Also, the indexes are likely to underperform for the next few years. For the last hundred years, the indexes have delivered an 8 percent return. Prior to this year, three out of four years, the S&P 500 was up 20%. The likelihood of that repeating itself is nearly impossible statistically. So, investors need to recalibrate their expectations. If you can get a 5% to 6% return over the next three to four years, you’ve done very well.

MarketWatch: Do you have any other advice for traders and investors? 

Bierman: Cut down your position size. If you’ve been holding concentrated positions of 10%, you want to cut those in half. Also, consider international markets, or moving your money into precious metals such as gold and silver. You could consider moving your money into commodities that have been beaten down --- such as oil. Oil will eventually find its bottom,w which should provide good cash flow and dividends. 

MarketWatch: In our last interview several months ago, you said if we take out 5,600 on the S&P 500, we would go to 5,200. We are now a little above 5,800. What do you say now? 

Bierman: We did take out 5,600 and went down to 4,800. Now, we have circled back to 5,800. Let me put it in perspective: The all-time high on the S&P 500 is 6,147. Then we went down to 4,800, which is a decline of approximately 21%. We have retraced a little more than 61.8% of that, which is a normal Fibonacci retracement sequence. Nobody knows what will happen next. 

MarketWatch: Although you don’t make predictions, what are the possible scenarios? 

Bierman: I think the momentum is behind the market, although it is overextended. We could push higher, but to push back to all-time highs, you’re going to need tailwinds. We will need the Fed to cut rates, which they might do in the early part of summer. We also need for inflation to come down. We also need to get more clarity on the financial impact of tariffs, and tailwinds from technology and financials. The good news is we have tailwinds from financials, but they are now near fully priced. 

MarketWatch: What if the S&P doesn’t make it past 5,900? What could happen? 

Bierman: If we don’t push past 5,900, the S&P 500 could fall to 5,200. To make it past 5,900, you need a lot of liquidity, which you don’t have. You need a lot of tailwinds, which you don’t have. And you will need the president to be less volatile and back off his aggressive tariff agenda.  I’m telling you we are at a critical juncture where the market could retest the high.  Nevertheless, it would not surprise me to see the S&P 500 retest the intermediate low between 5,200 and 4,800. That is a real possibility. 

MarketWatch: Are there any particular stocks that you think are worth buying?   

Bierman: I happen to like financial stocks such as JPMorgan (JPM), Goldman Sachs (GS), Visa (V), Mastercard (MA), and PayPal (PYPL). They are all good places to park your money. I like financials with steady cash flow, decent dividends and relatively below average multiples. The financials should not be as impacted by the tariffs compared to other sectors. I also like pharmaceutical stocks such as Bristol Myers Squibb (BMY). They delivered much better-than-expected earnings and the valuation is compelling. I also like Merck, which had great earnings. I also like Baxter International (BAX) even though the dividend is not as compelling but has decent upside. 

MarketWatch: Are there any stocks you don’t like and would avoid? 

Bierman: I think Walmart is in a bubble and Costco is ridiculously expensive, but I think there’s compelling value in Target (TGT), BJ Wholesale (BJ), and TJ Maxx (TJX). I also think much of the AI trade has been played out. I think you need exposure to AI but not to be overweight. Many high-profile companies are cutting back on their spending budgets and resorting to layoffs as a result of the uncertainty around the economy, and that could trickle into AI. 

MarketWatch: In our last interview, you said you were buying semiconductors. Are you still buying those? 

Bierman: No, I’m holding off on most semiconductors at this point, but I do see compelling value in On Semiconductor (ON), Western Digital (WDC), and Storage Technology (STX), and Dell Computer (DELL). 

MarketWatch: Are there other investments you are recommending? 

Bierman: You need some exposure to fixed income, whether it’s an annuity or a short-term bond. I don’t like long-term bonds due to their elevated exposure to interest rate risk and lack of liquidity premium. I’d suggest short-term bonds or bond mutual funds. For stock market investors I would tilt more towards large cap stocks away from small cap stocks because small caps tend to lead to the downside in an economic slowdown. I’ve been moving more towards dividend intensive stocks for protection. 

 MarketWatch: Is there anything about the stock market that people don’t know? 

Bierman: Liquidity in this market is about as thin as it has been in many years. Insiders are not buying with conviction. If insiders are not buying with conviction, it is not a vote of confidence for the market going forward. Most fund managers are buying rather selectively. Right now, 20 to 30 stocks are carrying the market higher while the other 470 stocks are underweight or just left behind. It gives an image that the market is healthy when it’s really not on solid footing. Because of the relative scarcity of liquidity, I would not rule out a 2009-style flash crash either.

I interviewed stock-market veteran Louis Navellier, who remains bullish about the stock market.

LINK TO ORIGINAL ARTICLE: MarketWatch article

Stock-market veteran Louis Navellier, the chairman and founder of investment firm Navellier & Associates, is well-known for spotting high-potential stocks through a combination of data-driven, quantitative analysis and hands-on fundamental company research.

Navellier, an occasional MarketWatch contributor, publishes several investment newsletters focused on growth stocks and is the author, most recently, “The Sacred Truths of Investing: Finding Growth Stocks that Will Make You Rich.”

Turbulent financial markets and the steep decline of the “Magnificent Seven” big-tech growth stocks and other former investor favorites make this a good time to catch up with Navellier for his perspective on what has happened to the stock market and what he sees coming.

In this recent interview, which has been edited for length and clarity, Navellier discussed stocks, bonds, the economy and tariffs. He also called out some of the stocks that have passed his firm’s strict test of relative strength. (Navellier commented before the market’s rally this week on better-than-expected tariff news.)

MarketWatch: The stock market now seems to be more reactive to politics than the business fundamentals you focus on. But it’s quarterly earnings season now. Against that backdrop, what’s your outlook for stocks?

Navellier: It’s imperative that earnings resume working. That’s why our firm focuses on earnings and not the ongoing tariff drama. I know we’re going to have double-digit earnings growth this year. There will also be falling rates. We have a pro-business president, but he’s an acquired taste. Not everyone is used to him and he did overreach, for lack of a better word.

MarketWatch: What is keeping you upbeat about stocks right now?

Navellier: Wall Street strategists are lowering their targets, but I ignore those people. I care about the analysts doing the actual earnings estimates for all my portfolio companies. At the end of each quarterly earnings season, I retest my quant systems. Here are a couple of observations: First, the companies we chose have to be in the top 45% of fundamentals. Then, when we do our quant-model overlay, we want the company to be in the top 5%.

MarketWatch: Let’s talk about those companies. What are some favorite stocks that have passed your test?

Navellier: Our largest holding is Nvidia Corp. Our second-largest holding is Eli Lilly & Co. We’re very bullish on Lilly, although they’ve struggled because there were rumors of U.S. tariffs on the pharmaceuticals. We also have a lot of Costco Wholesale Corp. shares. We view Costco as a luxury retailer. Go to their parking lot and see who is loading up. Another major holding of ours is Super Micro Computer Inc. We’ve been in it for years and rode it through all the ups and downs. They make the best server systems for Nvidia.

MarketWatch: To be bullish on U.S. growth stocks is to be bullish on America. But the recent decline in both the U.S. dollar and Treasurys suggests that many investors are looking elsewhere in the world. What would you tell them?

Navellier: I’m very bullish on America. We have a better model — no matter who we elect. We’re food and energy independent. The world economy is shrinking. Only America, Brazil and India are growing, and Brazil’s about to stop growing.

The dollar’s down this year, and people are net sellers of Treasurys. There is a lot of concern about America and its deficits and leadership. I’m not trying to pick on President [Donald] Trump, but he clearly doesn’t sell well everywhere. The bond market has temporarily calmed down, but the jury is still out. The bond-busters may sell further. When the dust settles, the dollar will come back. Hopefully, the dollar’s appreciation will offset those 10% tariffs.

MarketWatch: There’s been no “Fed put” to support the stock market so far. Are you expecting the Federal Reserve to cut interest rates this year?

Navellier: The Bank of England and the European Central Bank are both going to cut rates, and U.S. rates are going to come down once bond investors calm down. I’m still expecting up to four Fed rate cuts, and then we’ll get this turbo boost.

Overall, I expect a global interest-rate collapse — a real collapse. There’s deflation in China — they just dumped a whole bunch of goods on us. Meanwhile, oil prices are at a four-year low.

MarketWatch: The Trump administration’s on-again, off-again trade tariffs have whipsawed investors. Where do you see U.S. trade policy ultimately taking the economy?

Navellier: The U.S. has a big underground economy, so you either have to do a VAT (value-added tax) or a tariff. The U.S. government is going to raise money to pay down the federal budget deficit. I think we will have freer trade when it’s all said and done.

MarketWatch: Do you see a recession in the U.S. before that happens?

Navellier: No. The U.S. economy may have a negative first quarter because of the trade imbalances, but I think we get our mojo back in this current second quarter. There is no doubt that business planning was hurt by the uncertainty surrounding what Trump is doing. Hopefully, all will be forgiven and we’ll get back to normal. Even if you’re a Trump supporter, you were probably slightly annoyed for a while.

MarketWatch: Any advice for how investors can get a better read on the markets, with so much uncertainty around?

Navellier: The best tip sheet is Truth Social — Trump’s social media platform.

MarketWatch: Anything else, or is that enough for now?

Navellier: I would recommend that people own monopolistic stocks that dominate their business. I like margin expansion (i.e., an increase in a company’s profit margins). I like it when a company’s earnings grow faster than sales. I also like earnings surprises and guidance. Don’t get distracted by all of the noise. Markets are liquid, especially when earnings come out. The other times it’s a bunch of games and shenanigans. The main message is to buy and hold, and also to buy monopolies. My 1,000% winners were all monopolies.

I interviewed social media star Steve Burns for my latest MarketWatch column. As you will find out, he is short-term bearish but long-term bullish. Read the article below to find out what he wants to buy when the selloff ends.

Link to original article: MarketWatch article

One truth of stock investing is that it’s better to be early than broke. 

Veteran stock trader Steve Burns learned this lesson the hard way. Burns is a popular figure on social media, where he addresses experienced and novice traders alike to help them steer clear of the stock market’s cliffs. 

In a MarketWatch interview last December, Burns declared that U.S. stocks were in the “greatest bubble in the history of civilization.” He predicted that the U.S. market would soon suffer a correction — and he’s been spot-on so far. 

With the Trump administration’s trade tariffs tanking stock markets in the U.S. and worldwide, Burns said he’s moved his portfolio completely to cash, at least for the time being. In this interview, which was conducted last week as the global market selloff accelerated, Burns said he’s been surprised by the speed and ferociousness of the market’s slide, and speculates about how Trump’s tariffs could impact stocks this year. (This interview has been edited for length and clarity.)

MarketWatch: Four months ago, you were bearish about the U.S. stock market. With the market selling off, do you think we’re close to a bottom? 

Burns: In the short-term, I am very bearish. This is a historical crash and a 50% correction is probable over the next nine months to a year.

But I’m long-term bullish. At some point, this is going to work out, but right now the market is trying to reprice every company on an individual basis based on their risk exposure to tariffs. Oil is signaling a huge recession even though OPEC (Organization of the Petroleum Exporting Countries) reduced its crude oil production. 

MW: How has this tariff-induced selloff affected your portfolio?

Burns: On April 3, I moved to cash. I dipped into small-caps that morning but got stopped out. I went to cash because this looks like a macro tariff-tantrum crash that has very little to do with technical analysis. Everything looked great from a technical standpoint before the tariffs, but now the technicals are broken. Everything relies on how quickly the Trump administration can come to trade agreements, especially with China. If not, there could be a depression, especially in other countries. 

MW: Besides tariffs, what else is a catalyst for this selloff? You said technical indicators had been strong. 

Burns: The AI bubble popped with DeepSeek (a Chinese AI app founded in 2023 that competes with ChatGPT). I don’t know if we’ll get back to the highs in the AI-sector stocks, but I think that Nvidia is still a good long-term play because they are the supplier of the chips. Alphabet, Meta Platforms, Amazon.com, and Apple all got popped when people realized the pricing was not equivalent to the value of their business models. 

MW: Let’s talk about the U.S. economy. There’s concern that the U.S. will experience a bout of stagflation — slower growth and higher inflation. The housing market is frozen as buyers balk at high mortgage rates. Trump has been trying to get the U.S. Federal Reserve to bring down interest rates. What will it take to lower prices? 

Burns: To lower inflation and bring mortgage yields down, the stock market would have to crash. It looks like the Trump administration is trying to cause a bear market in equities so they can get more people to buy bonds and drive mortgage yields down. It seems like their top goal is getting inflation down and they will do whatever it takes to do that.

MW: The stock market is clearly showing it disapproves. 

Burns: They don’t care. It’s almost like they want to cause the stock market to go down and cause bond yields to go up, which will force the U.S. Federal Reserve to cut interest rates because the economy is so bad. I’m speculating, but I think Trump would rather have the stock market crash now so he can go into the 2026 midterm elections with the stock market at all-time highs. 

MW: What will it take for the Trump administration to succeed? 

Burns: That pathway will be very hard with the political pressures, especially if the U.S. goes into a deeper recession and doesn’t come out by the midterms. Trump could buckle if the economy is in a shambles by the midterms. He has a year and nine months to rebuild a long-term supply chain. 

MW: What would cause you to move out of your cash position? 

Burns: I’m looking for an established base built on a bottom. The first indicator I look for is a price above the 200-day moving average. What could stop the selloff is if the U.S. can get a deal with China. We could have a monstrous rally — but China looks like it’s doubling down. 

MW: What would you consider buying once the market recovers?   

Burns: I’d consider Alphabet and Block. Many people aren’t buying Alphabet’s YouTube is overtaking Disney and Hulu combined. YouTube is the No. 1-watched media site now. Alphabet’s stock, however, has been driven down by the government’s push to break it up. Block, which used to be Square, is a great financial play in fintech (financial technology). It’s a future national cash register — a new way of connecting monetary payments. 

MW: What should traders and investors do to reduce risk? 

Burns: It’s not a great time to take huge positions. It’s a good time to test the waters to see how the tariffs will play out over the next few weeks. That means having smaller position sizes. It’s very dangerous to short after the market has already dropped into a correction. 

MW: What would you tell buy-and-hold investors right now? 

Burns: Buy-and-hold now is similar to buying and holding in 2000 or 2007, which I lived through. That got me away from buy-and-hold. If you’re in your 20s and have a 20-year time horizon, buy-and-hold makes sense. But not if you’re older. I can’t imagine putting all my capital into buying and holding right now with the current valuations. The odds are good that there will be a 50% correction once every 15 years. 

Michael Sincere is the author, most recently, of “Help Your Child Build Wealth: A Parent’s Guide to Teaching Children To Be Successful Investors,” and “Mr. Sincere Teaches You How to Sell Covered Calls.”

I wrote the following article about social media star Tori Dunlap and the money tips she has to help women get richer. Here is a link to the original MarketWatch article: MarketWatch Interview

Tori Dunlap founded “Her First 100k” to help women better understand their money and finances — and to guide them through the myriad obstacles they often face in building wealth. Dunlap followed this up with a financial advice book, “Financial Feminist: Overcome the Patriarchy’s Bullsh*t to Master Your Money and Build a Life You Love,” and currently offers money-management tips on her “Financial Feminist” podcast. 

 Dunlap’s popularity — she has millions of followers on social media — has helped her achieve financial independence. Dunlap wants other women to follow her example. “I’m passionate about women making sure they not only have their own money, but have control over those funds,” she says.

Building your wealth starts by learning everything you can about personal finance, Dunlap says. These five questions to ask yourself are a good place to start:  

•            Are you negotiating your salary effectively? 

•            Are you thinking about starting a business? 

•            Are you getting compensated for your actual worth? 

•            Are you spending money according to your values? 

•            Are you certain your money is well spent on the things that you actually love and need, as opposed to spending mindlessly? 

In this recent interview, which has been edited for length and clarity, Dunlap explains how to build wealth, find investments that protect your portfolio from market volatility and improve your financial security.

MarketWatch: How did you make your first $100,000?  

Dunlap: It was a combination of things. First, it was the ability to graduate with no student debt. I worked three jobs on campus and worked summers. My parents contributed to my college fund. Secondly, I prioritized spending according to things I wanted to do rather than feeling I had to spend money on everything. Third, I had a side hustle, which allowed me to save a portion of my income. I opened up a Roth IRA when I was 22 and maxed my contribution every year. 

MarketWatch: What do you want women to learn about building wealth like you have? 

Dunlap: I want women to know that it’s possible for them to build wealth in a sustainable way. Women are less likely to invest than men, and often start later in life, which causes them to miss out on millions of dollars in compound earnings — but there are resources out there designed specifically for them.     

MarketWatch: What specific advice would you give anyone wanting to build wealth? 

Dunlap: First, I would make sure your savings are automated. Building your emergency fund should be at the top of your list, regardless of how much debt you’re in. Another tip would be to make sure you are fairly compensated for your work. Negotiate for more, or move on. Third, make sure you’re investing as early and consistently as possible. 

MarketWatch: Is it hard to follow this advice? 

Dunlap: Yes, it’s easier said than done! There are many systematic barriers that keep women from building wealth. The trillion-dollar student-debt crisis impacts women more than men. The wage gap and pay gap — women are constantly up against these barriers in addition to just trying to manage their personal finances. 

MarketWatch: What are some common mistakes that women make with their money? 

Dunlap: This may shock a lot of people, but a vast majority of women don’t know that the Roth IRA or the 401(k) is not the investment itself. A lot of women think that they deposit their money into mutual funds, but don’t realize that their investments really go into a cash account. It is a two-step process; make sure you transfer money into your account, and then buy investments with that money. Otherwise, you’re keeping your money in what I jokingly call “financial purgatory!”  

MarketWatch: What stock-market investment approach do you recommend? 

Dunlap: Sustainable long-term investing, rather than trying to pick the next hot stock. Essentially, this means you’re not putting all of your eggs in one basket. You’re making a more diversified, low-risk choice. I personally like index funds for that reason, and own shares of Vanguard Total Stock Market ETF (VTI)

MarketWatch: What are effective ways for an investor to handle stock-market volatility? 

Dunlap: Make sure you have at least a three-month emergency fund in a high-yield savings account. This is just like a normal savings account, but it’s going to earn you way more in interest. Be protected in case of an emergency before you start investing. Second, have a secondary source of income to insure against losing your job or facing a financial emergency. You don’t want to be solely reliant on one source of income. 

MarketWatch: What is one of the most important lessons you have learned about money? 

Dunlap: One of the biggest financial decisions concerns your choice of a partner. Whether it’s marriage or a long-term relationship, that partner is going to directly impact almost every financial choice you make. 

MarketWatch: Why do your podcasts and books resonate with so many people, especially women? 

Dunlap: I think that a lot of personal-finance education was shaming and judgmental. It was focused on how you didn’t make the right choices or that you are not working hard enough. It is refreshing to a lot of women who are outwardly feminist. Her First $100K is a feminist company that talks about money. That idea has connected with our community of 5 million women who feel safe and aren’t judged for their personal finances. We also take something that has felt intimidating — personal finance — and make it easy to understand. 

MarketWatch: What else can women do to improve their financial lives? 

Dunlap: I’m passionate about women making sure they not only have their own money, but have control over those funds. If they need to get out of unsafe situations that they don’t want to be in anymore, they should have access to their own money. And if a relationship should end, they need to learn everything they possibly can about personal finance so that they’re able to stand on their own two feet. 

I always tell women that a financial education is the best form of protest. In a society and system that makes sure women are controllable by constantly franchising them, and keeps them playing small, having money means having options. I’ve seen it with literally millions of women who can leave abusive marriages, take care of their ailing family members, pay off their student loans, save that first thousand dollars and breathe easier because they have their own money. 

Michael Sincere is the author of Help Your Child Build Wealth and Mr. Sincere Teaches You How to Sell Covered Calls. 

The following is a column I wrote for MarketWatch on what veteran trader Jeffrey Bierman thinks about the stock market, and the stocks he likes --- or doesn't like.

Link to MarketWatch article: https://bit.ly/4jq80XV

Jeffrey Bierman, an adjunct professor of finance at Loyola University Chicago and founder of Genisuscog.com, says the market is trying to figure out a lot of conflicting information, including the biggest wild card of all, Donald Trump. 

“Trump is a wild card in terms of his habit of tweeting,” Bierman says. “He’s mercurial.” Every time he comes out and says he’s going to cut taxes, impose tariffs, or invade Greenland, he creates a crosscurrent of uncertainty, which keeps the market guessing. If there is anything the market doesn’t like, it’s uncertainty. They like clarity and steadiness. You are not going to get that from him. This will be the year of volatility. It will be the new norm.” 

MarketWatch recently spoke with Bierman to discuss his contrarian views about the market, including the names of stocks he is buying and the ones he’s avoiding. This interview has been edited for length and clarity. 

MarketWatch: What do you think of the market right now? 

Bierman: It’s a trader’s market, not an investor’s market. The market is going to move in fits and starts for an extended period. You’re going to have a lot of false breakdowns and false breakouts. The key support level on the S&P 500 is around 5,800 (editor note: which was hit the day after the interview). The next line of defense is 5,600. If we take that out, we’ll mostly trade down to 5,200. 

MarketWatch: Do you expect a crash?  

Bierman: The odds of a crash are not high, but the odds of a garden variety 10% correction is fait accompli (i.e., inevitable). It’s likely and it’s healthy. The momentum to the upside is broken, but the long-term trend is not broken. 

MarketWatch: What preparations are you taking? 

Bierman: I’m lightening up on my exposure to technology. Hardware and software are in a bull market, so I’m scaling back my exposure to them and taking profits. I’m deploying that cash to semiconductors, which are in a bear market. I like stocks that have been beaten down. The semiconductors look awful.

MarketWatch: What specific stocks do you like --- or not like? 

Bierman: I added Applied Materials (AMAT) to my portfolio and also Qualcomm (QCOM) because the valuations are compelling. What I am avoiding like the plague are Intel (INTC) and Advanced Micro (AMD). They are highly overpriced in a highly competitive space. They are not gaining traction.

MarketWatch: Are there any investment themes that you like? 

Bierman: I like nuclear energy and AI healthcare, but not AI computers. The AI momentum trade is not going to work this year. I own Medtronic PLC (MDT) and Intuitive Surgery (ISRG), and they are both doing very well. My long trades are mostly pharmaceutical companies. It’s been the most hated sector for the last four years, which is why I went back in it. I’m also selectively buying consumer staples. 

MarketWatch: What investment themes are you avoiding? 

Bierman: I am avoiding retail such as Costco (COST) and Walmart (WMT), and stocks such as Lululemon (LULU), which is at its 52-week high. If the market corrects 10% and consumers are tapped out on debt, they will dramatically curb their spending. Consumers have used their investment portfolio as if it was an ATM machine. This will affect retail stocks.

MarketWatch: What advice would you give traders? 

Bierman: I would tell them not to be too bullish or bearish in their thinking because their thesis can turn against them. If you’re a trader, manage your risk. Don’t take big positions, and curb your expectations. Trade half the size you usually trade. Also, keep larger than normal cash on hand. Finally, be unemotional. Don’t fall in love with your stocks. There is a point where you have to cut your losers. You have to admit you made a mistake and walk away.  

MarketWatch: Should traders follow the strategies that have worked in the past? 

Bierman: The market may have had a 25% return last year and the year before, but we are not getting a 25% return this year --- although it could be positive. Because of the generalized tweets from the new president and macro data from the Fed, it will a bump and grind, fits and start market with unexpected spikes in volume and volatility at any given time. 

MarketWatch: Are there any indicators that you use? 

Bierman: The number one indicator I use is MACD (Moving Average Convergence Divergence). The second indicator I use is RSI (Relative Strength Index). The third indicator I like to use are channels. 

MarketWatch: What do these indicators tell you?

Bierman: I use these indicators to identify market strength and weakness. Because of algorithms (algos), stocks that are strong continue to be elevated and overbought and the weak continue to be depressed and oversold --- regardless of valuation. Algos buy into strength and sells into weakness. 

MarketWatch: Are algos that powerful? 

Bierman: Most investors aren’t aware that about 95% to 99% of all trades on any given day are done electronically by algos. They’re preprogrammed machines that are buying and selling based upon order flow and slopes (i.e., uptrends and downtrends). They’re completely detached from fundamentals. Don’t underestimate the power of algos. They took this market up and defended it for years. They can take the markets down either slowly or quickly. 

MarketWatch: What happens if the algos start selling? 

Bierman: Right now, we’re in a purgatory of nothingness as the algos keep swing trading. Because key support levels haven’t been violated, the market isn’t moving lower. However, if the market starts to go into a downward spiral and we’re down 20% to 25% in a month, the government might step in and curb the algos by changing the rules of the game. If the algos cause price deterioration and destroy the market, the government will impose regulations on both the upside and downside. Investors should be prepared that gains on the upside will also be curbed. 

MarketWatch: Is there anything else that could collapse this market? 

Bierman: If money managers start to back out of the Magnificent Eight stocks, the eighth being Broadcom (AVGO), then it could unravel the market and create an incredible meltdown. If the trend is broken, there will be forced liquidations by either margin calls or customer redemptions. The Magnificent Eight could also be the reason the market falls by 15% to 20%, and in a short period. This is the year it could happen.

MarketWatch: Is this your prediction? 

Bierman: No. I’m not saying it’s going to happen, but I would not be surprised if it does. It only takes a few seconds to wipe out these stocks. If things start turning down from a slowing economy, it could be the death nail that forces the market lower. There is one thing that I am certain of: We are going to have a 10% correction this year. I don’t know when, maybe April or the summer. The market needs to go through a garden variety correction. A lot of people are calling for a 40% haircut. I’m not. I’m not expecting a massive meltdown but I am expecting a substantial correction. 

MarketWatch: Do you have any hedges? 

Bierman: My hedge is to buy a little gold and silver. I bought Newmont Corporation (NEM) and VanEck Gold Miners ETF (GDX). Everyone should have some exposure to gold. 

Michael Sincere (michaelsincere.com) is the author of “Understanding Options,” “Understanding Stocks,” and his latest,“Help Your Child Build Wealth” (Wiley, 2024).

LINK to article: https://bit.ly/3Bwo4GE

Nearly all parents want their children to be financially successful. Attaining wealth means more freedom, opportunities, and the ability to handle any financial emergency (and without relying on credit cards).

One of the easiest ways to build wealth is by investing in index funds or stocks. Fact: You and your child can beat most of the market professionals who manage money for a living. It’s often been reported that 90% of the pros fail to beat the S&P 500 index each year.

Many Equities.com readers know that the S&P 500 is a closely-followed index that matches the performance of 500 of the largest US corporations. This is the index that most professional managers want to beat, and the index I suggest that you buy for you and your child.

If you are new to the stock market, below are the steps you may take if you want to help your child build wealth. If you follow these steps, although there are no guarantees, there is a good chance your child will be a millionaire well before they reach retirement age.

I’m not just saying that because it sounds good. I’ve run the numbers: a million dollars is attainable. The sooner your child starts investing, the more money they can potentially make.

Note: Go to bankrate.com and search for the investment calculator. Then plug in the data to see how long it will take to make that first million dollars. The results differ depending on your child’s age, how much they contribute, and whether the money is in a tax-free or taxable account.

The good news is it doesn’t take a lot of money to get started. The bad news is it takes a long time to build wealth, so patience and discipline is necessary. Following are the seven steps needed to help your child build wealth.

Seven steps to building wealth

In my book, "Help Your Child Build Wealth" (Wiley, 2024), I identified seven steps to building wealth:

1. The first action that must be taken is opening a stock brokerage account for yourself, and eventually for your child. Opening a brokerage account is similar to opening a checking or savings account. You can open it with as little as one dollar (or use another currency).

2. Once the account is open, invest as much as you can afford into the S&P 500 index fund each month, even if it’s $5 or $10. The S&P 500 index fund is one of the most brilliant financial products created for most investors. Instead of trying to “beat” the market, the goal is to do just as well as the market (i.e., match it) each month.

3. The first goal is to get your child in the habit of investing every month, what is referred to as “paying yourself first.” Investing in an index fund is a much better habit for children than only being a spender. In fact, your children can do both. They can spend money on the things they want or need. They can also invest a few dollars into an index fund each month.

4. The second goal is to invest a set amount of money into the index fund each month, even if it’s a small sum. This excellent strategy is called dollar-cost averaging.

5. The hard part is what comes next. After investing the same amount of money into the S&P 500 index fund each month, your child must not touch the money no matter if the market is moving higher or lower. With dollar cost averaging, if the market is moving lower, your child will buy more shares of the index fund at lower prices. This is similar to buying stuff at a street market when items are on sale.

6. However, if the market is moving higher, your child will buy fewer shares of the S&P 500 index fund. Whether the market is moving higher or lower, the hard part is to keep investing each month. It takes a disciplined investor to keep investing, month-after-month, and not sell.

7. Those who are willing to accept more risk can invest in individual stocks.

The 529 educational savings plan

An excellent program that will help pay for your child’s college is the 529 educational savings plan. “529” refers to Section 529 in the federal tax code. It enables parents to save money for college, and do it tax-free. The 529 plan is offered by brokerage firms as well as every state government (except for one). The invested money that is growing tax-free can be used for any eligible college.

There’s only one catch to this excellent program. The invested money must be used to help pay for tuition or any educational expense such as room and board, and supplies.

How does it work? Briefly, the 529 plan is funded by investing after-tax money into certain financial products such as index funds or mutual funds (but no individual stocks). It’s easy to enroll your child into the plan. Once the account is open, relatives or friends can contribute to the plan on birthdays or other special events. You can also make lump sum deposits.

The money in the 529 account is allowed to grow tax-free until it is withdrawn. As always, the earlier your child enrolls in the plan, the better. The cost is extremely low, especially if opened with a brokerage firm or state government.

Build wealth by paying yourself first

There are several ways to help your child build wealth, and to do it tax free. The earlier they start investing, the more wealth they will have when they are older. They don’t need a lot of money to get started: Even if they start investing $10 or $20 a month, that will help teach your child the importance of saving money by paying themselves first.

Note: To learn more about how to help children build wealth, read Michael Sincere's latest book, "Help Your Child Build Wealth," which can be ordered on Amazon: https://bit.ly/3OGOVmO or Barnes and Noble: https://bit.ly/49x6gGS .