Navigating the Tech Boom with a Long-Term Financial Mindset
Michael G Donkor CFP?
The Financial Tech Planner | I help Tech professionals maximise their income so they can focus on more fulfilling life experiences. Chartered FCSI | CERTIFIED FINANCIAL PLANNER? |
Right, I know the sun is out, so get your sunglasses, umbrella ?? straws, and strawberry daiquiri and check this out.
Your favourite Tech Planner, Mike, is here to highlight a few key moments in April ??.
Wealth Unfiltered 2.0 – Long-Term Mindset and Budgeting.
I recently co-hosted and spoke at an event called Wealth Unfiltered, a 4 part series discussing the raw and uncut version of finance. The series is part of an initiative to help educate young professionals and showcase an up-and-coming app called The Long Term, an all-in-one financial education tool to help professionals transform their finances. We discussed how to cultivate a long-term financial mindset and find a budgeting style that fits your unique personality. Wealth Unfiltered 3.0 is gonna be about……..sorry no spoilers, grab a free ticket ?? and join us for the next one. Sign up for the mailing list to stay updated on Mailerlite.com.
Key takeaways from the event were:
? set realistic goals, stay resilient, and develop an attitude of delayed gratification.
? The importance of a value-based budgeting style can help to attain mastery and control of your spending by paying yourself first
I encourage everyone to kindly subscribe to the The Long Term Ltd page for future editions and insights into improving your financial literacy.
Now that I’ve finished my subtle plug, let’s ditch the stuffy details and chat about the markets! ?? Take a chill and digest these latest trends shaping the tech industry.
US Market Summary
U.S. stocks fell on the final trading day in April 2024, wrapping up a losing month as wage data surpassed expectations, heightening concerns about inflation and policymakers' stance on rates. The major averages in the U.S. declined across the board, with the Dow Jones declining -5%, its worst2 monthly performance since September 2022. The broad S&P 500 lost -4.2%, while the tech-heavy Nasdaq slid -4.4%.
Given the Fed’s stance on its pause to rate hikes, I believe stocks remain attractive, as rate cuts reassure the markets of the apex bank’s support to drive equities and spur business activities in the economy. However, rate cuts in 2024 might be longer than expected as inflation continues to surpass the 2% target.
My projections for asset allocation are neutral for equities overall as switching your investment approach to more optimism in stocks might be based on positive catalysts being realised like earnings growth from the blue-chip firms, ease in geopolitical tensions, and positive revision of earnings.
Young professionals are likely to benefit from a larger allocation of capital into equity resulting from their longer time horizon and increased risk appetite. Hence, with a steady paycheck, the capacity to go big on stocks might yield a higher long-term return. Nonetheless, portfolio diversification is essential even within equities to manage risks efficiently, birthing the need to stay aligned within your risk tolerance level and seeking the counsel of an advisor.
UK Market Summary
The FTSE 100 missed out on another record close in April by less than three points closing at 8,144.13 on the final trading day of the month, as inflationary data across European countries continued to head north with withdrawal in energy support policies and geopolitical concerns lingering.
The need to seek the counsel of a financial planner on suitable asset allocation strategies tailored to your risk profile and appetite is crucial. Despite the impressive run of the FTSE 100, it is important to be conscious of placing more weight on perceived gains versus perceived losses as market sentiment persists. This will also enable you to avoid the loss aversion tendency of holding stocks with negative returns over an extended period.
As an enthusiastic wealth planner, I always emphasise the importance of age to clients when allocating capital to various asset classes. A younger risk-seeking professional could take an aggressive approach with around 80-90% in equities and the rest in fixed-income securities. A portfolio mix of a higher percentage in equities relative to fixed assets aligns with these investors as it provides a long-term spread with future streams of income.
Emerging Market Summary
Hong Kong's equities have recovered since March as Beijing rolled out economic support measures. The Hang Seng Index (HSI) expanded above +7% in April, signalling its best monthly gain since January 2023 and outperforming most major markets. Index giants Meituan, Tencent, and Haidilao rose +21%, +15%, and +13%, respectively in the final week of April.
Emerging market equities are mostly used to ascertain diversification for a balanced portfolio but several factors over the past five years have caused headwinds on EM equities like the strong dollar and the property crisis in China. However, the prospects seem promising for growth drivers as sentiment towards China, the world's second-largest economy has improved on the back of market stabilisation policies, easing U.S.-China tensions, and the declining Japanese market.
Samsung Profit Exceeds Expectations as AI Boom Reverses Chip Losses
Samsung recorded $52.2 billion (71.9 trillion won) in Q1 sales, an increase of 13% year-on-year. Operating profit rose by a mammoth +933% year over year to $4.8 billion (6.6 trillion Korean won), ending a run of declines that started in Q3 2022. The company’s operating profit has witnessed a series of negative returns, reaching a 14-year low in the first quarter of 2023 due to the post-pandemic fall in memory chip prices. Still, a rebound has started as the AI boom increased the demand for advanced High-Bandwith Memory (HBM) chips.
Innovation is likely to propel profitability in the technology sector as firms that invest heavily in research and development to create technological solutions have an increased tendency for higher profits. Technological innovation and advancement also raise the demand for new products, enabling companies within the sector to stay competitive and increase market share.?
The tech sector's resilience has increased forecasts for indexes like the S&P 500, but AI's failure to live up to the hype might halt the party. However, expectations for Q2 2024 and beyond show that the sector is expected to be a core growth driver as the adoption of AI remains pivotal in driving innovation across various domains in this fast-paced world of strategic decision-making where time is often the essence in propelling returns.
Memory Chips Giant Micron Technology Seek US$6 Billion in Grants from U.S. Government
In its bid to rejuvenate the chip-making industry, the U.S. had set aside $39 billion for direct grants under the Chips and Science Act, as well as loans and loan guarantees totalling $75 billion. This deal positions Micron to expand its chip operations pending the finalisation of the preliminary agreement and due diligence process which, if successful, would see the company access the funds in tranches.?
Amid the rise in AI adoption, Micron recorded a quarterly profit in Q1 2024, fuelled by the increasing demand for high-end memory chips and semiconductors. The company’s high bandwidth memory (HBM) chips, essential in developing complex AI applications, were sold out for 2024 and a majority of 2025 supply had already been allocated as announced by its CEO Sanjay Mehrotra. This reinforces my belief that the global race to build powerful computer chips could shape the next generation of AI tools and ultimately change the trajectory of the global technology sector.?
The tech space is my vibe, and I love helping my techy clients navigate this investment jungle!? My mission is to make sure they’re maximising their finances more effectively and diversifying their assets. I do this through my role as a financial advisor with @Belvedere Wealth Management. Make sure you check the website Belvedere.
The tech world's booming, and with AI on the rise, even more money could be entering the market. This is brilliant and scary for the industry’s future!?
My DM is open ????if you want to chat about tech, finances, or anime (Dragonball Z is my thing ??). Remember, wealth isn’t just about having money. It’s about knowing what to do with that money.?
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References
2. Wall Street Journal (2024). Available at:
3. MarketWatch (2024). Available at:
4. Bloomberg (2024). Available at:
5. BBC (2024). Available at:
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Helping CEOs and Founders Scale and Exit in 12-24 months. Is Your Business Next? | Business Strategist | Podcaster | Speaker
9 个月Love a bit of animation Michael G Donkor CFP? great job