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Got a TSB bank account? Here’s why you may want to switch

financialnews1 on December 9, 2021

Image source: Getty Images

If you’ve got a TSB bank account, you may wish to explore your options in the new year. That’s because the bank has announced another round of branch closures. Little over a year ago, customers could choose from 475 branches: that number is going down to 220 in 2022.

Where are the affected branches?

TSB’s latest plans are to close 70 branches in the new year, 18 of which are planned for April, with 26 in May and a further 26 in June.

Which branches close in April?

Aylesbury, Cambridge, Dundee, Elton, Forfar, Forres, Fort William, Kirkintilloch, Lanark, London Bermondsey, London Greenwich, London Harlesden, Rushden, Stranraer, Taunton, Thurso, Wimborne and Yeovil.

Which branches close in May?

Bishop’s Stortford, Bromley, Bury St Edmunds, Camberley, Colchester, Ealing, Eastbourne, Gateshead, Horsham, London West End, Louth, Maidstone, Manchester Denton, Maryport, Morden, Nelson, Newton Aycliffe, Northallerton, Ossett, Redcar, Retford, Romford, St Helens Sutton, Swaffham, Tunbridge Wells and Uxbridge.

Which branches close in June?

Barnsley, Bath, Birmingham Longbridge, Cleveleys, Cirencester, Exeter, Gillingham, Liverpool Garston, Melton Mowbray, Morecambe, Newbury, Norwich, Nottingham Sherwood, Oxford, Redditch, Ross-On-Wye, Sheffield Woodseats, Shrewsbury, Solihull, Southend-on-Sea, Thornbury, Warrington Frodsham, Weston-super-Mare, Wilmslow, Winsford, Worcester.

Why is the bank doing this?

Essentially, the normal reasons cited by banks: restructuring their branch network; customers using digital platforms and alternative ways of accessing services, including cash machines and Post Offices. However, its own figures suggest that it has up to 2.8 million customers who don’t use online or mobile banking.

It’s also announced the expansion of its Mobile Money Confidence Experts services to 50 pop-up locations, up from 40 currently established. There are very limited services you can access, as these are typically based out of local community centres, so while a pop-up might cover some of your needs, it isn’t a fully banking service.

I don’t see my local branch on the list, does that mean it’s safe?

For now these are the only plans announced, but given we’ve seen closures in 2020, 2021 and now 2022 you’d have to be pretty foolish to think TSB were done. It had 588 branches in 2017 after all, and these changes will leave it with 220.

Who are the best alternatives?

That depends how you look at it. The big 3 players in the UK market are Lloyds, Barclays and NatWest. Between them they’ve got 3,131 branches across the UK. So the chances are relatively good they’d have a branch local to you. They aren’t averse to getting the axe out either, as that number is a big reduction compared to the 4,884 branches they collectively had in 2017. Another way of looking at that is Lloyds, Barclays and NatWest have closed the equivalent of three TSBs in as many years. Unfortunately, the trend is that smaller communities are the usual suspects when it comes to closures.

Most major high street banks have undertaken significant branch closure programmes over the last few years. The exception to the rule is Nationwide Building Society, which has gone from 691 branches in 2017 to 646 branches today. So if recent history is anything to go by, Nationwide has the most stable branch network.

Is there another way to look at it?

If you’re not a frequent visitor to a branch but value the customer service they provide, you might want to take the opportunity to broaden your horizons. In the most recent FCA-mandated independent survey, the best banks for overall service quality were Monzo (83%), First Direct (81%), Starling Bank (81%), Metro Bank (74%) and Nationwide (68%).

For context, TSB were rated a lowly 14th in the survey, coming out with a score of 52%.

Of the top 5, only Metro Bank and Nationwide have a branch network. Metro Bank’s 77 branches are predominantly located in the South East and around major population hubs. So if you were thinking about making the switch, it’s worth keeping in mind.   

Looking for more bank switching help? See our article outlining eight questions to ask before opening a current account.

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8 Rules for Saving, Borrowing and Spending Money

financialnews1 on December 9, 2021

This article provides information for educational purposes. NerdWallet does not offer advisory or brokerage services, nor does it recommend specific investments, including stocks, securities or cryptocurrencies.

The best personal finance advice is tailored to your individual situation. That said, a few rules of thumb can cut through the confusion that often surrounds money decisions and help you build a solid financial foundation.

The following guidelines for saving, borrowing, spending and protecting your money are culled from nearly three decades of writing about personal finance.

1. Prioritize saving for retirement

In an ideal world, you’d start saving with your first paycheck and keep going until you’re ready to retire. You also wouldn’t touch that money until retirement. Even if you can’t save 15% of your pre-tax income for retirement, as recommended by Fidelity and other financial services firms, anything you put aside can help give you a more comfortable future. Aim to take full advantage of any company match you get from a 401(k) at work — that’s free money — and borrow against or cash out retirement funds only as a last resort.

2. Save for a rainy day

You may have read that you need an emergency fund equal to three to six months of expenses, but it can take years to save that much. That’s too long to put off other priorities, like saving for retirement. A starter emergency fund of $500 can be your first goal, and then you can build it up. While you’re saving, try to create other sources of emergency cash, such as a Roth IRA (you can pull out your contributions at any time without taxes or penalties), space on your credit cards or an unused home equity line of credit.

3. Save for college

Got kids? Open a 529 college savings plan and contribute at least the minimum, which is typically $15 to $25 a month. Retirement savings comes first, but anything you can save will reduce how much your child may need to borrow. Also, research shows the simple act of saving for college increases the chances that a child from a low- to moderate-income family will go to college.

4. Borrow smart for college

A college degree can pay off in higher earnings, but lenders may allow you to borrow far more than you can comfortably repay. If you’re borrowing for your own education, consider limiting your total debt to what you expect to make your first year out of school. If you’re a parent borrowing for a child’s education, aim for payments that are no more than 10% of your after-tax income and that still allow you to save for retirement. If your payments are higher than 10% of your after-tax income, investigate income-driven repayment plans that could bring down your costs.

5. Use credit cards as a convenience

Credit cards offer convenience and can protect you from fraud and disputes with merchants. But credit card interest tends to be high, so don’t carry credit card balances if you can avoid it. If you routinely pay your balances in full, look for a rewards card with a sign-up bonus that returns at least 1.5% of what you spend.

6. Finance your home smartly

If you want to be a homeowner, the best time to buy your first home is when you’re financially ready and in a position to stay put for a few years. Opt for a mortgage rate that’s fixed for as long as you plan to remain in the home, and don’t make extra payments against the principal until you’ve paid off all other debt and are on track for retirement.

7. Buy used vehicles and drive them for years

Buying a car right now isn’t a great idea; supply-chain kinks and other pandemic-related issues have inflated the cost of both new and used cars. In general, though, buying a used car can save you a ton of money over your driving lifetime, as can driving your car for many years before replacing it. These days, a well-maintained car can last 200,000 miles without major issues, according to J.D. Power. This means you can get roughly 13 years of service out of your car if you drive it 15,000 miles a year. Ideally, you would pay cash for cars. If you need to borrow, try to limit the term of your loan to a maximum of five years.

8. Insure against catastrophic expenses

Use insurance to protect yourself against catastrophic expenses rather than smaller costs that you can easily pay out of pocket. If you have sufficient savings, consider raising the deductibles on your policies to save money on premiums. Be careful about high-deductible health insurance policies, though. Having a high deductible could cause you to put off medical care, and it’s better to err on the side of safety when it comes to health.

This article was written by NerdWallet and was originally published by The Associated Press.

Gen Z characteristics: how this generation will redefine finance in the next five years

financialnews1 on December 9, 2021

Image source: Getty Images

Even in comparison to their young millennial counterparts, Gen Z’s characteristics are different in many ways. Born between 1996 and 2010, Gen Z is anywhere between 11 to 25 years old in 2021. They account for about one-third of the world population and have an estimated spending power of $143 billion. Not to mention they’re also on their way to inherit billions more in the next decade.

A couple of Generation Z’s characteristics, like their close relationship to their phones, are obvious to spot from the outside. But what we don’t see as easily, such as their financial habits and mindset, are to redefine our world in the next five to ten years.

Here is a rundown of Gen Z’s financial habits and what to expect in the next five years as they grow into their own and take the financial world by storm. 

Gen Z money habits

The straightforward truth is that Gen Z are stressed about money. Many of them are entering the job market in a highly volatile market, and a recent study showed that 72% of Gen Zers reported experiencing pressure when it came to their financial futures. 

The anxiety that they feel means that, even at a young age, Gen Z are regularly thinking about money and are conscious about their financial future. Perhaps as a result of this, they’re known to be the most financially savvy generation yet, and fiercely budget as a result. A study by Clearpay shows that ​​63% of Gen Z are saving more each month than when their parents were the same age. In addition, they view debt as very bad and go the extra mile to avoid it. Instead, many of them are involved in side hustles to supplement their savings. 

Gen Z investment habits 

Independent and extremely tech-savvy, Gen Z care deeply about their financial futures and invest early. With phones attached to their hands at all times, they’re in tune with financial news, check their portfolios regularly and care about the social and environmental initiatives of the companies they invest in more than older generations. 

When it comes to investing, Gen Z are very risk-tolerant. They’re the first generation to be investing so early and independently, and a study by Barclays shows that nearly half of these young investors plan to invest short term (between 2-5 years) and are making speculative investments. They also may be over-investing in hopes of maximising their returns; 59% report that a substantial investment loss would have a fundamental impact on their future or current lifestyle.

Gen Z banking habits 

It may come as no surprise to you that Gen Z prefers digital, easy and quick solutions to their banking. They are a mobile-first generation and are contributing to the decline in bank branch networks all over the world. As the leaders of using digital solutions, they are nearly three times more likely to use banking and investment apps in comparison to older generations (59% vs 19%). In addition, although Gen Z are very avoidant of debt, they are 50% more likely to use “buy now, pay later” schemes such as Klarna and Payl8r in comparison to older generations, 

How Gen Z will affect the world of finance 

This tech-savvy, early investing generation will only continue to make up a larger and larger portion of consumers and investors in the next five years. As a result, here are a couple of things you can expect: 

  • Fintech will grow tremendously in order to keep up with Gen Z’s demands. Merely digitising current experiences won’t drive growth. Offering brand new, innovative and cheap banking/investing solutions will be key;
  • Physical branches will have less and less importance for banks;
  • Contactless payments and “buy now, pay later” systems will become more popular;
  • Gen Z will likely be the most investment-savvy generation yet as their experiences at a young age will set them up for success in their futures. Most are likely to manage their investments themselves;
  • Because Gen Z’s environmental and social concerns are high, companies will have to show more than just good financial returns in order to retain Gen Z’s investments and business. 

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Some offers on The Motley Fool UK site are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.

Can the Rolls-Royce share price survive Omicron?

financialnews1 on December 9, 2021

The Rolls-Royce (LSE:RR) share price, and the stock market in general, has welcomed a bit of a rally over the last few days. After early data showed that existing vaccines will be effective against the Omicron variant, investors’ nerves have somewhat calmed… for now.

However, current UK infection rates are nearing all-time highs, with Omicron acting as a driving force. As such, the probability of another round of lockdowns is climbing. And if it’s anything like what we saw in 2020, Rolls-Royce could be in for further disruption. But can the company prevail?

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Lockdown potential

Rolls Royce has several sources of income as its divisions, focus on a variety of sectors. However, revenue from its aerospace segment represents a large chunk of its cash flow. So it’s not surprising that after travel restrictions were put in place in 2020, this source of income quickly, albeit temporarily, dried up. That’s undoubtedly why the Rolls-Royce share price collapsed in March last year.

Since then, the stock has made a slight recovery. But its 12-month performance is still basically flat, and it continues to trade below pre-pandemic levels. Yet the underlying business has made some encouraging progress, in my opinion.

Looking at today’s trading update, free cash flow is on the rise, thanks to recovering order volumes. As such, management forecasts that it will come in higher than its initial 2021 target of £2bn.

Meanwhile, the company has undergone a major structural overhaul that has delivered over £1bn of savings so far this year. Combining that with a further £2bn of cash from the disposal of non-core assets, Rolls-Royce’s balance sheet is looking much stronger than at the start of 2020. At least that’s what I think.

This is undoubtedly encouraging news, but is it enough to survive another round of lockdowns if harsher restrictions were brought in?

2022 could be a challenging year

Assuming the worst-case scenario, 2022 might see the return of both travel and lockdown restrictions. Needless to say, this could reverse much of the solid recovery progress made by the aerospace industry. And it would likely once again disrupt Roll-Royce’s supply chain for all its divisions, as well as reduce demand for its services.

The increased cash balance does provide the firm with more flexibility than the previous time. However, that capital might not last long, especially since £300m of original equipment expenses are now expected to land in 2022. Should Rolls-Royce’s revenue stream once again evaporate, and the cash reserves get depleted, then I think it’s likely the share price will take a tumble.

So can the stock survive?

All things considered, while there may be volatile times ahead, I believe Rolls-Royce is capable of persevering. However, should the worse come to pass, even if the business survives, it may be years before its share price can return to its former glory.

Personally, I think there are far better investment opportunities for my portfolio elsewhere.

Opportunities, such as…

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In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

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Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The Royal Mail share price remains undervalued

financialnews1 on December 9, 2021

The Royal Mail (LSE: RMG) share price has jumped around 14% since the beginning of November. But I think the stock remains undervalued, despite this performance. 

Indeed, shares in the delivery company remain below their 52-week high of 606p. Over the past 12 months, the stock has returned 46%, excluding dividends. 

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Growth returns

To understand why Royal Mail has performed so well over the past year and continues to look undervalued, in my opinion, I need to highlight how the City’s growth expectations for the business have developed over the 12-month period. 

This time last year, analysts had pencilled in earnings per share of 9p for the firm in its 2022 financial year. Analysts were also forecasting earnings of 18p for fiscal 2023. 

However, a year later and analysts are forecasting earnings per share of approximately 61p for this financial year and fiscal 2023. 

The reasons behind the upgrades are twofold. First of all the company’s revenue performance has been better than expected. Parcel delivery volumes have continued to exceed expectations as consumer trends developed during the pandemic have persisted. 

The company has also reduced costs and improved efficiency faster than expected. 

These twin tailwinds have catapulted profits higher, and shareholders are reaping the rewards. As well as the capital gains registered by the stock, management has also outlined plans to return £400m to shareholders with dividends and a share buyback.

Using these figures, the stock currently yields 4.7%. And based on City growth estimates, the Royal Mail share price is currently selling at a forward price-to-earnings (P/E) multiple of 7.3. Its five-year average P/E is closer to 10. 

The outlook for the Royal Mail share price 

Considering the current trends in the parcel delivery market and Royal Mail’s progress in cutting costs and improving efficiency, I think the company has enormous potential.

This potential, as well as the firm’s current valuation, are the reasons why I think the stock is undervalued. 

That said, the company does face several risks and challenges. These include rising labour costs and the supply chain crisis. Both of these issues could significantly impact the group’s overall cost base, reducing overall profitability and growth. I will be watching to see how these affect the corporation as we advance. 

I will also be keeping an eye out for Royal Mail’s progress against competitors. The delivery market is only becoming more competitive, so the firm needs to keep ahead of its rivals or it could be left behind. 

Still, even after taking these risks into account, I think the company has a lot of scope to grow over the few years. Management’s plans to reward shareholders with extra cash also suggest that further cash returns could be on the cards as profits rise. Based on these factors, I would buy the shares for my portfolio today. 

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  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
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Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

: 30 scientists from 15 universities set out to motivate 61,000 people to go to the gym. Change is possible — and it’s cheap

financialnews1 on December 9, 2021

Don’t feel like going to the gym today? Try a fiscal stimulus.

Thirty scientists from 15 U.S. universities oversaw the physical exercise regime of 61,293 members of a U.S. fitness chain. Collaborating in small independent teams, they designed 54 different online fitness programs over four weeks.

They wanted the participants to up their game, and the one way to figure out how best to do that? Create a “megastudy” to keep as many variables as constant as possible, and apply the same standards to every person, except for the incentive.

The results of this massive study were published in the latest issue of the peer-reviewed journal Nature. In previous studies, forecasts by impartial judges failed to predict which interventions would be most effective, the paper concluded.

“The scientists found that 45% of their interventions significantly increased weekly gym visits by 9% to 27%.”

“Different scientists test different intervention ideas in different samples using different outcomes over different time intervals,” it said. “The lack of comparability of such individual investigations limits their potential to inform policy.”

Change is possible, and it comes cheap. “Rewarding participants with a bonus of 9 cents for returning to the gym after a missed workout produced an estimated 0.40 more weekly gym visits per participant — a 27% increase in exercise,” they said.

A little extra also helps. “Second, offering participants larger incentives ($1.75) produced an estimated 0.37 more weekly gym visits per participant — a 25% increase in exercise) compared with the placebo control,” the scientists found.

“Behavioral science has encouraged people to do everything from pushups to saving money for retirement.”

The initial results were impressive: 45% of the interventions significantly increased weekly gym visits by 9% to 27%, and the No. 1 intervention offered these “micro-rewards” for going back to the gym after skipping a workout.

And now for the caveat. “Only 8% of interventions induced behavior change that was significant and measurable after the four-week intervention.” One possible explanation: People may have accustomed to their little fiscal treats.

The authors say their paper, “Megastudies improve the impact of applied behavioural science,” aims to overcomes the challenge of trying to make sense of and compare a variety of different tests and real-life experiments.

“Nudge theory suggests that small tweaks in ‘choice architecture’ can help steer people toward decisions that will benefit them.”

Behavioral science such as this has the potential to help people’s financial and physical health. The “every little helps” trope is not exactly new, and has encouraged people to do everything from pushups to saving money for retirement.

Nobel Prize winning economist Richard Thaler’s nudge theory has helped workers bolster their retirement accounts by almost $30 billion, encouraged people to eat more fruits and vegetables, and even helped men improve their aim into urinals.

“Nudge theory” is based on the idea that small tweaks in “choice architecture” — in how choices are presented to consumers — can help steer people toward decisions that will benefit them, such as walking 10,000 steps a day during the pandemic.

“But micro-incentives work both ways: They can get people to look after their own wellbeing or buy things they don’t need.”

But these micro-incentives work both ways: They can get people to look after their own wellbeing or — as smartphone notifications so deftly illustrate — they can also tempt consumers to spend more money, and to constantly want more stuff.

In fact, earlier this week Pope Francis, the leader of the Roman Catholic Church, invoked ancient Greek poetry — the Sirens from Homer’s “Odyssey” to be exact — to sound the alarm on contemporary consumerism.

“Today’s sirens want to charm you with seductive and insistent messages that focus on easy gains, the false needs of consumerism, the cult of physical wellness, of entertainment at all costs,” the pontiff said.

The lesson? Less push notifications — and more pushups.

Related: How a ‘self-nudge’ could help you make better money and life decisions

Outside the Box: Are you healthy enough to retire?

financialnews1 on December 9, 2021

I was recently talking with a younger acquaintance about my decision to leave the workforce early. I’d left a demanding career to pursue my personal passions, while I was still young and healthy enough to do so.

My acquaintance is in his early 30s. He’s single and makes a boatload of money working in IT for a pharma company. He’s also a big proponent of the FIRE (financial independence-retire early) movement. He takes part in Reddit boards and reads every investment article he can get his hands on. His goal, he told me, is to sock away every dollar he can so that he, too, can retire early one day. Hopefully even earlier than I did, he said with a grin.

Read: The best reason of all to postpone retirement

Before I knew it, my young friend was telling me about his portfolio. Between his 401(k)s and taxable accounts, he’s already accumulated a portfolio that’s well into six figures. It’s spread across low-cost mutual funds and ETFs, with a sprinkling of individual stocks. Still, he said, he was always looking for investment advice. Were there any tips I could share with him for a successful early retirement?

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While I have an M.B.A. and worked in investor relations for a number of years, I make no claim to be an investment expert. I was fortunate early in my life to have read the advice of people like Warren Buffett and John Bogle. I learned from them about the power of dollar-cost averaging and investing in low-cost mutual funds that track the market. By riding those two dull horses through the ups and downs of turbulent markets, I’ve been able to achieve a modest measure of financial security for myself and my family.

But it was clear that my young friend already had these investment fundamentals well in hand. To be honest, my concern was not about his finances, but his health. Despite being young, he was at least 30 pounds overweight. He carried an unhealthy spare tire around his middle. If he didn’t get his weight under control, he may not reach that early retirement he’s working so hard for.

With all the discretion I could muster, I gave him my tip. If he wasn’t already doing it, I suggested he get started early on a disciplined exercise program that included at least two to three hours of moderate exercise every week. I told him about all the research showing that seniors in their 70s and 80s who’d been working out regularly for 30 or 40 years had the hearts and skeletal muscle health of people 30 years younger.

Read: Living longer means more years spent with serious illness — learn how to increase your health span

“The younger you start, the better off you will be,” I said.

My friend’s face screwed up. He clearly wasn’t expecting this. I think he was hoping to get my thoughts on investing in bitcoin or buying option contracts as a way to manage downside risk. But I wouldn’t have been the person to ask about those things, anyway, since I haven’t dabbled in either.

But the value of exercise—that I could talk about. I told him that I’d started my regular workout program in my early 30s, when I was having pain in my knees and lower back. I was 20 pounds overweight at the time, and it didn’t help that I had beaten up my joints playing basketball in high school and college.

I went to see an orthopedic specialist. He took an MRI and told me he saw evidence of early arthritis and cartilage damage. Based on the shape of my knees, the doctor said, I would likely need a knee replacement in 20 years. Maybe even sooner. And oh, by the way, the doctor said—my blood pressure was a bit higher than he would like it to be.

That was all I needed to hear. I went to a physical therapist, who recommended a program of five workouts per week of 45 minutes each, mixing cardio and light weights. It included exercises to strengthen the muscles around my knees.

More than 30 years later, at age 62, I’m still at this routine. I haven’t had to replace either knee, and hope never to. My body-mass index and blood pressure are where they need to be. My doctor says that I have the resting pulse and heart health of someone in his 40s. Just as important, my fitness routine helped immensely in reducing stress and managing a genetic tendency toward anxiety and depression.

I told this to my young friend not to brag, but to point out the logic of approaching investment planning and health planning with the same discipline. There’s no guarantee that starting an exercise program early will lead to a long, happy life, just as there’s no guarantee that our well-diversified investment portfolio will be able to support us all the way through our golden years.

But it’s about odds, isn’t it? Working out regularly increases our odds of living longer, and—more important—having quality golden years. What good is retiring early with a couple of million dollars if we don’t have the health to enjoy it?

My young friend thanked me for my advice and walked away. He recently called me to give me the happy news that he’d joined a gym. I hope he sticks with it. It might be the best investment decision he ever makes.

This column first appeared on Humble Dollar. It was republished with permission.

James Kerr led global communications, public relations and social media for a number of Fortune 500 technology firms before leaving the corporate world to pursue his passion for writing and storytelling. His book, “The Long Walk Home: How I Lost My Job as a Corporate Remora Fish and Rediscovered My Life’s Purpose,” is forthcoming in early 2022 from Blydyn Square Books. Check out his blog at PeaceableMan.com. His previous articles were Challenging Myself and Reclaiming My Life.

2 metaverse stocks that could be future industry leaders

financialnews1 on December 9, 2021

The realm of metaverse stocks is a relatively new concept to investors. But it’s already grabbing plenty of attention. The idea of creating a persistent 3D virtual environment through the internet is quite an exciting and ambitious goal. And achieving it will require some serious technological innovation.

With that in mind, what are the best metaverse stocks to invest in? A common go-to answer is the recently re-titled Meta Platforms (Facebook). But are there more promising opportunities elsewhere?

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

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A leader in graphical chips to power the metaverse

Designing a graphics processing unit (GPU) is an arduous task. That’s why there are only a handful of graphic card companies out there, the king of which is arguably Nvidia (NASDAQ:NVDA). Its technology is often synonymous with gaming. But its chips are being used throughout multiple industries, including cloud computing, artificial intelligence, and even self-driving cars.

Over the last decade, this stock has risen more than 8,500%! And even during the past 12 months, it continues to grow at an impressive triple-digit rate. That’s hardly surprising given the enormous and ongoing demand for Nvidia’s technology. And it’s why, to me at least, this stock is a prime candidate as a metaverse investment for my portfolio, although I’m not buying just yet.

The company is in fierce competition with Advanced Micro Devices, which has also begun tapping into similar target markets. The battle between these tech titans is unlikely to end any time soon. And it’s possible Nvidia could find it difficult to expand its market share, especially since its recent attempt to acquire Arm is in the process of being blocked by regulators. Nevertheless, I remain tempted by this firm’s track record.

A metaverse stock solving the building problem 

Modelling, unwrapping, and texturing 3D environments is a time-consuming process that’s easily one of the primary reasons video games take several years to make. As someone who previously worked in this industry, I believe building the metaverse using this traditional route is simply not a viable approach. That’s what makes Matterport (NASDAQ:MTTR) so intriguing.

This young business has developed its own photogrammetry technology that can be used from an iPhone. In simple terms, it deploys artificial intelligence to construct 3D environments by scanning real-life locations with a camera. A process that would take hours for an experienced 3D artist could take minutes for someone on their phone.

It’s undoubtedly impressive technology. But is there a viable business here? Matterport sells its software as a service through monthly subscriptions. This generates a recurring revenue stream growing at an impressive double-digit rate. Both are desirable traits, in my opinion.

However, like most technology stocks, it remains an unprofitable venture. And after only recently becoming minted as a public company, I think it’s a bit early to add it to my portfolio. But I’ll be closely watching Matterport moving forward.


Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

: Credit Suisse boosts S&P 500 target, citing strong economy and stalling stimulus legislation

financialnews1 on December 9, 2021

Credit Suisse strategists have boosted their 2022 price target, citing a strong economy and a lack of corporate tax hikes.

Strategists led by Jonathan Golub moved their S&P 500
SPX,
+0.31%
target to 5,200 from 5,000 — which would make an 11% improvement from Wednesday’s close.

The strategists say nominal gross domestic product will climb 7% next year, with 4% real GDP growth and 3% growth in inflation. A further decline in the unemployment rate will support the economy, as will improvements in backlogs and inventories.

Cyclical sectors should see the strongest margin, and earnings per share, growth next year.

But the big shift comes through taxes, or rather the lack of them. They no longer assume an increase in corporate tax rates accompanied by additional stimulus, which will send 2022 earnings per share for S&P 500 companies to $235 from $230, and 2023 EPS to $255 from $250.

The Biden administration so far has failed to win over two key centrist Democrats, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, for the Build Back Better Act that the House has passed. The legislation has written imposes a minimum tax for corporations with profits over $1 billion, and creates a 1% excise tax on stock buybacks.

The strategists say they’re overweight cyclical sectors of energy, materials, industrials, and non-internet retail, and market weight technology, internet service and internet retail. “We would re-evaluate this positioning should the yield curve flatten further, nominal growth fade, or earnings trends reverse,” they said. They downgraded their financial and healthcare ratings to underweight.

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