Easily track or gain exposure to companies that have recently gone public

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An Initial Public Offering (IPO) is when a privately held company enters the publicly traded market through a new stock issuance. When it comes to tracking companies that have recently gone public in the last two years, there is an ETF that allows you to do that easily. That ETF is the Renaissance IPO ETF (IPO).

The Renaissance IPO ETF seeks to replicate as closely as possible the price and yield performance of the Renaissance IPO Index. The Renaissance IPO Index is an index that adds sizeable new publicly traded companies on a fast entry basis and the rest upon…


Learn the key differences between the two

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Although it may seem like sector and industry are used interchangeably, there are key differences between them. Sector is used to describe a large segment of the economy, while industry is used to describe a more specific group of companies. There is a key classification system, Global Industry Classification Standard (GICS), that helps to clarify the differences between a sector and an industry. Let’s dive into further differentiating the two.

Sector

A sector is one of the few large segments in the economy by which companies are categorized. When it comes to GICS, there are 11 sectors. Those 11…


Which ETF will lead the race?

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When it comes to Space, three key ETFs are leading the race. Those ETFs are the Procure Space ETF (UFO), SPDR Kensho Final Frontiers ETF (ROKT), and ARK Space Exploration & Innovation ETF (ARKX). Space is being looked at as the final investing frontier. In a 2020 research article, Morgan Stanley estimated that the global space industry could generate revenue of more than $1 trillion by 2040, up from $350 billion as of the research article. Satellite broadband is expected to represent 50% of that projected revenue number. …


One of the best performing semiconductor companies

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Advanced Micro Devices, Inc. (AMD) is an American multinational company that develops computer processors, graphics processors, and related technologies for both consumer and business markets. The company was founded in 1969. Over the past three years, the company’s stock has provided exceptional returns, a total return of approximately 647% and an average annual total return of approximately 96%. What has led to that performance? Increased market share in the computer processor business due to failed innovation from Intel and increased sales in the gaming hardware business challenging Nvidia have been two of the key factors.

Even with the strong performance…


Understand why a company may underestimate its performance

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In the investment world, sandbagging is a strategy where a company will lower its expectations by producing forward guidance that is well below its typical performance. Why might a company choose to sandbag? A company may want to sandbag due to a significant event occurring that they have no control of and will likely reduce their productivity and ability to produce revenue.

Sandbagging is something several companies did last year at the beginning of the pandemic. Although the pandemic did have its effects, many of those companies still went on to have “strong” performing quarters due to the lower expectations…


Understand how cash flows in and out of an asset

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You have probably heard on the news when a major ETF like SPY or QQQ experiences a major inflow or outflow of cash within a specific period. What is that inflow or outflow of cash specifically? It is fund flow. Fund flow is the net of all cash inflows and outflows in and out of financial assets such as ETFs and mutual funds. The following two points will help to simplify fund flow further:

1. Net Inflows vs. Net Outflows

2. Change in Fund Flow Reflects Change in Investor Sentiment

1. Net Inflows vs. Net Outflows

When it comes to…


Gain investment exposure to substance vital for all known forms of life

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Water is a substance that is vital for all known forms of living organisms. In late 2020, water futures based on the Nasdaq Veles California Water Index began trading on the CME. Water is essentially the most important commodity globally, so it makes sense that it is starting to gain more traction and interest from the investment world.

When it comes to us humans, water scarcity is a real, growing issue. Nearly two-thirds of the world’s population has been predicted to face water shortages by 2025. When it comes to the companies that are leading in water solutions today and…


Use credit to elevate, not deflate

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I see a credit card as a tool meant to elevate you. A tool that will put you in a position to qualify for any loan product you may want in the future. A credit card is a great tool when used correctly, but when it is used incorrectly, it can deflate you and put you in a financial position that can be difficult to get out of. When it comes to the five common credit card mistakes to avoid, they are as followed:

1. Only Making Minimum Payments

2. Missing a Payment

3. Not Reviewing Your Billing Statement

4…


Gain exposure to companies in fast-growing economies

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According to the World Economic Forum, since 2000, at least half of the world’s fastest-growing economies have been in Africa. That includes countries such as Nigeria, Ethiopia, the Democratic Republic of Congo, Egypt, Tanzania, Kenya, and South Africa. Additionally, by 2030, Africa will be home to 1.7 billion people, whose combined consumer and business spending will total $6.7 trillion. Gaining exposure to publicly traded companies in Africa can be slightly difficult. Thanks to two well-performing ETFs, you can have the chance to easily gain exposure to the expected growth over the next decade for economies across Africa. Those two ETFs…


An event you never want to be faced with

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If a margin call ever occurs for you, that means you were extremely overleveraged and have not properly calculated your risk management. A margin call occurs when an investor’s margin account falls below a broker’s minimum required amount for their account. A margin account is a type of account in which an investor can borrow money from their broker to buy securities such as stocks and ETFs. In further breaking down the meaning of a margin call, the following two points will help to simplify it further:

1. Maintenance Margin

2. Force of Sale of Securities If Maintenance Margin Is…

Tunji Onigbanjo

Financial literacy is important. Why not share the knowledge that has helped me? The Tunji Letter: tunji.substack.com

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