Now that the jump scares are out of the way, let’s talk about something truly frightening: being a shareholder of Fiserv (NYSE: FI).

I’m covering it for one reason only: It’s the worst-performing stock in the S&P 500 this year. Nearly two-thirds of its market value has vanished in just a few months.

For those who’ve held through the drop, it’s been a horror show. But the real question now is whether the frightful fundamentals are finally priced in.

The stock had already slid nearly 40% year to date entering this week, but the collapse came on Wednesday when the fintech firm slashed its annual earnings forecast and unveiled a broad executive shake-up.

Third quarter results showed the strain. Revenue missed expectations by more than 8%, operating income fell 10% year over year to $1.44 billion, and free cash flow fell 28% to $1.33 billion. Adjusted earnings per share dropped 11% to $2.04.

The company cut its full-year earnings per share forecast from a range of $10.15 to $10.30 to $8.50 to $8.60 – a 16% drop. That sent shares down 44% in a single day, the steepest fall in company history.

New CEO Mike Lyons called it a “critical and necessary reset.” Translation: Management uncovered accounting surprises, unrealistic growth assumptions, and weakness in Argentina.

The company is reorganizing under a new One Fiserv plan, with fresh leadership now steering its two core divisions – Merchant Solutions and Financial Solutions.

Fiserv still runs the digital “plumbing” of modern finance. It moves money and manages payments for banks like Citigroup and Wells Fargo, retailers such as Walmart, and even U.S. government agencies.

But investors don’t buy pipes; they buy profit flow. And right now, that flow looks uncertain.

Analysts haven’t been kind. Guidance cuts, board turnover, and vague long-term targets have shaken confidence. BTIG downgraded the stock, warning of a “laundry list of reasons” not to own it.

Still, total capitulation can create opportunity. When a company this central to the payments ecosystem resets expectations, it’s worth asking whether the pendulum has swung too far.

After all, The Value Meter doesn’t care about headlines – only fundamentals.

Fiserv’s enterprise value-to-net asset value (EV/NAV) ratio stands at 2.65, well below the universe average of 3.88 – a clear discount.

Its free cash flow-to-net asset value (FCF/NAV) comes in at 4.23%, more than four times the market’s 1.01% average.

And its 12-quarter free cash flow growth rate of 45.5% nearly matches the broad market’s 46.4%, showing that the engine’s still running even after the wreck.

Now, that doesn’t erase the company’s problems. Management still has to rebuild trust, stabilize margins, and prove that the reset wasn’t just spin. But when a profitable infrastructure firm trades at a discount while still producing healthy cash flow, the setup can be quietly compelling.

For now, fear dominates the narrative. But that’s usually when value begins to stir.

The Value Meter rates Fiserv as “Slightly Undervalued.”

What stock would you like me to run through The Value Meter next? Post the ticker symbol(s) in the comments section below.

The post Why Fiserv’s Bloodbath May Be Over appeared first on Wealthy Retirement.

JC is extremely plugged in to how government policies shape markets. Below, he discusses why the record-setting bearish sentiment we’ve seen lately could be setting up a historic rally.

– James Ogletree, Managing Editor

Sentiment is exponentially worse than it was back in 2016.

So, what does that mean for investors?

The upside is even greater!

It’s deja vu all over again, to quote the great philosopher Yogi Berra.

We’ve seen this before…

Back in the fall of 2016, sentiment was terrible.

So many people just assumed that a Trump presidency would lead to a stock market collapse and volatility spike.

Instead, 2017 was one of the greatest and least volatile years for the stock market in American History.

And it’s playing out in a similar way this time.

What’s the Trump Trade?

We look for divergences between what is actually happening and what investors think is happening.

The discrepancy between the two is currently at one of the most extreme levels in stock market history.

The American Association of Individual Investors (AAII) just reported this week that over half their members are bearish U.S. stocks over the next six months.

This is now the 11th straight week where more than half their members are bearish.

That’s never happened ever in history, and this data goes all the way back to the 1980s.

You can track the weekly reports of individual investor sentiment here at AAII.

Keep in mind that during Trump Squeeze 1.0 you had epic returns for the Nasdaq-100, the S&P 500 and the Dow Jones Industrial Average.

Those indexes rallied 46%, 33%, and 32%, respectively.

But, for the most part, the United States underperformed during that cycle. It was the international markets that really shined.

And the U.S. Dollar was falling.

Sound familiar?

I think Trump Squeeze 2.0 has already begun.

You’re seeing the rotation back into small-caps, and now even the large-cap U.S. growth is making a comeback.

Technology was the best performing sector last month.

And, when you look at the stocks that the Trump haters dislike the most – names such as Tesla (TSLA), for example – are ripping higher, up over 34% during the past month.

Remember that our TSLA call options literally doubled less than 10 hours after we put them on.

And don’t forget what helped inspire our entry point and why we’re making so much money in the electric vehicle manufacturer run by Elon Musk.

“Tampon Tim,” as he’s known in many circles, justifiably or not, is a former vice-presidential candidate who regularly brags about how broke he is and how he doesn’t own any stocks.

But he took the stage at a rally to describe how giddy it makes him to download a stock market app and watch the price of Tesla stock fall.

If that creepy dude giggling on stage about things he can’t afford isn’t a sign of a bottom, then you’re just not paying attention.

It was crystal clear. We’re profiting tremendously for embracing the sentiment.

And it’s a great reminder to us all to pay attention. Always pay attention.

The signs are there, regardless of your political affiliation.

Keep in mind, this isn’t about politics. It doesn’t matter who you voted for or how you feel about the current administration.

It’s only about making money and taking advantage of the vulnerabilities in the marketplace caused by irrational human behavior.

And humans tend to act even more irrational than usual when politics are involved.

We know this. We have the data.

So, we try our best to profit from it when we can.

What’s the Trump Squeeze 2.0 trade?

I believe it’s more of the same.

I still think Tesla has the potential to be the most valuable company in the world during the current administration.

Crypto is ripping. The communists holding back America’s position in the fast-growing crypto market have been fired.

A crypto-friendly administration has taken over and you’re seeing that reflected in the price action.

Here is the total crypto market capitalization pushing up against the highest levels ever:

“Total crypto market cap” is a calculation of the value of every crypto currency in the world added up.

As you can see on the right, Bitcoin (BTC) just crossed back above the $2 trillion market.

Ethereum (ETH) is pushing $300 billion, and some of the larger altcoins are increasing in value by the day.

Right now the total crypto market cap is over $3.2 trillion.

For perspective, it peaked at $3 trillion back in late 2021.

During the prior cycle, total crypto market cap peaked at just over $700 billion in January 2018.

If this cycle does what it did the last cycle, you’re looking at a total crypto market cap north of $10 trillion.

At the current rate, that would put Bitcoin somewhere in the neighborhood of $6 trillion, more than a 3X of current levels.

That’s a $300,000 price tag on a single Bitcoin, this cycle.

And that’s putting it conservatively.

Look out.

This Trump Squeeze 2.0 is just getting started.

This could be one for the record books.

The post Is Extreme Fear Setting Up a Historic Rally? appeared first on Wealthy Retirement.

But if you’re newer to Wealthy Retirement, the concept of studying stock charts may be unfamiliar to you.

Either way, in today’s column, Marc will share with you two of his favorite chart patterns – one of which he just used yesterday to close out a nearly 300% win in his VIP service Technical Pattern Profits!

If you’d like to learn even more about how to use chart patterns to supercharge your nest egg, keep an eye out for Marc’s column next Tuesday. He’ll also be teaching you about his No. 1 favorite pattern. (Hint: It was once used to set a world record!)

– James Ogletree, Managing Editor

In the fall of 1999, I excitedly walked into a classroom. It had been a long time since I’d sat in one of those chairs with the little attached desks while a professor dispersed knowledge.

My career in finance was just getting started, but I was fascinated to learn how traders use technical analysis to try to make sense of why stocks and markets move in the directions they do.

Sure, a company that grows its earnings over the long term will see its stock rise. But what about all of those short- and intermediate-term moves that didn’t seem to align with the news? And even for long-term investments, how do you ensure you’re not putting money to work just before a stock slides?

Technical analysis has many ways of looking at the markets. You can use cycle analysis, sector rotation, all kinds of complicated signals. But for me, what made the most sense – and still does 25 years later – is simple pattern recognition.

A chart pattern is just a visual representation of human emotions in the market – namely fear and greed.

These patterns tend to repeat, which tells us that humans often react in predictable ways.

And we can clearly see that on this stock chart:

This pattern is called an upward channel, but I call it a “Power Channel” in my VIP service Technical Pattern Profits. It’s marked by the stock rising along the lower trend line (also called an uptrend line) but getting capped at the higher channel line.

If you were looking at this stock in late January, when the stock was trading at over $140, you might’ve noticed that every time the stock had hit that upper channel line, there was a better buying opportunity shortly after. In fact, just a week or two later, you could have bought the stock at $135.

We don’t necessarily know (or care) why the stock sells off every time it hits the top line or why it rebounds when it hits the lower line. We just know that it does and that it’s repeatable – and we can use that to our advantage.

We also know that when the pattern changes, we ought to pay attention. If this stock had fallen below the lower trend line to $130 in February, that would’ve suggested that the pattern was broken and that we couldn’t rely on the stock rebounding back toward the upper channel line.

Another reliable pattern is the head and shoulders pattern. This is a very bearish signal that suggests demand for the stock is drying up.

A head and shoulders pattern occurs when a stock or market is rising and hits three peaks. After making the first peak (or left shoulder), the price declines a bit and then rises to a higher second peak, often on lower volume than it had for the first high. This second peak is known as the head. The price then drops again before climbing to a third peak that is lower than the second. Volume on this peak, the right shoulder, is lower than it was for the left shoulder or the head.

If all of these conditions are met, a head and shoulders pattern has formed. This is a strong sign that buying power is evaporating and that the bulls don’t have enough firepower to get the stock to a new high.

In his renowned Encyclopedia of Chart Patterns, Thomas Bulkowski looked at various chart patterns and quantified how successful they are at predicting stock moves. After studying 2,800 trades that displayed the head and shoulders pattern, he found that the average decline was 16% and the stock dropped 68% of the time when the pattern appeared.

That’s good information to know, because it tells you that if you notice a head and shoulders pattern in a stock’s chart, you’d be better off waiting and letting the price come back down. Or, if you’re an active trader, a stock in a head and shoulders formation would be a potential short candidate.

Whenever I discuss technical analysis, I always mention that stock charts and chart patterns are not crystal balls. But by understanding how human behavior repeats itself and how we can identify when those behaviors are occurring, we can greatly tip the odds of successful investing and trading in our favor.

All the best traders use charts and patterns. If you’re not using them, you’re leaving a lot of money on the table. Walking into that classroom (and several others after that) was one of the best decisions I ever made for both my career and my personal finances.

Good investing,

Marc

P.S. If you thought Power Channels and head and shoulders patterns were impressive…

Just wait until next week, when I tell you about my all-time favorite chart pattern.

In the Encyclopedia of Chart Patterns, Tom Bulkowski studied 307 instances of this pattern appearing in a stock’s chart…

And the stock moved higher every single time.

Plus, he wrote that this record-setting pattern “was the best-performing chart pattern in both bull and bear markets.”

Be sure to check out my column next Tuesday to learn more!

The post Don’t Trade Without These 2 Chart Patterns appeared first on Wealthy Retirement.

In reality, both the Dow and S&P 500 were up about 25%!

If only those people had looked at a newspaper or website, listened to the news… or just checked their brokerage statements!

Folks who thought the market was down or flat either were very unlucky or hadn’t looked at their statements all year.

This raises an interesting question: How often should you check on your investments?

As a general rule, the further away you are from needing the funds, the less you should be paying attention to them. This is particularly true of long-term retirement assets in tax-advantaged funds like 401(k)s and IRAs.

In fact, investors who remain hyperfocused on the market’s movements set themselves up for one of investing’s most dangerous bad habits…

The Danger of Emotional Investing

This goes double for the kind of person who panics when the market is going down… or, conversely, the kind of person who gets overly excited when the market is rising.

Emotional investors are better off checking statements less frequently. This helps them avoid making financial decisions out of fear and greed, which typically leads to poor performance.

“There is ample evidence from the field of behavioral finance suggesting that people tend to react to markets in a way that lowers returns,” says Michael Liersch, who holds a Ph.D. in cognitive psychology and is the global head of wealth planning at J.P. Morgan Asset Management.

These reactions create a destructive pattern…

If you can keep your emotions in check, I recommend reviewing your portfolios at least once a year – ideally around the same time each year.

How to Do an Annual Review – and Leave Anxiety at the Door

Rebalancing is an important discipline that often gets overlooked during bull markets. After a big year like 2019, individual asset classes or stocks can become a bigger part of your portfolio than you realize.

And taking that good hard look at your assets’ performance can minimize stress and prevent you from making poor decisions based on fear or greed…

For example, the average American investor has roughly 85% of their portfolio in U.S. assets, according to Vanguard. U.S. stocks have been a great bet for the past decade, but 85% in any one asset class is a high concentration of risk.

By trimming their exposure to U.S. stocks and adding international equities, these investors can become more balanced – and gain more peace of mind.

Similarly, investors who own 2019’s big winners like Apple (Nasdaq: AAPL) and Tesla (Nasdaq: TSLA) might find those stocks now make up oversized portions of their overall portfolios. In cases like this, you can trim, raise your stops or buy puts to protect your gains.

Again, if you’re truly a long-term investor, an annual portfolio checkup is ideal.

But if you’re investing the funds for a shorter time period (say three years or less), you’re going to need to pay closer attention to the market to understand how it might affect your wealth.

For folks in that category, a quarterly or monthly – or even daily, in the case of short-term traders – review makes sense.

Again, the key is to know yourself and figure out what makes sense for you and your portfolio.

Stay in Control by Building a Habit That Works for You

The same holds true for investing. I have long-term retirement assets that I tend to review on a semi-annual basis. My “nest egg” accounts are conservatively managed.

I also have a more speculative trading account I check more frequently – at least once a quarter. This is money I can afford to lose without really impacting my quality of life.

If you’re just starting to invest, or if you’re trying to figure out how frequently to check your accounts, here are some key questions (and answers):

• How soon are you planning to use the funds? The shorter the time frame, the more frequently you’ll want to check.
• How well can you handle big market swings? If you know seeing red arrows is going to send you into a panic, check less frequently. The same is true if you’re someone who gets overly excited when the market is going up.

Addressing these questions can give you peace of mind, which leads to better decision making and, ultimately, more control over your wealth.

Good investing,

Aaron

The post Are You Checking on Your Investments Enough? appeared first on Wealthy Retirement.

Have you ever lied about your age? Wished you could stay 30 forever? Spent too much time looking in the mirror, agonizing over new wrinkles? Been upset because you’re having trouble keeping up with your kids and grandkids?

If you answered yes to any of those questions, you have gerascophobia.

That’s the fear of getting old. And most of us experience it at some point or another.

But what scares us the most about aging?

According to our survey, the biggest fear among Americans is that we’ll suffer from Alzheimer’s, dementia or another age-related mental illness. That’s completely valid, seeing as Alzheimer’s (the most common form of dementia) affects between 2.6 million and 4.5 million adults ages 65 and older. Yikes.

The second most pressing concern is that we’ll run out of money. That too is understandable given that 1 in 3 Americans have nothing saved for retirement. In fact, 42% of Americans have less than $10,000 in savings. And we’re living longer than ever… so how are we supposed to afford our golden years?

While both of these fears are very real and sometimes unpreventable, there ARE ways to reduce the chances that they’ll actually occur.

If you’re afraid of losing your mental health, make a healthy lifestyle a priority. Eat well. Exercise. Socialize often. Stimulate your brain by learning new things, reading or doing crossword puzzles.

And if you’re worried about not having enough money, it’s never too early (or late) to start saving more. With a few simple strategies (like the ones outlined in Marc Lichtenfeld’s new book) and cost-cutting hacks, you can build up your nest egg.

Do what you can to be prepared.

Good investing,

Amanda

The post What Most Americans Fear About Getting Older appeared first on Wealthy Retirement.