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.

For those who aren’t familiar with MoneyLion, it’s a comprehensive digital financial ecosystem that acts as a one-stop marketplace for consumer banking, lending, investing, and money management tools. The company’s platform connects over 18 million customers with more than 1,200 financial partners, helping everyday Americans access the financial products they need and make smarter money decisions.

Let’s run the stock through The Value Meter to see whether it still has room to run after its eye-popping rebound.

The numbers paint a compelling picture. MoneyLion’s enterprise value-to-net asset value (EV/NAV) ratio sits at just 3.19, a whopping 49% discount on the average of 6.22 for companies with positive net assets. In plain English, you’re paying just $0.51 on the dollar.

The story gets even better when we look at cash generation. Over the past four quarters, MoneyLion’s free cash flow averaged 14.46% of its net assets – nearly double the 7.76% average among companies that consistently generate positive cash flow. This shows that MoneyLion isn’t just cheap; it’s also highly efficient at turning its assets into cash.

The company’s latest results reinforce this strength. In the third quarter, revenue jumped 23% year over year to $135 million, while adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 83% to $24 million. Even more impressively, the company’s total customer base grew 54% to 18.7 million, proving that its services are resonating with consumers.

Looking ahead, management expects growth to accelerate and is forecasting 34% year-over-year revenue growth in Q4. They’re also making smart moves to expand their ecosystem, including recently launching “MoneyLion Checkout,” which will streamline how customers shop for financial products. This new feature has already shown promising results, with pilot partners seeing 25% higher click-through rates and 150% better conversion rates.

When you combine MoneyLion’s bargain-basement valuation with its impressive cash generation and accelerating growth, you get a stock that looks meaningfully undervalued. While the recent price surge might make some investors nervous, the fundamentals suggest there’s still substantial upside ahead.

For investors who are willing to look past the recent volatility and focus on the company’s strong fundamentals, this fintech player could offer compelling value at current levels.

The Value Meter rates MoneyLion as “Slightly Undervalued,” but it’s bordering on “Extremely 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 This Fintech Stock Could Be Ready to Roar appeared first on Wealthy Retirement.

The Oxford Club certainly adheres to this theory. The Oxford Wealth Pyramid, which we consider to be “the blueprint for financial independence,” recommends that your portfolio includes a core portfolio, “Blue Chip Outperformers,” targeted trading, and other strategies to ensure a broad mix of investments that should pay off over the long and short term.

But it’s not just about diversifying your stocks or even diversifying across asset classes. I recommend you also diversify where you keep your investments and cash. I learned the hard way about the risk of having most of my money in just one financial institution.

Shortly before the global financial crisis, I invested nearly all of my cash in what were supposed to be very short-term, very conservative notes. I expected that my cash would earn a superior interest rate and would be available to me when I needed it.

But when the economy and financial markets seized up, my broker froze those notes – and my cash along with it.

I eventually got all of my money back, but it was a long year until I did.

At the same time, my bank – one of the largest in the country – went under. Fortunately, the larger bank that rescued it handled the transition seamlessly (though they’ve been awful to deal with ever since).

After those two harrowing experiences, I vowed to never be in the same situation again. I now make sure to spread my investments and cash over various financial institutions. That way, if one goes down and my assets are locked up, I’m not scrambling trying to figure out how to pay the mortgage.

Unfortunately, as I write this, more than 100,000 banking customers who used various “fintech” apps have been locked out of their accounts for nearly two months. Fintech, short for “financial technology,” refers to technology that supports banking – often in the form of third-party apps that connect to bank or financial institution accounts.

In this case, Synapse, a company that served as a middleman between the fintech apps and the banks, went bankrupt and locked users out of their accounts. Most users probably didn’t even know Synapse was part of their transaction process.

Having multiple bank and brokerage accounts is not terribly convenient. You have to keep track of more accounts, more user IDs and more passwords. But just in case something unfortunate happens in the coming years – and let’s face it, between the economy, cyberattacks, a shaky electric grid and good old-fashioned mismanagement, it probably will – it’s a good idea to have assets in a number of different places.

It’s like having a coffee can stuffed with cash in the cupboard and a shoebox full of cash buried in the backyard. Even if someone were to steal the coffee can, you’d still have the shoebox – only in this case, the shoebox is called Fidelity, Schwab, Vanguard, etc.

The stress of having my savings locked up for a year was awful. I’ll never again allow one institution to have that much of an effect on my life.

Diversify your financial relationships just like you do your portfolio.

The post The Hidden Truth About Diversification appeared first on Wealthy Retirement.

Matthew is an expert in identifying trends, especially in cannabis and technology, that promise to change the market as we know it.

Regardless of whether you prefer to invest in tomorrow’s biggest players or in the household names you already count on today, it pays to trust the experts and, as Matthew writes below, not panic in the face of volatility.

Read on below to discover why Matthew believes investors should be excited about today’s most disruptive technologies.

– Mable Buchanan, Assistant Managing Editor

Douglas Adams wrote my favorite book of all time, The Hitchhiker’s Guide to the Galaxy.

And I always quote “Don’t panic” when we talk about volatility.

But in the late 1990s, Adams also penned a very insightful essay, “How to Stop Worrying and Learn to Love the Internet.”

In it, he laid down three rules that govern our attitudes toward technology.

I’ve relied on these over the years to help me spot opportunities in new fields.

Adams’ three rules are…

1. Everything that’s already in the world when you’re born is just normal.
2. Anything that gets invented between then and before you turn 30 is incredibly exciting and creative and with any luck you can make a career out of it.
3. Anything that gets invented after you’re 30 is against the natural order of things and the beginning of the end of civilization as we know it until it’s been around for about 10 years when it gradually turns out to be alright really.

In short, the world is far from stagnant. Technology always marches forward.

The same is true of the markets.

That’s why I looked at the 10 industries that are supposedly “the beginning of the end of civilization.”

But I believe these are the sectors that investors will learn to love over the next five years.

Cloud computing has been one of my favorite sectors to target for quite some time. I’ve booked triple-digit gain after triple-digit gain – even when many analysts turned their backs on it.

“The growth is over,” they claimed.

Well, they were wrong.

Big names in the sector continue to post even bigger gains. In fact, Microsoft (Nasdaq: MSFT) is hitting new highs on major contract wins as it works to close the gap with Amazon Web Services.

The global cloud computing market is expected to be worth more than $712 billion by 2025.

Fintech is another massive opportunity, projected to be worth more than $305 billion in the next five years.

Plus, there’s the revolutionary 5G space. Globally, we’re looking for this to be worth more than $250 billion by 2025. And that will affect all aspects of our lives.

Just as important, 5G makes autonomous vehicles, artificial intelligence, medical robots and the rest of the “Fourth Industrial Revolution” technologies a reality.

But even though a market might not be worth hundreds of billions in five years, that doesn’t mean it fails to offer exciting opportunities.

Let’s look at esports.

This is an industry that’s just beginning to really take root. But it already has a high level of visibility. Overwatch League games are televised on major networks. And the teams have loyal followings, just as any other traditional sport has.

Plus, esports continues to draw deep-pocketed investors, like New England Patriots owner Robert Kraft, who’s swooping in and gobbling up franchises.

There’s also the cannabis industry – which I follow closely. Conservatively, the global market is projected to be worth north of $75 billion by 2025. And we know the U.S. market alone will top $80 billion by 2030.

Pot stocks are no longer flying high in 2019. But the outlook is extremely bullish for the next five years and beyond.

Two decades ago, no one would’ve imagined that people could legally be making money selling pot or playing video games for a living.

Nor did most of us see a world where digital currencies could be traded and profited from.

But here we are.

Of course, finding the “next big thing” is only one piece of the puzzle.

The trickiest part is uncovering which companies in those disruptive sectors are going to produce the biggest gains.

And here, I apply my own three rules…

1. I want “20/20” stocks. These are gems where both revenue and earnings are increasing more than 20% each year.
2. I want to buy at a discount. I’m frugal and like to shop sales. So I want shares that have pulled back from recent highs.
3. And I want them to have more attractive valuations than their peers.

These are the basic rules I believe investors should follow for the biggest gains over the next five years.

Merely targeting disruptive technologies isn’t going to be enough. I believe we need to add in a mixture of technical indicators that can locate investments where the pressure is just beginning to build… and shares are about to pop.

If you combine all of this, you can help manage your risk versus reward. And position yourself to come out ahead…

Even if that means investing in something you think will be the “end of civilization as we know it.”

Good investing,

Matthew

The post Stock Investing Rules for Playing Today’s Newest Tech appeared first on Wealthy Retirement.

A seasoned researcher, Aaron comes to us by way of TheStreet, Yahoo Finance (where he was editor-in-chief) and Fortune.

A prolific writer and podcast host as well, he is excited to offer our readers his fresh perspective on the wide variety of changes affecting retirement and the world of money today.

Please join us in welcoming him to Wealthy Retirement. And this Halloween, read on to discover his insight into the spooky downsides of digital payment options.

– Mable Buchanan, Assistant Managing Editor

“A fool and his money are soon parted.”

Coined by Thomas Tusser in 1573, this saying has never been more relevant.

From phone calls from fake IRS agents to emails from Nigerian princes, old Thomas would be stunned by the dizzying array of ways today’s con artists try to separate people from their money.

If you’re reading this, you’ve probably been warned about the obvious scams…

Hopefully you also dodge the less obvious ones, like financial products with high fees that serve only the broker’s account and not yours.

While those issues get more attention from the mainstream press, we should be more concerned about all the legal and legitimate ways we’re voluntarily parting with our hard-earned dollars.

Let me explain…

The “Pain of Paying”

In Dollars and Sense: How We Misthink Money and How to Spend Smarter, Dan Ariely, a James B. Duke Professor of Psychology and Behavioral Economics at Duke University, and co-author Jeff Kreisler, editor of PeopleScience, explore “the pain of paying.”

The pain of paying is what we feel when we think about giving up our money. The pain doesn’t come from the spending itself but from our thoughts about spending.

The more we think about it, the more painful it is.

The “pain of paying” concept is based on studies using neuroimaging and MRIs, which show that paying stimulates the same brain regions as physical pain.

Pain avoidance makes perfect sense in a world where saber-toothed tigers are lurking, a minor scratch can lead to deadly infections and fire is the “hot” new technology.

But as with many things, our evolutionary development has not caught up with modern technology. Fintech provides new ways to spend our money, seemingly on a daily basis.

So Many Ways to Pay, So Little Money

Just this week, Uber (NYSE: UBER) launched Uber Money, a new division featuring a digital wallet. Riders and drivers can use the feature to store funds, track transactions and make electronic payments.

The initial focus is to help Uber’s drivers get paid and have access to funds in real time. Instant gratification is another feature of Uber Money, which limits the financial pain of using the platform.

Talking to CNBC, Uber Money chief Peter Hazlehurst focused on the needs of Uber drivers and consumers in the “cash-heavy economies” of Brazil and India.

He also expressed the desire “to help all of those people have access to financial services.”

Indeed, the ride-hailing giant is also offering upgraded debit and credit cards. It could ultimately offer no-fee banking accounts to its customers too, Hazlehurst said.

Uber’s financial services efforts echo those of other tech giants: Apple (Nasdaq: AAPL) recently launched a credit card backed by Goldman Sachs (NYSE: GS).

Facebook (Nasdaq: FB) is also attempting to launch a cryptocurrency.

(Although Facebook’s Libra looks dead on arrival after several corporate partners dropped out this month, Mark Zuckerberg’s ambitions in financial services remain very much alive.)

But Wait, There’s More…

Also this week, Bakkt, a Commodity Futures Trading Commission-regulated custodian of digital currencies, announced plans to launch a consumer app and merchant portal in 2020.

The company listed Starbucks (Nasdaq: SBUX) as its initial partner.

That’s right… you’ll be able to buy a mocha frappuccino with bitcoin using Bakkt’s app!

But regardless of whether you’re paying in cash or in bitcoin, you’re still paying Starbucks’ prices…

Of course, these offerings by Uber and Bakkt are in addition to the myriad existing ways you can already pay for goods and services.

According to the 2018 U.S. Consumer Payment Study by Total System Services (TSYS), debit cards are the most popular form of payment in America. They’re followed by credit cards and cash.

Debit cards have been No. 1 for several years. They’re the top choice across all age groups.

That’s good because debit cards are cashlike for budgeting purposes, even if (from a neurological perspective) they’re slightly less painful to use than paper money.

Not surprisingly, TSYS’ study also found rapid growth in mobile payments and peer-to-peer payment apps, especially among 18- to 24-year-olds.

“Today’s consumers look for products, tools and solutions offering convenience, simplicity and speed,” the study concluded.

That’s concerning because every step away from paying with cash diminishes the “pain of paying.”

Removing friction is good from a macroeconomic perspective. After all, more transactions drive more economic activity.

But this can be dangerous for a micro economy, such as an individual or family…

No Pain, No Gain

In his opening remarks to Congress on October 23, Facebook’s Zuckerberg declared, “Sending money should be as easy and secure as sending a text message.”

Wrong. Convenience and simplicity are great for sending emojis, but not when it comes to money.

What Zuckerberg, Uber’s Hazlehurst and everyone else involved in new forms of payment aren’t saying is clear…

The easier you make it for people to spend their money, the more money they’re going to spend.

“Avoiding pain is a powerful motivator,” Ariely writes. But it is “also a sly enemy: It causes us to take our eyes off value.”

Point being, you’re probably already thinking about what you’re buying – and whether you really need it or can get a better price somewhere else.

Even more important is to consider how you’re making the purchase. And while it goes counter to our evolutionary development, the more pain you feel, the better.

So next time you find yourself in Starbucks or a local independent coffee shop, forget the silliness about whether treating yourself to small indulgences is “bad.”

(Hint: It’s not, assuming you can afford them.)

Instead, recall the wise counsel of great thinkers like Tusser, Ariely and the Red Hot Chili Peppers:

Walk away and taste the pain

Come again some other day

Aren’t you glad you weren’t afraid?

Funny how the price gets paid…

Good investing,

Aaron

The post What Tech Giants Uber and Facebook Don’t Know About Money appeared first on Wealthy Retirement.

Investors have poured $17 trillion into negative-yielding bonds.

Think about what that means for a minute. Investors are so worried about rates falling even further that they’re willing to accept a guaranteed loss over 10 years (not to mention the decrease in buying power due to inflation).

Either that or they’re speculating on the Greater Fool Theory – that rates will go lower and someone will buy their negative-yielding bonds at a higher price than they are today.

(Bond prices rise when interest rates fall, and vice versa.)

For the average investor, saver or retiree, none of that matters. All we know is that we’re getting paid bubkes on our savings, which is a real problem, especially for retirees who rely on interest for some of their income.

Here are a few ideas for earning more income despite an ultra-low interest rate environment.

High-Interest Savings Account

The CIBC Bank USA Agility Savings Account pays an impressive 2.05%. This is an online-only account. There are no branches to go into. There are no maintenance fees, but there is a $1,000 minimum.

Money Market Account

Customers Bank has a 2.25% rate, but it has a $25,000 minimum. This is also an online-only account. There are no fees.

BMO Harris Platinum Money Market will pay you 2.2% with a $5,000 minimum. You’ll also get an ATM card. There are no monthly fees, but if your account balance drops below $5,000, you’re back to earning a paltry 0.05%.

Sallie Mae has no account minimum or fees. It yields 2%. This is also an online-only account. You are limited to six withdrawals per month.

Checking Account

Simple, which offers online-only checking, offers 2.02% with no account minimum. Accounts that are $10,000 or larger earn 2.15%.

Other Ideas

Peer-to-Peer Lending – I wrote about peer-to-peer lending in my book You Don’t Have to Drive an Uber in Retirement.

Sites like LendingTree and Prosper allow you to act as the bank and lend money to borrowers who are consolidating debt, improving their homes or pursuing other goals. The lower the borrower’s credit rating, the higher the interest you’ll earn.

I had been earning more than 6% on my portfolio for several years. This year, my return is down to 3.3% after a few defaults, and I stopped reinvesting the interest payments into new loans.

Once I halted automatic reinvestment, the cash that was paid to me as interest earned nothing and brought down the return of the portfolio.

Keep in mind that there is risk that the loans won’t be paid back. But if you have a portfolio of a few dozen loans (they can be as small as $25 each) that aren’t made to the lowest-rated borrowers, you should be fine.

Selling Covered Calls – This is a great strategy to generate extra income from a stock. You can buy a conservative stock with a decent yield like AT&T (NYSE: T), which pays 5.5% annually.

If you sell a covered call, you are selling an option that gives the buyer the right to buy your AT&T shares at a specific price by a certain time.

Now, AT&T is trading around $37. You can sell the January $38 calls for $1.05.

That means you will collect $1.05 per share, or $105 (options are sold in 100-share contracts).

If AT&T rises above $38, the buyer of the option can purchase your stock at any time before the third Friday in January (options typically expire on the third Friday of the month) for $38.

If AT&T is below $38 on that day, you’ll keep the $105. And you’ll collect the dividend while you’re waiting.

There are two risks with this approach…

One is opportunity risk. If AT&T is trading at $45, you will still have to sell your stock at $38 (unless you buy the option back for a loss).

However, you bought it at $37 and made an additional $1.05. Plus, you collected a $0.51 per share dividend, so you still made 6.9% in three months.

AT&T could also go lower, in which case you would lose money on the stock, though the $1.05 per share from the option and dividends would help buffer the loss.

In a bull market, selling covered calls is a great way to generate extra income – as long as you can handle the possibility that your stocks could go down.

Low interest rates are likely here to stay. The president is putting pressure on the Fed to send them even lower.

But you don’t have to settle for the ultra-low rates. You can take steps to earn extra income or yield. You just have to be flexible and willing to move money around.

Good investing,

Marc

The post You Don’t Have to Settle for Low Interest Rates appeared first on Wealthy Retirement.

Many of us are taking advantage of it.

In a recent Wealthy Retirement survey, nearly 16% of respondents said they use fintech services every day. Another 25% of those polled said they use them regularly, and 15% use financial technology only occasionally.

Digital payments are the most popular fintech service. Nearly 30% of respondents use digital payments most often, while about 4% said that they use wealth management tools like robo-advisors.

But a large proportion of our readers have yet to embrace fintech: Nearly 44% of respondents said they’ve never even used it.

That’s a huge growth opportunity for the current fintech market.

Fintechs have disrupted the way that banks do business, and more and more people are discovering its convenience every day. The current market still has a lot of potential to grow.

Retirement saving and investing are quickly becoming automatic with new services like Acorn and Wealthfront. Budgeting is easier too because financial technology has made it simpler than ever to monitor spending.

But this is just the beginning…

The market for financial technology has the potential to grow into a staggering $100 trillion.

Traditional banking is quickly becoming obsolete. Soon there will be no need to walk into a bank’s lobby to perform any financial transaction.

Fintechs are reinventing the financial system, and financial consumers aren’t the only ones who stand to benefit. Fintech investors are set to make billions.

Last Thursday, online fixed income trading platform Tradeweb Markets (Nasdaq: TW) went public. On the day of its IPO, Tradeweb’s stock price quickly traded up 25% higher than its offering price.

Keep a close eye on the fintech revolution. It has the opportunity to make your dealings with financial services easier while making your portfolio richer.

Good investing,

Kristin

The post Invest in an Automatic Winner appeared first on Wealthy Retirement.