Capnote Weekly Spotlight: 2 Quick Ways To Minimize Portfolio Losses

Welcome to the 18-Dec-2023 edition of Capnote Weekly Spotlight, which enhances your financial expertise and performance. 

In this edition (reading time 7 minutes), you’ll discover:

  • 2 quick ways to minimize portfolio losses before they occur.
  • Top gaining & declining trends including the long-term slide of telecoms.
  • This week’s special offer – earn income from your data & expertise.
  • Key events to watch for insight into the Delivery, Sports & Clothing sectors.

Get ahead of the curve! Join thousands of professionals using Capnote to augment and monetize their financial expertise. Sign-up for free (no credit card required). 

Tip Of The Week – 2 Quick Ways To Minimize Portfolio Losses

This week, financial professionals and investors are feeling some relief after the Fed indicated  that a reduction in interests rates is likely in 2024. However, as you consider deploying more cash into the markets, it is important to prepare portfolios for loss minimization before it is needed. Two best practice ways to do this include: 

1. Ensure there is adequate diversification.

  • Diversification involves understanding and limiting common characteristics across assets in a portfolio. This reduces the damage of unforeseen external changes. In his book the Intelligent Investor, Benjamin Graham states, “There should be adequate though not excessive diversification. This might mean a minimum of ten different issues and a maximum of about thirty, [if not using an index fund].” 
  • Capnote quickly helps with diversification by showing, in a single-click, some of the sensitive common characteristics in portfolios and watchlists including Industries, Investors, Suppliers, Customers, Indicators and even Tags. Capnote’s tags can include anything of importance such as commodities, company size, product components or country of domicile. 
  • To use this feature on Capnote, sign-up for free, click on Portfolios on the main menu, add assets to your portfolio and then click on the Sensitivities tab. You can use the filters to adjust which sensitivity you would like to view. Below is a sample. 

Capnote Weekly Spotlight: 2 Quick Ways To Minimize Portfolio Losses

Also Read: Capnote Weekly Spotlight: 3 Reasons Inflation Is Not Dead

2. Pay more attention to cashflow generation & not just capital gains.

  • Cashflow and income generated from assets in portfolios, during both positive and negative times for the broader economy, make a significant difference to returns. Examples of income generated can included dividends, payment of interest and principal, rental income and others.  
  • It’s particularly important to estimate as accurately as possible the certainty of cash flows and income under a variety of scenarios. Financial professionals and investors must attempt to understand variability in future cashflows, asset credit quality, dividend history, management’s commitment to dividend or interest payments and other related metrics. 
  • Capnote can help with some of these workflows. Its Algo-Notes feature constantly performs calculations on financial statements, comparing a  company to its prior performance and peer group. It will then give you notes and observations that may be worth checking further.

Note that the above list is non-exhaustive. There are other ways for professionals and investors to minimize portfolio losses such as using insurance, checking for historical correlations to the market & other risk management techniques. 

This Week’s Special Offer – Earn From Your Financial Data & Intelligence

Capnote is excited to announce that individuals and small businesses can now earn income on the platform by contributing data and intelligence. Here’s how:

1. Sign-up to Capnote for free. 

2. Go to the “Earn & Buy” tab to view paid tasks
3. Apply to listings that align with your interests, skills and expertise.
4. Our team will review your Capnote profile and reach out.

You can apply for multiple listings – the more you contribute, the more you earn!

Trending 

Sentiment Markers  

Over the last week, the Fed held base interest rates steady and indicated multiple rate cuts are likely in 2024. This spurred investor sentiment leading to gains in major stock indices. Following a run up, investors appeared to take profit from Bitcoin.

  • US 10 year treasury -7.48%
  • S&P 500 +2.49%
  • Hang Seng +2.80%
  • Crude Oil (Brent) +1.42%
  • US dollar index (DXY) -1.36%
  • Gold +1.51%
  • Bitcoin -5.06% 

Top Gains – Chemicals

  • Despite a relatively soft 2023, Statista estimates a compound annual growth rate of 8.58% in the Chemicals Industry over CAGR 2023–2028.
  • Deloitte’s 2024 Chemical Industry Outlook, states, “The American Chemistry Council expects that capital spending for the US chemical industry will remain mostly unchanged year over year in 2024 before ramping up to a growth rate of 3%–4% annually in 2025–2026.”
  • The energy transition is a key driver of future chemicals demand.

Top Declines  – Telecommunications 

  • According to the recently released, Telecommunications Network Operators: 2Q23 Market Review, “In the first quarter of 2023, the global telecommunications (telco) industry experienced its sixth consecutive year-on-year (YoY) decline in revenues, which decreased by 3.5% to reach $448.3 billion.” 
  • AT&T and Verizon are often regarded as the leaders in the sector. Their stock prices are down -12% and -7% respectively in 2023. Over the last 5 years, their stock prices are down -23% and -32% respectively.
  • Reasons for declines in the sector include significant capital expenditure and debt for the roll out of 5G, weak pricing power and increasingly commoditized services. 

Sign-up to Capnote for free (no credit card required) to read more. 

Events & Notifications ⏰

Below is a selection of events and earnings expected this week.

  • 2023-12-18 Earnings – Uranium Energy Corp.
  • 2023-12-19 Earnings – Micron Technology, Inc.
  • 2023-12-19 Earnings – Fedex Corporation
  • 2023-12-19 Earnings – Rite Aid Corporation
  • 2023-12-20 Earnings – General Mills, Inc.
  • 2023-12-21 Earnings – Nike, Inc.
  • 2023-12-21 Earnings – Carmax, Inc.
  • 2023-12-21 Earnings – Paychex, Inc.

Use Capnote’s Intelligent Timelines to find events and customize alerts.

Written by Ikenna Ene


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