#29 - WSJ Feature

Author

Graham Schroeder
October 25, 2024

In partnership with

Your home base for investing, finance, personal growth.

This week we dive into BRICS 2024 Summit, Freedom Fund earnings reports, and why I was featured in a recent Wall Street Journal article.

Market Recap

  • Putin & Russia Host BRICS 2024 Summit

    • The BRICS Summit & aims to demonstrate that despite Western efforts to isolate Russia over the Ukraine conflict, Moscow retains significant backing from countries in the Global South. Leaders from China, India, and South Africa attended, highlighting growing cooperation between these nations and Russia in economic and geopolitical affairs​

    • BRICS discussed starting a new payment system that would offer an alternative to the Western-controlled SWIFT network. This system could help Russia, China, and other member nations bypass Western sanctions and establish greater financial independence​.

    • A creation of alternative financial systems by BRICS nations could weaken the U.S. dollar's dominance in global trade, reducing America's economic leverage. This would diminish the effectiveness of U.S. led sanctions and financial controls, which have been critical tools of influence.

  • McDonald’s ($MCD) E. coli Outbreak Linked to Quarter Pounders

    • $MCD is facing a serious E. coli outbreak linked to their Quarter Pounder burgers. Forty-nine reported cases have emerged across 10 states, resulting in 10 hospitalizations and one death.

    • Following the CDC's announcement, McDonald’s shares fell by approximately 7% in pre-market trading, reflecting investor concerns over the potential fallout from the outbreak.

    • The incident could lead to increased scrutiny on food safety protocols across the fast food industry, possibly influencing stricter regulations and altering consumer trust in similar chains.

  • Keurig Dr Pepper ($KDP) to Buy Energy Drink Ghost for Over $1 Billion

    • $KDP has agreed to acquire energy-drink maker Ghost for over $1 billion. Keurig will invest $990 million initially for a 60% stake, with plans to acquire the remaining 40% by 2028.

    • $KDP shares dipped by 4.72% following the announcement, as investors reacted to the news, despite Ghost’s rapid growth and popularity​.

    • The energy drink market is very competitive, with major players like Monster Beverage ($MNST) and Celsius ($CELH) alongside emerging brands like Ghost. With PepsiCo's stake in Celsius and Coca-Cola backing Monster, Ghost's acquisition by $KDP is an interesting move as it seeks to expand into this booming market​.

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Freedom Fund Portfolio

Freedom Fund Background: I created the Freedom Fund as a public brokerage account back in October of 2022 to share that anyone with a social security # and a bank account can begin their investing journey by investing a couple hundred dollars a week. Every week and month I post on X (@GrahamInvesting) public updates about the purchases, exits, dividends, and growth of the fund if you want to follow in real time. The biggest obstacle people have to investing is just getting started so I decided to start a new account at $0 to start from nothing with you.

Existing Home Sales Lowest Since 1995

As we approach the end of 2024, the U.S. housing market is facing one of its most challenging periods in recent decades. Home sales are on track to hit their lowest levels since 1995, with rising mortgage rates and home prices continuing to keep potential buyers on the sidelines. Even though inventory has seen some improvement, affordability remains a significant issue for many. In this section, we’ll dive into the data behind these trends, examine how they’re impacting local markets, and explore what lies ahead for homeowners and buyers alike as we move into 2025.

A recap on the Wall Street Journal by Nicole Friedman highlights the state of existing home sales today:

  • Declining Sales: U.S. home sales are on track to hit their lowest level since 1995, with September 2024 sales falling 3.5% year-over-year, reflecting persistently high home prices and elevated mortgage rates

  • Affordability: Mortgage rates remain above 7%, keeping potential buyers sidelined. Despite a slight dip in rates to 6.08% earlier in the year, the increase in recent weeks has further reduced home-buying affordability.

  • Inventory and Pricing: While home inventory has risen by 23% from the previous year, it remains below normal levels. The median home price in September 2024 was $404,500, a 3% increase from the previous year​

As I reflect on being featured in the Wall Street Journal article, it’s a unique experience to see our personal journey through the lens of a broader national trend. What started as a challenging home search in 2023 transformed into a strategic opportunity this past summer, as we noticed a shift in the market. Writing about my own story, tied into the larger housing market narrative, reminds me of how individual experiences can highlight the broader challenges and shifts that so many others are facing across the country. This moment is not just about my own home-buying process, but about the evolving landscape that affects us all.

My wife Lucy, dog Dean, and I were featured in the article.

Fortunately, I was able to purchase my first home in April of 2020, right as the world was shutting down from COVID. This first home built a major foundation for me being able to take advantage of getting our second home in 2024. There was a mental hurdle to get over, giving up a low interest rate at our first home (3.375%) and buying a more expensive home with a higher rate (6.5%). As existing housing and new construction continue to remain expensive in the broad landscape of our economy, this highlights even more the importance of working, saving, investing, and budgeting.

The most important thing you can do to take control of your finances is to stay out of consumer debt and budget for a house that works within your financial situation. The old standard of spending a maximum of 28% of gross monthly income on total housing expenses is becoming more challenging today for young individuals. In my opinion, 28-35% is a good range to sit in based on our current economic situation. No political party can save you in your situation. Focus on what you can control in your everyday life and stay patient.

The purpose of this newsletter is to encourage you and our other 77 Gazette subscribers to start and stay consistent with your personal, professional, and financial journey.

Thanks for investing your time reading this.

Disclaimer: Graham’s Gazette provides information and resources related to investing, financial topics, and personal growth for educational and entertainment purposes only. The content presented is not intended to be construed as financial advice. Readers are encouraged to conduct their own research and consult with qualified professionals before making any financial decisions. Graham’s Gazette and its creators do not assume any responsibility for the accuracy or completeness of the information provided nor do they guarantee any specific results from such use of information.