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Stock of the Week

Stock of the Week

19 Dec 2024 - Investing

This is the sixth Stock of the Week post, for the week of December 15, 2024. In my Stock of the Week posts, I discuss a security (stock or ETF) that I am currently buying or selling, and will explain my rationale. These are trades I am personally making, so you will either make money with me or lose money with me by entering these trades (ideally the former). Financial Disclaimer

Stock of the Week

This is a great time for another Stock of the Week post. Most of the market is down today and yesterday due to the Federal Reserve projecting fewer interest rate cuts for 2025 as well as projecting an increase in inflation at 2.5%. This caused many investors to sell their securities, removing their debt and hopefully taking profits. This looks like a prime buying opportunity to me, a chance to buy more dividend paying stocks and ETF’s on sale as we wait for the prices to rebound.

While I did recommend the ETF $CONY last week due to the rising value of Bitcoin, this week I will recommend a similar ETF for the same reason - $MSTY. $MSTY represents the YieldMax MSTR Option income Strategy ETF This ETF is similar to $CONY in that it is an actively managed fund that does not invest directly in its underlying (MSTR in this case), but instead seeks to generate income by selling/writing call options.

Following the election win of Donald Trump, the most well known cryptocurrency Bitcoin rose above $80,000 for the first time ever, finally rising over $100,000 on December 5. And MicroStrategy (MSTR) has been buying Bitcoin like crazy, beginning in 2020 as a hedge against inflation, and is now the largest corporate holder of the cryptocurrency. It also just bought another $1.5 billion of Bitcoin before being added to the Nasdaq 100 Index on December 23. The company now owns about $45 billion worth of Bitcoin.

Now lets see how this helps us. The current price of MSTY is 28.75, and pays a 110.34% annual Dividend Yield according to Nasdaq.com. It’s next Dividend Payment Date is tomorrow, and will be paying $3.0821 per share. While it is too late to buy today if we wish to get the dividend tomorrow (Ex and Record date is today), I still think we should take advantage of the current sale (down around %22 over the past 5 days) and buy another long term dividend producing ETF for our portfolio.

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