Hi Reader, here's what you need to know for June 30th in 3:10 minutes.

💪 If you agree that sharing is caring, then do we have an event for you: join Pynk’s CEO and CIO for A People-Powered Investment Portfolio on Thursday, and find out how social investing could bring all sorts of new ideas and opportunities to your investing. Get your free ticket

Today's big stories

US banks have got the green light to increase their cash payouts to shareholders, and they’re wasting no time
One of the world's biggest hedge fund managers has a simple-to-use "magic formula" for how to pick stocks – Read Now
UK house prices rose at their fastest annual pace in over 17 years

Hot Banx Summer

What’s Going On Here?

The US Federal Reserve (the Fed) has finally released frustrated US banks from its lockdown on dividends and share buybacks, and they can’t wait to go wild.

What Does This Mean?

With so much uncertainty at the height of the pandemic, the Federal Reserve (the Fed) froze banks’ share buybacks and dividends to make sure they had enough cash to see them through. Fast forward to this year’s annual “stress test”, and the Fed’s been assessing how those banks would cope if – among other things – there was a severe global recession, a more than 50% drop in the stock market, and a spike in unemployment.

The Fed concluded that US banks by and large had enough money in reserve to survive – unsurprising, considering that doomsday scenario mostly played out last year. And once it gave the okay to start payouts again, there was no hanging around: Morgan Stanley and Wells Fargo quickly doubled their quarterly dividends, and announced up to $12 billion and $18 billion of share buybacks respectively.

Why Should I Care?

For markets: Value investors told ya so.
Bank stocks tend to do better when interest rates are high, since they make more money from loans than it costs them to borrow. Rock-bottom interest rates, then, have made it harder for banks to earn as much, which – along with absent payouts – might be why investors sold off their shares last year. So investors who bought back then don’t just benefit from higher cash payouts: the stocks themselves are worth a lot more since the banks’ announcements earlier this week.

For you personally: There’s still value in European banks.
European banks are doing well too, with one key index up 76% from its September lows. But that index is still below pre-pandemic levels, and banks’ earnings are looking promising: trading desks are likely benefiting from buoyant financial markets, while rising bond yields should make it more profitable for banks to lend (tweet this).

You might also like: How to pick the best of the bank stocks.

Copy to share story: https://www.finimize.com/wp/news/hot-banx-summer/

🙋 Ask a question

2. Analyst Take

A Spellbindingly Simple “Magic Formula”

What’s Going On Here?

Joel Greenblatt’s “magic formula” is well-known in investing circles.

The world-famous hedge fund manager’s stock picking strategy is easy to roll out, takes the emotion out of the equation, and it gets results. Serious results.

Back when Greenblatt published his book on this magic formula, the strategy boasted returns of around 30% a year – twice what the S&P 500 delivered over the same period.

And today, value stocks – which have been underperforming the market for the last few years – are well-placed to start delivering big returns again.

All you have to do is follow a few simple steps. First up, you need to find a –

Nice try. That’s today’s Insight: how Greenblatt’s “magic formula” works, and how you can put it into practice for yourself.

Read or listen to the Insight here

Sore Losers

What’s Going On Here?

Data out on Tuesday showed UK house prices rose at their fastest annual pace since 2004, in a frustrating game first-time buyers don’t have any chance of winning.

What Does This Mean?

UK house prices have been pushed up and up by ultra-low borrowing costs, a limited supply of properties, and a temporary tax break on purchases (that, as of Wednesday, will be phased out). Plus, Brits have had their hearts on upsizing after a year spent staring at the same four walls. So much so, in fact, that London was actually one of the weakest-performing regions as homebuyers swapped the urban hubbub for tense village politics. All in all, it’s driven the average house price to a record $353,000 – a figure which both threatens to broaden the wealth gap and leave the next generation of buyers out in the cold.

Why Should I Care?

For you personally: Won’t somebody please think of the children?
It’s true that the typical mortgage payment isn’t actually all that high compared to monthly salaries by historic standards, thanks to record-low rates. But cheap mortgage payments don’t mean much if you can’t afford somewhere in the first place, and house prices relative to average incomes are close to an all-time high. That’s making it harder than ever for prospective first-time buyers trying to get their foot on the property ladder.

Zooming out: It’s the same story all over the world.
House prices aren’t just soaring in the UK: data out last week showed average US house prices rose 24% in May compared to a year ago, hitting a record high for much the same government-stimulated reasons as the UK. And now, Bloomberg Economics has pointed out that certain indicators – like the ratio of global house prices to rent or locals’ salaries – are higher than they were even in the lead-up to the 2008 financial crisis, suggesting this bubble could be about to burst.

You might also like: Why global house prices are poised to tumble.

Copy to share story: https://www.finimize.com/wp/news/sore-losers/

🙋 Ask a question

💬 Quote of the day

“The big lesson in life, baby, is never be scared of anyone or anything.”

– Frank Sinatra (an American singer and actor)

Tweet this

Welcome to the party

The world of DeFi can feel as hard to get into as an exclusive high school party.

So it’s a good thing you know Ledger, the down-to-earth jock who wants you to be there.

With Ledger’s ParaSwap feature, you can get into the world of DeFi directly via the security of the Ledger app.

ParaSwap is a decentralized service that lets you exchange ether tokens – with no financial intermediaries involved – to make the very best trade at the very best rate.

Your private keys never leave your app, so you won’t skimp on security. And since there are no third-party transactions involved, you will skimp on fees.

That’s convenience, security, and control, all in one place: get started with Ledger today.

Try Ledger

When you support our sponsors, you support us. Thanks for that.

🎯 On Our Radar

The must-have guide to real estate investing online. Crowdstreet has what you need to invest in real estate this year – and it’s free.*
Thanks, but no thanks. The corporate-branded gin nobody asked for.
Goosebumps in New York City. A brief history of Pride.
The Stonehenge of America. Or, the world’s slowest merry-go-round
No more fitness resistance. How to love working out.

When you support our sponsors, you support us. Thanks for that.

🌏 Finimize Live

🤫 Who needs stealth?

So you’re a shareholder. You’ve made it inside, dropping from an air vent in your harness and deftly navigating your way past the alarm system. Now… very slowly… cut that harness off, drop onto the pressure pads, and make some freakin’ noise: you are a shareholder, and this is How To Drive Change From Within.

💄 How To Give Your Portfolio A Beauty Makeover: 6pm UK time, June 30th
🔥 How To Drive Change From Within: 6pm UK time, July 1st
🎙 Finimize Weekly: WISE IPO Breakdown: 6pm UK Time, July 1st
💡 Finding Wisdom In A Crowd: 2pm UK time, July 2nd
🤑 How To Bet On Bitcoin’s Next Run: 2pm UK time, July 6th
🌎 How To Profit From Diversity And Inclusion: 5pm UK time, July 7th
😎 How To Craft Your Own Trading Strategy: 6pm UK time, 8th July
💰 How To Make Crypto Work For You: 6pm UK time, July 14th
🤔 What Does Inflation Mean For Your Portfolio: 2pm UK time, July 15th
🍷 Investing In Wine: 6pm UK time, July 19th
🦄 How To Catch Your Own Unicorn: 5pm UK time, July 22nd
🌿 How To Invest In The Future Of Cannabis: 6pm UK time, July 23rd
📈 How To Protect Yourself From Rising Prices: 6pm UK time, July 26th
🤔 Are You An Investor Or A Trader?: 12pm UK time, August 25th

❤️ Share with a friend

Your Referrals: 0

Thanks for reading Reader. If you liked today's brief, we'd love for you to share it with a friend. If they sign up on your unique link, you’ll earn some sweet swag.

Share your unique link:

https://finimize.com/invite/?kid=177ZWC

You stay classy, Reader 😉

We’d love to hear your thoughts. Give feedback

Want to advertise with us too? Get in touch

Image Credits:

Image credits: happiness time - Shutterstock, zahra owji - Unsplash | Nazar Skladanyi - Shutterstock

Preferences:

Update your email or change preferences

View in browser

Unsubscribe from all Finimize Emails

😴

Crafted by Finimize Ltd. | Third Floor, 1 New Fetter Lane, London, EC4A 1AN, UK.

All content provided by Finimize Ltd. is for informational and educational purposes only and is not meant to represent trade or investment recommendations. You signed up to this mailing list at finimize.com or through one of our partners. © Finimize 2021

Finimize - 💵 Banks are throwing cash at you

Today's big stories

Hot Banx Summer

What’s Going On Here?

What Does This Mean?

Why Should I Care?

A Spellbindingly Simple “Magic Formula”

Sore Losers

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Welcome to the party

🤫 Who needs stealth?

Older messages

🍑 Has bitcoin bottomed?

🇺🇸 Nike bless America

👻 Buy a house... if you dare

🌎 EVs are taking over the world

😓 Soho House needs this IPO

You Might Also Like

🇺🇸 US inflation rose

Don’t think you can afford life insurance?

What are you hiding Elon?? (Tesla’s secret 69% dividend)

Giving thanks for inflation, Paul Mescal and more

💚 Holding space for career pivots

Harry's Take 11-27-24 Michael Saylor Has Seen an Impressive Learning Curve Playing Bitcoin at MicroStrategy!

The heterogenous effects of carbon pricing: macro and micro evidence

💉 A slimming proposal

Earn higher APY with a short-term CD

Do You Expect to Rely on Social Security?