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Who we are

Updated December 4, 2023

hacking homeownership + every kid gets a portfolio?

hacking homeownership + every kid gets a portfolio?

hacking homeownership + every kid gets a portfolio?

AJ Giannone, CFA

Adam Damko, CFA

The Piggy Bank


📈 Stocks surge, notching fifth consecutive week of gains.

💼Economic News

After retail sales slipped slightly in October, economists closely monitored this year's Black Friday shopping holiday. A dramatic drop in Black Friday sales could have been seen as a sign that US consumers were feeling the impact of high inflation, potentially signaling an incoming recession.

But the US notched a Black Friday online shopping record of $9.8 billion this year, exceeding economist expectations. This turnaround from last month’s sluggish retail sales could boost hopes for an economic soft landing.

 👀 What to Be on the Lookout for This Week

Keep an eye out for these economic reports:

  • Tuesday: ISM services PMI, JOLTS job openings

  • Wednesday: 30-year mortgage rate update, Q3 nonfarm productivity

  • Thursday: Initial jobless claims

  • Friday: Non-farm payrolls & unemployment rate, Michigan consumer sentiment

Here are the major companies reporting earnings this week:

  • Monday: GitLab

  • Tuesday: Dave & Buster’s, AutoZone

  • Wednesday: Campbell Soup, United Natural Foods, Chewy, C3.ai, ChargePoint, GameStop

  • Thursday: Dollar General, Lululemon, DocuSign, Broadcom

📰 In Other News

The Country’s New Biggest Delivery Co. As Amazon continues to offer 1- and 2-day delivery options, its strategy is paying off. Amazon has officially dethroned UPS as the country’s largest delivery service (not including the United States Postal Service). Amazon outperformed both UPS and FedEx in package deliveries, surpassing UPS in 2022 and previously surpassing FedEx in 2020. 

Targeted Ads Take to the Skies. Consumers have grown accustomed to seeing personalized ads on social media, internet searches, and most other platforms where data can be tracked. Now, personalized ads might be coming to a commercial flight near you. United Airlines is considering ramping up its advertising business by leveraging data from its 148 million passengers. The next time you board a flight, targeted ads could appear on your in-flight entertainment systems and the United app. 

Twitter Check-In. X, the company formerly known as Twitter, has been losing advertisers rapidly since Elon Musk assumed control of the social media platform. Most recently, major advertisers such as Apple, Disney, and Coca-Cola announced their plans to reduce ad spending on X after CEO Elon Musk endorsed an anti-Semitic tweet. This decision could result in a loss of approximately $75 million in advertising revenue for X, a company already struggling to turn a profit. In a recent interview, Musk hinted that this setback could potentially lead to the company's downfall. 

In other Elon Musk news, the Cybertruck has officially launched at a starting value of $60,990, 50% higher than the initial price estimate. Tesla hopes the truck will find success among a small, niche customer base. 

Mark Cuban Sells Mavs. Billionaire Mark Cuban plans to sell a majority stake in the Dallas Mavericks to the Adelson Family‚ owners of the Las Vegas Sands. This move will further boost the Las Vegas Sports scene, which is already hosting the next Super Bowl and the NBA’s first in-season tournament, in addition to recently hosting the F1 Vegas Grand Prix.

Charlie Munger Passes. Charlie Munger, legendary investor and Warren Buffet’s right-hand man, has passed away at 99. Munger served as Vice Chairman on the Board of Directors for Berkshire Hathaway for over 5 decades and was instrumental in turning the company into the powerhouse it is today.


🏠 Younger Generations Are Hacking Homeownership

What Is “House Hacking”?

It’s no secret that buying a home in today’s housing market can be tricky, particularly for first-time buyers.  

In October, home sales dropped 14.6% from last year, primarily due to the combination of higher home prices and mortgage rates. The double impact of high home prices and steep mortgage rates means homebuyers must be prepared to make larger down payments and monthly payments. To make homeownership more affordable, many first-time buyers are turning to a trend known as “house hacking.” 

With “house hacking”, prospective homebuyers purchase a property intending to rent out the spare space to help cover the mortgage. This helps generate an additional stream of income which can be used to offset a portion of the mortgage payment and reduce the monthly out-of-pocket burden for the homebuyer. 

House hacking may sound like a housing cheat code, but this strategy has its downsides.

Navigating the Housing Market

The popularity of house hacking has increased in recent years, mainly due to the lack of affordable starter homes. 

One of the main issues for prospective homebuyers is the median sale price for a home, which hit $413,874 in October. With a 10% down payment, homebuyers would have to pay close to $41,000 upfront — a lot more than many first-time buyers have in their savings. 

Moreover, the average rate on a 30-year fixed mortgage hit 7.22% as of November 30th. This is a significant increase from the approximately 3% average seen just a few years ago in 2021. These higher mortgage rates mean that the average homebuyer must have an annual salary of approximately $114,627 to afford a median-priced home in the US, according to estimates by Redfin. 

For high earners or those in a partnership where housing costs can be shared, purchasing a home might not pose a significant challenge. However, for individuals with modest incomes, strategies like house hacking can provide an effective means of affording a home in today's market.

Risks of House Hacking

With the right circumstances, house hacking can be the perfect solution to make homeownership more affordable. However, there are two potential roadblocks to keep in mind. 

Firstly, mortgage lenders will likely still require a sufficient down payment and verification that the borrower’s income can cover the monthly payments. If prospective homeowners are planning to rely on rental income from house hacking to meet their monthly obligations, getting approved for a mortgage may be challenging. 

Even if the borrower gets approved for the mortgage, house hacking can still be risky as there is no guarantee that the space will get rented. For these reasons, it's important to conduct diligent research on the rental market and the area before deciding to house hack. Lastly, it's important to keep in mind that renting out a property could potentially lead to violations of local ordinances or homeowners association regulations. 

House hacking can be a great strategy to make a dream home more affordable. However, it's important to conduct proper due diligence before committing to an expensive mortgage.

📈 The Plan To Get Every Child a Stock Portfolio

The New American Dream?

The traditional American Dream is the belief that anyone can achieve success in this country through hard work. A new proposal by Brad Gerstner — founder and CEO of Altimeter Capital — however, could usher in an updated version of the American Dream.  

Gerstner's vision is to level the financial playing field in America by enabling every child to become part of the investor class through his 'Invest America' plan. Under this government-funded initiative, every child born in the US would receive a $1,000 investment account. This initiative will most likely be supported by private employers looking to assist their employees. 

Gerstner is actively working to pass legislation before the 2024 presidential election, acknowledging that the legislative process is often long and challenging. In the meantime, he has shifted focus to corporate America and has already gained support from Microsoft, Dell, Uber, and Zillow.

How Does Invest America Work?

Invest America aims to establish a $1,000 brokerage account for every child born in the US. This initiative would enable children to benefit from decades of compounded growth, courtesy of the US stock market, and provide them with a built-in nest egg for retirement. 

According to CNBC’s estimate, a $1,000 account opened at age one could potentially grow to $107,000 by the time the child reaches retirement age at 67, assuming an annual growth rate of 7%. If this plan includes a 'company match' from employers — something Gerstner is advocating for — the account's value could increase to approximately $215,000 by retirement. The potential benefits could be even greater if parents contribute additional funds. 

In the short term, Gerstner is working to encourage America's largest corporations to invest $1,000 into accounts for their employees' children. So far, many companies have shown enthusiasm for this new program.

A Win-Win Scenario

If this program is approved, Invest America could present a unique win-win situation. 

Employees at major companies would have the opportunity to invest in their children’s future and help set them up for financial success. Meanwhile, companies could choose to “match” Invest America’s contributions as an employee benefit, making them more attractive to top talent and improving employee retention. 

Finally, by preparing the next generation for financial success — the nation would benefit as a whole. An entire generation would grow up with resources to invest in new businesses, real estate, the stock market, or other initiatives that could advance the country.  

Still, Invest America has its fair share of skeptics. Many people argue that the plan is inherently no different than setting up a custodial brokerage or 529 account for kids — options that already exist. Moreover, there are concerns that parents might use their children's funds for their own purposes. 

At the moment, Invest America is still in its infancy. But Gerstner is actively working to pass legislation before the next presidential election. If Invest America gains popularity, it has the potential to influence people's voting decisions next November.


Many major retailers have stated that shoplifting is at crisis-level proportions. Electronics supplier Best Buy plans to reduce shoplifting by adding more workers to stores and utilizing full-service cashier lanes. 

More than 3% of U.S. homes sold at a loss from August to October, up from 2.4% last year. The median loss was around $40,000, but in some cases, reached as high as $100,000. 

Many retailers, including Michael’s, Burlington, and HomeGoods, are seizing the opportunity to occupy vacant Bed Bath and Beyond stores. These vacancies have been helping to ease a low supply of big box locations. 

Many Americans moved out of the city during the pandemic, hoping to avoid the high cost of living. However, the isolation in certain parts of the country has led many of these movers to regret their decision. 

Just 36% of Americans believe that hard work will get you ahead in life. A similar survey in 2012 found that 53% of people believed that hard work would get them ahead.

Head to the app store and download Allio today to start building wealth your way!


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