Archives April 2025

As the complexities of international trade and the global supply chain increase, manufacturers must navigate a maze of geopolitical disruptions, regulatory challenges, currency fluctuations and rising costs.

A 2024 Customs Support survey of 33 leading logistics service providers (LSP) and goods owners (GO) found that 51% of businesses have been affected by global shocks such as the Suez Canal blockage and the war in Ukraine.

Additionally, 42% of companies have had to address challenges arising from sanctions against Russia, including increased compliance risks and higher costs when working with international suppliers. Nearly half (45%) of companies surveyed needed specialized expertise to help ensure compliance with local and international customs regulations and deal with stricter environmental regulations.

Cross-border payments and manufacturing

Cross-border payments are financial transactions that occur between parties located in different countries. These transactions involve the transfer of funds or assets from one country to another and can be initiated by individuals or businesses.

For manufacturers, cross-border payments are a crucial aspect of international trade, enabling them to import raw materials and export finished goods. Efficient cross-border payments ensure that manufacturers maintain smooth operations, manage their supply chains effectively and fulfill orders from customers around the world.

Key cross-border payments challenges for the manufacturing sector

With ever-changing regulations and ongoing trade disruptions, manufacturing businesses need efficient, secure and cost-effective payment solutions to ensure smooth operations. Finding a reliable partner to streamline cross-border payments is essential.

One of the most significant issues is foreign exchange (FX) volatility and currency risk. Adverse movements in the relative valuation of money can erode growth plans or increase costs unexpectedly. Delays in processing payments also can negatively impact production schedules, customer satisfaction and overall operational efficiency. Not to mention businesses must also consider hidden transactions, exchange and processing fees.

Careful planning and verification of details before sending payments are crucial to ensure accuracy and efficiency, especially in the face of FX volatility and currency risk.

Plus, regulations are constantly changing, forcing businesses to stay ahead of the curve to avoid fines or penalties due to noncompliance. Without a streamlined process to coordinate differing methods and suppliers, manufacturers can face costly inefficiencies and errors.

Making cross-border payments work for manufacturers

Global payment solutions, offer by providers such as Convera, offer risk management tools that allow businesses to lock in exchange rates and protect themselves from unexpected fluctuations*. These tools, including forward contracts and FX options, can help businesses mitigate risk and manage costs in a volatile global market.

Manufacturers mitigating risk with Convera: Melecs and Mecatherm

Melecs is an international leader in automotive electronics, that turned to tailored FX risk management strategies developed in collaboration with Convera to combat the impact of currency fluctuations on its global operations.

“Convera has helped us develop a much more strategic and proactive approach to currency hedging, which has ultimately helped us reduce our FX risk and consequently protect our margins,” says Ernst Mayrhofer, former CFO and co-owner of Melecs.

With Convera, Melecs reduced the FX fluctuation range in its balance sheet from approximately 5% of the currency requirement to around 1-2%.

Similarly, Mechatherm, a global manufacturer of industrial baking equipment, utilized Convera’s FX hedging expertise to bolster its export-centered business.

“Our business growth was very restricted by our bank’s policies on currency transactions, and I also can’t believe how much time I used to spend online watching currency movements to safeguard our profit margins. Having a currency specialist partner has made life so much easier,” says Alan Burrows, Managing Director of Mechatherm.

Leveraging Convera’s support, Mechatherm gained the ability to hedge much larger amounts, without depositing funds in a security account, making their cashflow much more fluid.

Beyond tailor-made FX risk strategies

Convera can boost manufacturers’ efficiency in other ways too. Another essential factor when managing international payments is speed and reliability. Convera can process payments quickly and ensure timely transfers to maintain operational efficiency while reducing the risk of supply chain delays caused by slow payments.

Moreover, specialists like Convera can empower businesses to make local currency payments. This delivers savings on transaction fees and means you know the true cost of your payment from the outset – no surprise exchange rates. Local currency payments also benefit the recipient as they avoid conversion fees and the risk of exchange rate fluctuations. Some suppliers may be willing to lower their invoice if a business offers to pay in local currency.

When evaluating payment providers, finding one that offers clear, upfront pricing, without hidden fees, is crucial. Transparent partners like Convera reveal the true cost of cross-border transactions, optimizing payment strategies.

Local and international regulatory compliance is another key concern. Manufacturers should look for a cross-border payment provider with extensive regulatory and compliance expertise. Convera offers built-in compliance checks and risk monitoring to help businesses stay on top of the latest rules and sanctions.

For businesses managing payments with multiple suppliers across different countries and currencies, a centralized payment platform can greatly simplify the process. Convera offers streamlined integration with accounting systems and enterprise resource planning (ERP) software to manage payment flows in over 140 currencies, providing real-time flexibility while reducing the administrative burden.

How cross-border payments can enhance manufacturing for years to come

The digitalization of cross-border payments is transforming how businesses — including manufacturing companies — make international transactions. New technologies, such as blockchain and artificial intelligence (AI), are being applied to cross-border payments to make them faster, cheaper and more secure.

For example, some payment processors are using blockchain to enable real-time cross-border payments, while others are using AI to detect and prevent fraud. By embracing these innovations, manufacturers can streamline their payment processes, reduce costs and enhance the overall security of their international transactions.

Innovations in blockchain networks, such as real-time payment rails and distributed ledger technology, are poised to transform the cross-border payments landscape. These advances will allow manufacturers to access working capital more quickly and maintain transparent, immutable ledgers that enhance security and improve the efficiency of cross-border payments.

Multi-currency digital wallets are another promising development as they allow businesses to hold, send and receive payments in multiple currencies, often at more favorable exchange rates.

The integration of AI and machine learning into payment solutions is also on the horizon, promising more security and efficiency with optimized payment routing, fraud detection and real-time risk management.

As emerging markets continue to grow, fintech companies are increasingly focused on offering low-cost, immediate payment solutions that facilitate international trade and promote financial inclusion. Manufacturers looking to expand into new regions will benefit from such innovations, allowing them to access previously untapped markets and strengthen their global reach.

Overcoming manufacturing B2B payment challenges with Convera

By partnering with the right provider, such as Convera, manufacturers can meet the multifaceted challenges of an evolving financial world and ensure that their international operations run smoothly, securely and cost-effectively.

Convera provides automated and comprehensive tools to streamline payments, limit risks and help manage fluctuations in volatile currency markets across 200 countries and territories. From developing a powerful FX hedging strategy to lowering costs, entering new markets and more, contact us to discover how Convera can help your manufacturing business.

Want more insights on the topics shaping the future of cross-border payments? Tune in to Converge, with new episodes every Wednesday.

Plus, register for the Daily Market Update to get the latest currency news and FX analysis from our experts directly to your inbox.

One of PepsiCo’s (PEP) bigger believers has “blinked,” downgrading the soda-and-snack maker’s shares. 

Bank of America’s research team could no longer find reasons to support its “buy” rating, analysts wrote in a research note Tuesday. They slashed their price target from $185 to $155, citing market share losses in the company’s North American drink business and snack unit, Frito-Lay; the old target was one of the highest tracked by Visible Alpha.

“After having been asked repeatedly by investors since the beginning of the year ‘why are you still a buy on [Pepsi]?’ we have run out of answers and are downgrading to Neutral,” the note said. The team’s new price target is about 6% above where shares closed Monday, but 4% below the mean as tracked by VisibleAlpha.

Pepsi shares slipped 3.5% Tuesday to around $143, putting them down about 15% over the past 12 months.

Frito-Lay raised prices on products, which include Lay’s, Doritos and Cheetos, beyond wage growth, leading to fewer sales by volume, Bank of America said. Snack sales have slowed as working-class consumers cut back on spending at convenience stores and gas stations, the note said.

Pepsi’s drink list, which includes Pepsi, Mountain Dew and Gatorade, hasn’t adapted with changing tastes, the note said. The company hasn’t made a “serious entry” in the flavored carbonated soft drink and energy drink categories or gained traction in the low-sugar space, the analysts said. (Pepsi recently announced plans to buy the probiotic soda brand, Poppi, which has less sugar than traditional sodas.)

“These are large and powerful brand franchises which are ultimately ‘turnable’; doing so under current market conditions however will be a steep climb,” the note said.

You’re discussing a recent market dip in a social media investment forum when a message arrives. Someone claiming to represent a famous investor such as Bill Ackman or Cathie Wood has noticed your comments and offers to include you in an exclusive investment group where they trade tips on accumulating extraordinary returns. Their profile looks legit, complete with professional credentials and up-to-date market analysis. Soon, you’re in a private WhatsApp group with other “successful investors,” feeling like you’ve been specially selected for an insider opportunity.

However, it’s all part of an elaborate scam the Financial Industry Regulatory Authority (FINRA) says has been exploding across digital platforms.

Investment Scams Succeed More Now, Despite Warnings

According to the FTC, Americans lost $5.7 billion in 2024 to investment scams, a 24% increase from the previous year and a 50% jump over two years. Most concerning is that scammers are becoming even more effective. The percentage of people who reported losing money to fraud jumped dramatically, from 27% in 2023 to 38% in 2024, about a 40% increase in the success rate for scammers.

Thus, despite officials and financial experts warning numerous times about ID theft and fraud, scam artists have only become more successful in recent years. Marti DeLiema, assistant research professor at the University of Minnesota, Twin Cities, told a FINRA roundtable on fraud that she and her colleagues have found that most educational initiatives can only have so much impact. “Maybe the biggest limitation of consumer protection education is that it has … short-term effects,” she said.

One reason is simply that scam artists aren’t sitting still as people are educated about the previous generation of scams. “Fraud tactics are constantly changing,” Duygu Başaran Şahin, a researcher at the RAND Center for the Study of Aging, said in the same FINRA discussion. But there’s also something counterintuitive at work: “People with higher financial literacy and with more education were more likely to engage with scammers,” he said.

Also, according to the FTC, contrary to stereotypes, young people reported losing money to fraud more often than older people—44% were 20-29 years old, while only 24% were 70-79 years old.

Even experienced investors with market knowledge are often duped by the increasingly sophisticated techniques scammers employ. The examples abound: A construction company owner who regularly followed market trends losing half his savings, a Nashville couple with investment experience getting taken for $1.3 million. A February 2025 survey of 2,000 high-net-worth individuals by Saltus in the U.K. found that a third (33%) had been victims of fraud and other cybercrime.

How Wall Street Guru Scams Operate

So, it’s not just the elderly, naive, or inexperienced who are taken in. What’s more, guru impersonation scams are often as carefully staged as any Broadway production. The first step typically involves identity theft, as scammers create convincing online impersonations of well-known financial figures like Bill Ackman, Cathie Wood, or even Warren Buffett. These fake profiles appear on platforms where potential victims already spend time discussing investments. The scammers might begin to engage the target by commenting on market trends or offering general advice.

Once they’ve established basic credibility, scammers move the conversation to private messaging groups on platforms like WhatsApp or Telegram. Once there, the targets witness what appears to be a community of successful investors sharing tips on earning substantial profits. In reality, most or all of these “members” are fake accounts operated by the scammers. These manufactured success stories build a sense of FOMO (fear of missing out) that drives victims to participate, while the scammers pepper in mainstream advice to develop and keep credibility.

As trust deepens, the scam takes the exploitative turn it was always headed for. The targets are encouraged to invest in low-priced, low-volume stocks, often penny stocks, on foreign exchanges where prices are more easily manipulated. This follows the classic “pump-and-dump” pattern, where fraudsters manipulate stock prices through misleading promotional campaigns.

The Bottom Line

Investment scams continue to evolve at an alarming pace, and with the help of AI, fraudsters are becoming more sophisticated at creating their bogus scenarios, while cryptocurrencies help make their ill-gotten earnings untraceable afterward.

Meanwhile, we’re ever more accessible to them. “Fraudsters can get us with emails, texts, social media, even phone calls still 24/7,” said Gary Mottola, research director for the FINRA Foundation. “The odds [of getting duped] have increased dramatically with technology [that] the fraudsters [can use to dupe the unwitting].”

Below you’ll find featured rates available from our partners, followed by details from our ranking of the best CDs available nationwide.

Rates of 4.50% to 4.65% You Can Guarantee as Long as 2026

The nation’s leading CD rate held its ground today at 4.65%. INOVA Federal Credit Union and OMB both offer that APY for 7 months, locking in your return until this fall.

If you’d rather extend your rate lock until 2026, two top CDs pay 4.60%. Abound Credit Union offers that rate for a 10-month duration, while Vibrant Credit Union matches that APY for 13 months.

A total of 21 CDs pay at least 4.50%, with the longest term among these being 18 months. This CD is available from XCEL Federal Credit Union and will lock in your rate until October of next year.

All Federally Insured Institutions Are Equally Protected

Your deposits at any FDIC bank or NCUA credit union are federally insured, meaning you’re protected by the U.S. government in the unlikely case that the institution fails. Not only that, but the coverage is identical—deposits are insured up to $250,000 per person and per institution—no matter the size of the bank or credit union.

Consider Longer-Term CDs To Guarantee Your Rate Further Into the Future

For a rate lock you can enjoy into 2027, Lafayette Federal Credit Union is paying 4.28% APY for a full 24 months. Meanwhile, Genisys Credit Union leads the 3-year term, offering 4.32% for 30 months.

CD shoppers who want an even longer guarantee might like the leading 4-year or 5-year certificates. Vibrant Credit Union is paying 4.40% APY for 48 months, while Lafayette Federal Credit Union promises 4.28% APY for 60 months—ensuring you’d earn well above 4% all the way until 2030.

Multiyear CDs are likely smart right now, given the possibility of Fed rate cuts in 2025 and perhaps 2026. The central bank has so far lowered the federal funds rate by a full percentage point, and this year could see additional cuts. While any interest-rate reductions from the Fed will push bank APYs lower, a CD rate you secure now will be yours to enjoy until it matures.

Today’s Best CDs Still Pay Historically High Returns

It’s true that CD rates are no longer at their peak. But despite the pullback, the best CDs still offer a stellar return. October 2023 saw the best CD rates push above 6%, while the leading rate is currently down to 4.65%. Compare that to early 2022, before the Federal Reserve embarked on its fast-and-furious rate-hike campaign. The most you could earn from the very best CDs in the country then ranged from just 0.50% to 1.70% APY, depending on the term.

Jumbo CDs Top Regular CDs in 3 Terms

Jumbo CDs require much larger deposits and sometimes pay premium rates—but not always. In fact, the best jumbo CD rates right now are lower than the best standard CD rates in half the terms we track.

In the 2- and 5-year terms, Lafayette Federal Credit Union offers 4.33% APY for a jumbo CD vs. 4.28% APY (also from Lafayette!) for the highest standard rate. Meanwhile, in the 3-year term, Hughes Federal Credit Union is offering 4.34% for a 3-year jumbo CD vs. 4.32% for the highest standard rate. And among 18-month CDs, both the top standard and top jumbo CDs pay the same rate of 4.50% APY.

That makes it smart to always check both types of offerings when CD shopping. If your best rate option is a standard CD, simply open it with a jumbo-sized deposit.

Where Are CD Rates Headed in 2025?

In December, the Federal Reserve announced a third rate cut to the federal funds rate in as many meetings, reducing it a full percentage point since September. But in January and March, the central bankers declined to make further cuts to the benchmark rate.

The Fed’s three 2024 rate cuts represented a pivot from the central bank’s historic 2022–2023 rate-hike campaign, in which the committee aggressively raised interest rates to combat decades-high inflation. At its 2023 peak, the federal funds rate climbed to its highest level since 2001—and remained there for nearly 14 months.

Fed rate moves are significant to savers, as reductions to the fed funds rate push down the rates banks and credit unions are willing to pay consumers for their deposits. Both CD rates and savings account rates reflect changes to the fed funds rate.

Time will tell what exactly will happen to the federal funds rate in 2025 and 2026—and economic policies from the Trump administration have the potential to alter the Fed’s course. But with more Fed rate cuts possibly arriving this year, today’s CD rates could be the best you’ll see for some time—making now a smart time to lock in the best rate that suits your personal timeline.

Daily Rankings of the Best CDs and Savings Accounts

We update these rankings every business day to give you the best deposit rates available:

Important

Note that the “top rates” quoted here are the highest nationally available rates Investopedia has identified in its daily rate research on hundreds of banks and credit unions. This is much different than the national average, which includes all banks offering a CD with that term, including many large banks that pay a pittance in interest. Thus, the national averages are always quite low, while the top rates you can unearth by shopping around are often five, 10, or even 15 times higher.

How We Find the Best CD Rates

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs to customers nationwide and determines daily rankings of the top-paying certificates in every major term. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), the CD’s minimum initial deposit must not exceed $25,000, and any specified maximum deposit cannot be under $5,000.

Banks must be available in at least 40 states. And while some credit unions require you to donate to a specific charity or association to become a member if you don’t meet other eligibility criteria (e.g., you don’t live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.

Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist

US equities pause after rally, USD finds support

The US equities market took a breather after recent gains, while Treasuries attracted buyers as the USD maintained most of its intraday advances amid limited major headlines.

The Canadian dollar weakened after softer-than-expected CPI data, supporting expectations that the Bank of Canada will cut rates by 25bps today.

President Trump is awaiting China’s next move in trade negotiations, with the anticipated Trump-Xi phone call yet to be confirmed, suggesting that de-escalation remains distant.

US-EU trade talks are proceeding slower than planned but remain ongoing, alongside negotiations with India, Japan, and other countries.

Today’s focus in Asia will be on Chinese industrial production, retail sales, and GDP data, alongside UK CPI.

Overnight, Antipodeans were up with NZD/USD gained 0.4% and AUD/USD gained 0.3%.

USD/CNH up 0.2%, and USD/SGD was up 0.3%.

RBA minutes: Wary of further rate cuts

This morning, the minutes of the RBA’s policy meeting from March 31 to April 1, which took place right before US Liberation Day, were made public.

As a result, the possible effects of the higher-than-expected tariffs are not mentioned in the minutes.

“Weaker global demand and the possibility of trade diversion away from the US could reduce inflation in Australia, but a larger exchange rate depreciation or more substantial global supply disruptions could increase inflation,” the RBA stated, seeing two-way risks to inflation.

This supports Governor Bullock’s remarks from last week that patience is required for future rate action and for assessing supply and demand globally.

The May RBA meeting is pricing cuts of 32 basis points.

The markets will be looking to the key resistance level of 200-day EMA of 0.6414 for AUD/USD.

US Empire manufacturing exceeds expectations

In April, the US New York Fed Empire manufacturing index increased from -20 to -8.1, above the expectation of -13.5.

The underlying data indicates lower employment but increasing inflationary pressures.  In six months, the predicted prices paid increased from 58.2 to 65.6. 

Meanwhile, the anticipated six-month workforce dropped from 8.2 to 3.4.

Looking at APAC FX, USD/SGD has rebounded today from the low end of the 30-day trading range, as we’ve highlighted in yesterday’s Daily Updates.

USD/SGD is now near five-month lows. USD buyers may look to take advantage, with the next key resistance for USD/SGD at 200-day EMA of 1.3391.

Antipodeans retreats from the top end of trading range

Table: seven-day rolling currency trends and trading ranges  

Key global risk events

Calendar: 14 – 18 April

Have a question? [email protected]

*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.

Major U.S. equities declined slightly Tuesday, a reprieve from the trade-related volatility that has driven significant swings in stocks in recent weeks.

Market indexes ticked lower following rallies in the previous two sessions and despite strong earnings reports from some of the nation’s largest banks. The S&P 500 slipped 0.2%, while the Dow lost 0.4%. The Nasdaq ended Tuesday’s session with a minor loss of less than 0.1% 

Palantir Technologies (PLTR) shares surged for the second straight session, adding 6.2% on Tuesday to notch the S&P 500’s top daily performance. The push higher for Palantir stock followed reports that the North Atlantic Treaty Organization (NATO) acquired an artificial intelligence (AI) military solution developed by the big data analytic software firm.

Shares of Hewlett Packard Enterprise (HPE) gained 5.1% after Bloomberg reported that activist investor Elliott Investment Management has accumulated a position worth more than $1.5 billion in the IT services provider. People familiar with the matter told Investopedia that Elliott intends to engage with HPE’s leadership on potential steps to boost the tech company’s value.

According to The Wall Street Journal, Netflix (NFLX) executives outlined a set of optimistic objectives at a business review meeting in March. The targets include doubling the company’s revenue by 2030 and achieving a $1 trillion market capitalization. Netflix shares jumped 4.8% ahead of the streaming giant’s quarterly earnings report, which is set to be released Thursday afternoon.

Shares of Albemarle (ALB), the world’s largest lithium producer, dropped 5.9%, falling the most of any S&P 500 constituent. The move lower came after several research firms reduced their price targets on the stock. Analysts pointed to numerous factors behind more muted forecasts for Albemarle, including the potential for trade tensions to weigh on global sales in the automotive sector, which could result in sustained pressure on prices for battery components.   

Bank of America expressed a cautious view of the chemical sector, pointing to softness in cyclical demand and headwinds related to global trade. Analysts indicated that these factors are contributing to lower levels of confidence around upcoming earnings estimates. BofA downgraded Dow (DOW) stock to “underperform” from “buy,” and shares of the chemicals giant lost 4.0% following the double downgrade.

Shares of Molina Healthcare (MOH) sank 3.8% after Baird analysts downgraded the stock to “neutral” from “outperform.” According to the analyst team, companies in the managed care and health care facilities industries could be unlikely to increase their guidance in the near term given policy uncertainties related to Medicare Part D programs.

United Airlines (UAL) reported it swung to a profit in the first quarter as revenue hit a record high, sending shares surging in extended trading Tuesday.

The Chicago-based carrier posted first-quarter revenue of $13.2 billion, up 5% year-over-year and above the analyst consensus from Visible Alpha. Adjusted net income of $302 million, or 91 cents per share, compared to a loss of $50 million, or 15 cents per share, a year earlier, and also topped Wall Street’s estimates. 

United shares jumped nearly 7% in after-hours trading. The stock has lost nearly a third of its value so far in 2025 through Tuesday’s close. 

United Says It Expects ‘Resilient’ Earnings in Q2

The results come amid an uncertain economic environment for airlines. Last week, Visual Approach Analytics warned that air travel could face “demand destruction” as a result of the Trump administration’s tariff policies, and rival carrier Delta (DAL) withdrew its full-year outlook, citing “current uncertainty.”

Looking ahead, United said it expects “resilient earnings” in the second quarter and full fiscal year, despite macroeconomic challenges. The airline said it plans to reduce off-peak flying on lower-demand days.

Shares of French luxury conglomerate LVMH sank Tuesday after the company reported a decline in sales, and the Louis Vuitton parent lost its title as the world’s most valuable luxury brand.

With the stock’s nearly 8% decline in Europe Tuesday, while luxury rival Hermès’ ticked 0.2% higher, Hermès surpassed LVMH as the world’s most valuable luxury brand by market capitalization.

Hermès has a market cap of around 246.4 billion euros ($280 billion), while LVMH’s market cap is now just below that at 244.1 billion euros, according to CNBC, based on a calculation using FactSet data. LVMH shares have lost nearly a quarter of their value since the start of the year, while Hermès shares are up just over 1%.

The parent company of Louis Vuitton, Tiffany, and dozens of other high-end brands said Monday that its first-quarter revenue declined by about 2% year-over-year.

CFO Says Company Continues To Face ‘Macro Uncertainties’

LVMH CFO Cécile Cabanis said in a Monday call with analysts that the company “continued to face macro uncertainties and lack of visibility on external factors” in the latest quarter, and suggested that while the company “didn’t see a major change in trend” yet from tariffs, that it could.

“[I]t’s true that aspirational clientele is always more vulnerable in less positive economic cycles and uncertainties, and it might have had some impact in the recent weeks,” Cabanis said, according to an AlphaSense transcript.

She said the current 90-day pause may provide space for negotiations to improve the tariffs, and that each of LVMH’s brands would likely handle the cost of tariffs in a different way.

The contradictions in market advice… the investments odds are against us… an AI tool to sidestep investment pitfalls… tomorrow’s big event with Keith Kaplan

Have you ever noticed the contradictions in our “wisest” investment slogans?

Is it…

• “Let your winners run” or “Little pigs get big, but big pigs get slaughtered”?
• “Cut your losers short” or “Time in the market beats timing the market”?
• “Be greedy when others are fearful” or “Never catch a falling knife”?
• “Stick to your investment plan” or “When the facts change, I change my mind”?

There will always be an investment maxim that, in hindsight, will have been the “wise” path you should have taken (usually quoted to you by a 23-year-old, wet-behind-the-ears recent hire at a brokerage firm).

You know that stock you sold when it fell 20%, triggering your stop-loss?

When it reverses and turns into a 300% winner, you should have known that…

“The stock market is designed to transfer money from the active to the patient,” as Warren Buffett once said.

But when you hold onto that other 20% loser in your portfolio – only for it to collapse 85% and never recover – you should have known that…

“Selling your winners and holding your losers is like cutting the flowers and watering the weeds,” as Warren Buffett once wrote.

(Technically, this comes from Peter Lynch, but Buffett liked the quote so much that he included it in one of his year-end reports to shareholders.)

Bottom line: Investing is hard.

Even if you master the emotional side of investing, the statistics of investing are brutal

About a decade ago, the research shop Longboard studied the total lifetime returns for individual U.S. stocks from 1983 through 2006.

They found that the worst-performing 6,000 stocks – which represented 75% of the stock-universe in the study – collectively had a total return of… 0%.

The best-performing 2,000 stocks – the remaining 25% – accounted for all the gains.

Here’s Longboard on the takeaway:

The conclusion is that if an investor was somehow unlucky enough to miss the 25% most profitable stocks and instead invested in the other 75% his/her total gain from 1983 to 2006 would have been 0%.

In other words, a minority of stocks are responsible for the majority of the market’s gains.

It gets worse.

The above statistic, that 75% of the stocks had a collective return of 0%, masks a darker financial reality…

While it would be unfortunate to sink your money into a stock that generated no gain, the unspoken implication is that you’d at least walk away with your original investment capital.

Not so much.

The Longboard study found that 18.5% of stocks lost at least 75% of their value.

In other words, nearly one in five stocks didn’t just return zero… they were double-digit losers that destroyed investment capital.

Here’s the breakdown:

Other studies have found similar results.

Research from economist and academic Hendrik Bessembinder that looked at equities from 1926 to 2015 concluded that about 60% of stocks were so bad that their performance was worse than one-month U.S. Treasury notes.

From Bessembinder:

It is historically the norm in the U.S. and around the world that a few top-performing companies have great influence over how the market does overall.

It’s the norm and I expect it to be the case in the future.

While it may be “the norm,” it points toward a sobering takeaway for investors…

It’s not easy finding the big winners. And if you don’t find a big winner, getting a 0% return isn’t the worst potential outcome. Instead, significant loss of your hard-earned money is a very real threat – and it happens with greater frequency than most investors realize.

By the way, it’s not just you and me who struggle with underperformance.

Here’s market analyst and author Charlie Bilello:

Most professional money managers (>90%) underperform their benchmarks over the long run.

Source: Charlie Bilello

Good thing you only pay them 1% of your entire portfolio!

(Do the quick math on that, and then imagine carrying a briefcase of cash with that amount into their office each January to pay them. Are they worth it?)

Again: Investing is hard.

Let’s consider an alternative approach

How about one that sidesteps emotions and zeroes in on fundamental strength?

Maybe one that leverages artificial intelligence to analyze volumes of historical data and millions of data points to help investors make wiser decisions?

Last week in the Digest, we highlighted “An-E,” which is short for analytical engine. This is an AI-based investment product from our corporate partner, TradeSmith.

If you’re not familiar with TradeSmith, they’re one of the most respected quant shops in our industry. They’ve spent over $19 million and over 11,000 man-hours developing their market analysis algorithms with a staff of 36 people

working on developing and maintaining their software and data systems.

Here’s Keith Kaplan, CEO of TradeSmith, with more on An-E:

A lot of today’s chatter about artificial intelligence is about “the future” – about AI’s potential, and the great things this technology can achieve.

But at TradeSmith, we don’t have to visualize too far into the future.

For us, that “future” is already here.

We’ve figured out how AI can deliver market-beating wealth – and not just on the easy, good days.

What we’ve created can help you thrive even in the worst market conditions.

And that means recognizing opportunities, yes, but also sidestepping danger. That’s where TradeSmith’s proprietary AI trading algorithm – An-E, short for analytical engine – comes in.

What sets An-E apart from the crowd is that it can forecast stock prices one month into the future… and many of these forecasts are incredibly accurate.

And it’s not just useful for stocks that are set to go up… An-E also zeroes in on the losers, too.

Over the last few days in the Digest, we’ve highlighted case studies illustrating An-E’s predictive power. Let’s look at another bearish example (An-E is equally effective in bear markets as it is in bull markets).

Back on March 6, An-E predicted that Dolby Laboratories Inc. (DLB) would suffer a 12.91% drop after 21 trading days.

The AI’s conviction level on its prediction was 63%.

After 21 trading days, DLB closed at $72.49, just above An-E’s prediction of $71.85. This put the loss at -12.13%, nearly identical to the forecasted -12.91% decline.

Tomorrow at 8 p.m. ET, Keith is holding The AI Predictive Power Event (reserve your spot instantly)

He’ll walk you through how An-E forecasts stock prices one month in advance with remarkable accuracy – and how you can use it to find high-probability trades that unlock short-term profits.

By the way, just for joining automatically, Keith will give you five of An-E’s most bearish forecasts – stocks it’s projecting to drop hard in the coming weeks.

Back to Keith:

We’re in the midst of one of the most radical economic shifts we’ve ever seen. Global trade is being rewritten, markets are in flux, and many investors are scrambling to make sense of it all.

But this is exactly the moment AI like An-E was designed for.

With markets more unpredictable than ever, “buy and hold” simply won’t cut it anymore. The smart money is learning how to move with the market’s rhythm – and AI is the key to making it possible.

If this isn’t for you, at least recognize what you’re up against

American publisher and author William Feather once wrote, “One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.”

Do you know who’s on the other end of your “astute” stock transactions?

Increasingly, it’s AI (or at least high-powered quantitative algorithms), which surpasses humans in its analytical/predictive powers by orders of magnitude.

Here’s Business Insider with how Wall Street is cannonballing into AI.

Welcome to Wall Street’s AI era…

Quant hedge funds are beginning to rely on the latest AI chips, like Nvidia’s popular GPUs, to test some of their most advanced models.

Google Cloud is helping quantitative investment firms like Two Sigma and Hudson River Trading innovate around a shortage of sought-after Nvidia AI chips.

The article goes on to highlight a long list of companies that are turning to AI in one way or another.

Can the average investor compete?

Perhaps the better question is: “Will the average investor even try to compete?”

The answer appears to be “no.”

In 2018, the Bureau of Labor Statistics surveyed how Americans spend their time. After “sleeping” and “working,” what was the most time-intensive activity for survey respondents?

Watching TV.

That clocked in at 2.84 hours per day.

And how much time, on average, was allocated to personal financial management?

0.03 hours per days… which is less than two minutes.

If you’d like to learn more about investing alongside AI rather than against AI, tomorrow’s event is for you

Here’s Keith again:

Not every chunk of bad news means doom for your portfolio. In fact, volatility like we’ve seen presents a massive opportunity.

This is AI’s time to shine.

With An-E on your side, the odds of you finding more winners and avoiding more losers is higher than before.

Join me tomorrow at 8 p.m. Eastern at The AI Predictive Power Event by signing up here automatically… and you’ll discover how.

Whether you’re playing offense by targeting winners or defense by avoiding losers, An-E gives you the clarity you need when it matters most.

To reserve your seat, just click here to instantly reserve your spot and we’ll see you there.

So, what’s the best way to end today’s Digest?

Clearly, with yet another investing quote – but this one might be the wisest of all.

From author, asset manager, and trader Andreas Clenow:

Beware of trading quotes.

Have a good evening,

Jeff Remsburg

The full article continues below these offers from our partners.

A Dramatic and Unexpected Week for Treasury Yields and Mortgage Rates

Mortgage rates are notoriously difficult to predict, as they’re determined by a complex interaction of various macroeconomic and industry factors. However, the movement of one particular metric, the 10-year U.S. Treasury yield, can generally be relied on as a direct precursor to movement in fixed mortgage rates.

When President Trump unveiled stiffer-than-expected global tariffs on April 2, the stock market plunged. And per conventional market logic, the bond market moved the other way—sending U.S. Treasury prices higher and yields lower (bond prices and yields move in opposite directions).

When the 10-year Treasury yield falls, mortgage rates typically decline as well. And that’s what we saw for the first two days after Trump’s announcement, which occurred on a Wednesday afternoon.

But by the following Monday, Treasury yields abruptly reversed course. And they didn’t stop for five days. By the end of last week, the 10-year Treasury yield had surged an eye-popping 47 basis points. It was the biggest weekly increase since the financial crisis of 2008.

This was terrible news for house hunters waiting to lock in a more affordable mortgage rate. As recently as early March, the 30-year mortgage rate average clocked in at a four-month low of 6.50%. But after rising 44 basis points last week, Friday’s flagship mortgage average had shot up to 7.14%. It was the largest Friday-to-Friday increase in almost three years.

How Experts Explain the Bond Market Surprise

Many financial experts have been scratching their heads about the dramatic turn of events for Treasury yields, as the stock market continued tumbling through last Tuesday (before beginning a slow recovery Wednesday). What caused bond prices to sink at the same time that the stock market was also still declining?

One theory is that investors predict tariff-triggered trade wars will push inflation higher by way of more expensive consumer goods. If inflation rises, that could force the Federal Reserve to keep interest rates high for longer. And that, in turn, makes locking in today’s Treasury rates less appealing—driving their price down.

Another top theory is that Trump’s stricter-than-expected global tariffs could cause foreign governments to retaliate by dumping their U.S. bonds. Or even aside from retaliation, countries may opt to buy fewer new U.S. bonds going forward. In both cases, this could drive U.S. bond prices lower.

In all scenarios right now, the dominant theme is “uncertainty”. With it unclear which countries will retaliate, which will negotiate, and which tariffs President Trump may choose to retract or soften—and, as a result, how inflation and economic growth will be impacted—markets and the Federal Reserve are in a state of limbo awaiting greater market clarity. The Fed next meets on May 6–7, and at this time, interest rate traders have priced in a greater than 80% probability that the central bankers will leave rates where they are.

As for mortgage rates, they have seen a slight bit of relief so far this week, with a mild drop Monday, and Tuesday rates moving lower still. But where they go from here is difficult to predict

How We Track the Best Mortgage Rates

The national and state averages cited above are provided as is via the Zillow Mortgage API, assuming a loan-to-value (LTV) ratio of 80% (i.e., a down payment of at least 20%) and an applicant credit score in the 680–739 range. The resulting rates represent what borrowers should expect when receiving quotes from lenders based on their qualifications, which may vary from advertised teaser rates. © Zillow, Inc., 2025. Use is subject to the Zillow Terms of Use.