Is Twilio a buy?

This week saw a massive dip in the stock market, but Twilio fared well. This high-growth company delivering cloud-based communications rose almost 8% yesterday. The company’s 65% year-on-year growth begs the question, is Twilio a buy?

The stock market crashed yesterday due to a mix of economic uncertainty around vaccine rollout and announcement of jobless claims in the US. .Amid the sea of red on Wall Street, Twilio climbed higher. The cloud-based communications specialist reported fourth-quarter financial results that confirm the stock is growing fast.

Twilio, Inc. (TWLO) engages in the development of communications software, cloud-based platform, and services. Revenue for the fourth quarter jumped 65% year-on-year, capping a year of 55% top-line growth for the company. Dollar-based net expansion rates of 139% for the fourth quarter and 137% for 2020 demonstrates customers are feeding more and more back into the business. The company now has over  221,000 active customer accounts, up 42,000 from a year ago.

Twilio also expects the good times to continue. It projected guidance for first-quarter sales to grow between 44% and 47%. That might seem like a slowdown, but Twilio has historically been quite conservative in its guidance.

Chart from money CNN

Twilio expects their high growth to continue with projections of Q1 sales up 44 – 47%. Considering Twilio have a history of estimating conservatively, this target will be easily achieved. As developers implement new operational standards, Twilio makes their life easier. More than 10 million developers around the world are using Twilio’s library of software to embed new means of communication within applications. Twilio’s popularity was proven with a 65% increase in revenue year-on-year (December 2020) equating to $548 million.

“Twilio’s 65% year-over-year total revenue growth in the fourth quarter continued the strength and momentum we saw throughout an outstanding year of results in which we delivered $1.76 billion in revenue,”

– CEO Jeff Lawson

“These results reinforced that we are addressing a generational opportunity, and with our acquisition of Segment and strong traction with Flex, we are building the leading customer engagement platform to improve every interaction that businesses have with their customers.”

– CEO Jeff Lawson

The Covid-19 disruption has helped Twilio grow in new areas, including telehealth and online education. Whereas, its pandemic-hit dining and ride-sharing markets are only just starting to improve. A diversified customer base has helped Twilio during the pandemic, investing more in back-office processes, sales and marketing to target new opportunities.

Last year, Twilio announced they would acquire Segment, costing $3.2 billion in stock. The move to add a customer data business will set Twilio ahead of other competing platforms. Although new integrated products are yet to be announced.

Before you invest in Twilio, you will need to open an account with a broker to manage your investments. 

Choosing the best online stock broker can make the difference from an easy and exciting new experience to  constant frustration and disappointment. Accessing financial markets through online brokers is easy and inexpensive but there are so many out there tailored to a different sort of customer so choose the right broker that will optimise your user experience and profits. 

If you’re just starting out we recommend eToro and easyMarkets for their easy to use interfaces and fee – free trading.

Should I buy or sell Twilio?

Overall, Twilio’s strong performance and high growth potential means it is a BUY. 

Chart from money CNN

Technicals show us the stock is well worth investing in with a relative strength line that has risen to record highs. A rising RS line means TWLO stock is outperforming the S&P 500 index.Overall, Twilio rates highly on both key fundamental and technical metrics. 

Price Forecast

Outlook for the first quarter sees a revenue of $526 – $536 million, well above the $487.2 million in sales analysts predicted. The median estimate after 12-months is a staggering 18.9%. But once Q1 performance is released, we can expect a positive adjustment. 

Chart from Money CNN

Twilio’s strong performance and high growth potential proves it is a strong buy. Want to start investing? We recommend eToro and easyMarkets for beginners. 

How to invest in property stocks

With the stamp duty holiday almost over and the third lockdown likely to end there is going to be some big movement in the housing market. There are some great ways to invest in the property market indirectly. Read on to get started! 

Housing Market Update

Not surprisingly there has been some changes to supply and demand of houses due to the pandemic. The highest demand change has been for properties in outer London as buyers are preferring space over location. It appears homeschooling and cold weather conditions are encouraging many people to hold off selling homes until spring, accentuating the usual seasonal trend. After three months of falling house prices in London, there has been a 3% increase in property prices from January to February. Overall, however, the average asking price for London properties has fallen by 1.1% this February compared to February 2020. 

The stamp duty holiday is soon to end leading to predictions that buyer demand will decrease as the lengthy buying process will mean missing the deadline to save up to £15,000. The stamp duty cuts have promoted a sense of urgency in the housing market, the average time to agree a sale at 57 days compared to 71 days for the previous year.

Overall, the number of new buyers has increased, despite few being able to take advantage of stamp duty cuts. With demand overpowering supply, prices are being pushed up. A massive 21% drop in sellers is likely a result of families delaying selling due to homeschooling pressures. Last year set the precedent of seeing more buyers moving to properties more suited to lockdown needs.

As property markets are open across the UK with estate agents allowing in person moving and no restrictions on moving, the market has been on the rise. Property sales in December are up 32% year-on-year based on transactions statistics from HMRC. Rightmove found asking prices had dropped 0.9% month-on-month in January but risen 3.3% year-on-year.

Housing Market Predictions

With government coronavirus financial support schemes and stamp duty cuts coming to an end it is unsure whether the increased activity in the housing market will continue. The current best guess is that house prices will level off in 2021. Rightmove predicted house prices will rise 4% over 2021 following a lull in Q2 after stamp duty cuts end. Whereas Halifax forecast house prices to fall by 2 – 5% this year and the Centre for Economics and Business Research (CEBR) predicted a fall by 5%.  Estate agents Savills and Hamptons are holding strong that house prices will stay the same, whereas Chestertons and Knight Frank predict a 1.5% and 1% rise respectively. If you think this is confusing, don’t worry we agree! Therefore unless you were planning to buy or sell anyway it is best to stay clear of investing in the house market until trends are clearer. 

The biggest tell on how house prices will perform is the state of the economy. If there is a sharp decline in the economy accompanied by a surge in unemployment then we are likely to see ‘pressure sales’. People who can no longer keep up mortgage repayments have no option but to sell their homes, and quickly. Although this crash is more than possible, support from the government and banks will more than likely prevent forced sales.

Before you invest in property stocks, you will need to open an account with a broker to manage your investments. 

Choosing the best online stock broker can make the difference from an easy and exciting new experience to  constant frustration and disappointment. Accessing financial markets through online brokers is easy and inexpensive but there are so many out there tailored to a different sort of customer so choose the right broker that will optimise your user experience and profits. 

If you’re just starting out we recommend eToro and easyMarkets for their easy to use interfaces and fee – free trading.

How to invest in property indirectly

Investing in the housing market indirectly could be very lucrative and significantly easier than investing directly. 

Real estate investment groups (REIGs) are great for people who want to own real estate but without the hassle. A REIT is created when a corporation (or trust) uses investors’ money to purchase and operate income properties.  Like regular dividend-paying stocks, REITs are a solid investment for stock market investors who want to have a regular income. 

British Land (LSE: BLND) is listed on the FTSE 100 and is a huge commercial property REIT. This £5.5bn firm owns an £11.7bn portfolio of property. This company offers a 5.3% dividend yield and currently is undervalued.

Big Yellow Group (LSE: BYG) is a FTSE 250 stock option, the company provides storage units and holds A LOT of property. The Big Yellow share price has doubled over the last five years as the business has grown rapidly.

Berkeley Group Holdings (LSE: BKG) is an upmarket homebuilder. This FTSE 100 firm focuses on London and the south east. Berkeley shares have performed strongly this year pushing the company to return £280m to shareholders each year until September 2025. Shares offer a cash-backed yield of 4.4%. 

Now we’ve provided our top housing stock options, will you be investing? We recommend eToro and easyMarkets for beginners. 

Should I buy Bumble?

Bumble shares open at $76, $33 above the IPO price. Is it a good time to buy shares in this dating app?

Shares in the dating app Bumble (BMBL) have risen 76% on their stock market entry, resulting in a valuation of £10 billion. Massive first-day trading gains are to cause a rumble with venture capitalists who argue the initial offering was under priced. 

The IPO was led by Goldman Sachs Group Inc., Citigroup Inc., Morgan Stanley and JPMorgan Chase & Co. Bumble’s shares began trading on Thursday on the Nasdaq Global Select Market under the symbol BMBL.

Bumbles History

The Texas based company was founded in 2014 by Whitney Wolf Herd, a cofounder of the rival dating app, TInder. She sued Tinder after an alleged sexual harassment case and left the company promptly after in the same year. She received a $1 million settlement from Tinder’s parent company Match Group. 

Later, in 2018, Match had filed a lawsuit against Bumble for intellectual property infringement which sparked Bumble to take out a counter-lawsuit accusing Match of fraud and theft of trade secrets. Both lawsuits were subsequently dropped.

Bumble is different to other dating apps centuring on women to make the first move. Though bumble has subsequently added features to meet new friends (Bumble BFF) and business contacts (Bumble Biz). The company has around 54 million monthly users, showing clear competition to Tinder which has 100 million users per month. 

With the pandemic going on, the online dating market has boomed as people seek alternatives to in-person dating. However, Bumble published a net loss of $84 million between February and September last year. This poses a huge question to the world of online dating, will people continue to use these services post-pandemic? 

Recently, there have been several companies that have surged after their debut on the stock market. Food-delivery company DoorDash rose 86% and Airbnb more than doubled after opening on stock markets. 2020 saw first-day rallies triple the average over the past 40 years.

Before you invest in Bumble, you will need to open an account with a broker to manage your investments. 

Choosing the best online stock broker can make the difference from an easy and exciting new experience to  constant frustration and disappointment. Accessing financial markets through online brokers is easy and inexpensive but there are so many out there tailored to a different sort of customer so choose the right broker that will optimise your user experience and profits. 

If you’re just starting out we recommend eToro and easyMarkets for their easy to use interfaces and fee – free trading.

Should I buy? 

With Bumble’s IPO price at $43 there is plenty of room for growth. Sales are predicted to expand by 20% to 2023 with a 12-13x forward sales multiple that beats TInder. But it is uncertain whether there will be as much public interest in the premium service when in-person dating picks up again post-pandemic. Market research indicates that people will adopt the new normal of online dating making it likely that most (although not all) of the business these dating apps have acquired over the pandemic will continue. 

Bumble offers a competitive advantage over other dating apps with their women first approach.

“They made the successful bet that where women are, the men will follow. And women will go where they feel comfortable and empowered,”

– Jeremy Abelson, founder of Irving Investors, who supported the IPO.

Bumble also offers services beyond dating. Bumble BFF, the friend-making part of the app, only has 9% of Bumbles total users. Competitor Ablo, owned by the Match Group has seen a continued interest in finding friends virtually so there is definitely potential to grow. 

It is often thought that investing in IPOs is risky. Lyft shares become public a few years back yet still haven’t reached the price of their IPO two years later. It is also important to consider that IPO investing favours institutional investors as these organizations are able to acquire shares before the retail market opens, giving them a distinct advantage to retail investors.

BMBL share price this week from MarketWatch

Furthermore, the digital dating sector has high competition and with Match Group forecasting a revenue below what analysts expected, the potential for growth from the new kid on the block is somewhat limited.

Normally, we would look at the stocks recent performance to judge whether it is a good stock to buy, but with Bumble trading for less than 24 hours, it’s best not to rely on this indicator!

There are currently no published analyst ratings for Bumble so it could be a big risk to buy now. 

As Bumble enters the market everyone is wondering if their IPO was undervalued. Will we see BMBL’s share price rise?  Will you be investing? We recommend eToro and easyMarkets  for beginners.

Trading 101: Penny Stocks

Why trade penny stocks? They’re cheap! To meet the criteria of being a penny stock, they have to be listed at less than $5, meaning you don’t need a lot of capital to start investing. The potential for large returns also makes penny stocks attractive to investors. 

What are Penny Stocks?

A penny stock is a stock of a small company that trades for < $5 per share, as defined by the Securities Exchange Commission (SEC). These companies are typically relatively new so don’t have a long performance record and have a small market capitalisation making them speculative investments. Most penny stocks are not always available on large exchanges like the New York Stock Exchange (NYSE), so are mainly traded via over-the-counter (OTC) transactions. 

As penny stocks are tied to small companies and are traded less frequently than most stocks they have a lack of liquidity as there is less demand for them in the markets. This means prices may not accurately reflect the market, a similar issue that some alternative investments find. Their lack of liquidity means penny stocks are considered highly speculative. Being highly speculative means both there is a high potential for profit but also a high risk of losing money with this type of investment. 

As there is a higher risk associated with penny stocks than typical stocks it is advised that you set a stop-loss order and fully understand the price you want to enter and exit the trade at. Penny stocks are high-risk investments, so while it is possible to benefit from explosive gains there is also the potential for you to lose money. 

Penny stocks are provided by small businesses as a way to get funding, usually for companies just starting out. They sell stocks at low prices and at a much lower quantity than typical stocks or blue-chip stocks. Blue-chip companies are typically well-established and financially sound as opposed to small companies that come with high financial risk. 

There are  a few reasons why penny stocks are risky:

  • Private records mean the public have a lack of information to use to consider buying penny stocks. Unlike blue-chip stocks, penny stocks are not required to file financial statements with the SEC – who regulate markets. 
  • No minimum standards means penny stocks can be listed on OTC exchanges no matter their performance. Needless to say this makes investing in penny stocks risky. 
  • Low liquidity is inherent to penny stocks as they are not traded frequently. This opens up the opportunity of fraud as traders can manipulate prices in a pump and dump. 

OTC Penny Stocks v major exchange Penny Stocks

Some penny stocks are listed on major market exchanges if they are large, but based on market capitalisation trade at < $5 per share.

Ever heard of Pink Sheets? These are the cheapest of all publicly traded stocks and are traded on the OTC market. The OTC market does not require them to comply with the safety measures and regulations that stocks listed on large echanges such as NYSE or NASDAQ require. To trade on these larger exchanges the company must present their financial history and their stock must consistently trade at above $1 per share. A company unwilling to be transparent about their finances raises a huge red flag, therefore it may be best to avoid trading OTC penny stocks. Trading on OTC markets not only has a lack of regulation but also typically has stocks with less liquidity, making them more dangerous to trade. 

We pose that investing in penny stocks listed on larger exchanges will reduce your risk a little. Penny stocks listed on larger exchanges are cheap but still provide the high potential for gains without the risk of fraud or bankruptcy. 

How to choose the best Penny Stocks?

You are fundamentally looking to invest in penny stocks that are likely to make big moves.

To find specific stocks to trade you can look for certain criteria: 

  • News presence that will likely catalyse the stock. This can be anything from earnings reports to the release of a new product.
  • Float volume under 100 million shares as this means the stock price is more open to buying pressure that can push the shares up quickly.
  • High relative volume so you know you can get rid of the stock if you want. Check pre-market volumes to ensure you have plenty of liquidity.

Before you invest in penny stocks, you will need to open an account with a broker to manage your investments. 

Choosing the best online stock broker can make the difference from an easy and exciting new experience to  constant frustration and disappointment. Accessing financial markets through online brokers is easy and inexpensive but there are so many out there tailored to a different sort of customer so choose the right broker that will optimise your user experience and profits. 

If you’re just starting out we recommend eToro and easyMarkets for their easy to use interfaces and fee – free trading.

Top Penny Stocks

Zomedica (ZOM) are in the veterinary industry and have developed a product called Truforma which has gained a lot of interest. The stock will pick up speed accordingly so get in there quick. Currently trading at $1.90 per share.

Cerebain Biotech (CBBT) develops ground-breaking treatments for Alzheimers, a condition that is becoming more and more prevalent. They have an upcoming merger with PKG which will likely push the stock high. Currently trading at $0.20 per share.

ToughBuilt Industries, Inc. (TBLT) have been rising fast with sales increasing 30% over just five years. After a recent rise, we may see a dip soon – presenting a good opportunity to buy. Currently trading at $1.50 per share.

Gold Resource Corporation (GORO) works in gold and silver production. Due to recent uncertainty with the gold market, this penny stock is an absolute bargain at just $3.00 per share. With commodity prices set to rise over 2021, this may be a great opportunity for profit compared to larger gold companies on the market. 

Arcadia Biosciences, Inc. (RKDA) manufactures and sells agricultural chemicals and technologies. Stock prices dropped sharply after a direct offering scared investors into a sell-off with fears that the company may be on the brink of dilution. If the stock rises past $3.50 (currently at $3.20) then the rise should continue through 2021.

Now you know that penny stocks can get you high potential gains but high potential losses. Will you be investing? We recommend eToro and easyMarkets for beginners. 

Should I buy or should I Shell?

Shell has taken its first ever annual loss as pressures to commit to a greener future become too much. The company revenues are down 48% year-on-year due to lower oil prices, but does this dip present an opportunity to buy?

The company lost £16 billion in 2020 following a crash in crude oil prices. Depreciation in the value of oilfields and increasing costs to adapt to a less-polluting energy system have led to profits down a colossal 71% this year. With news that the Anglo-Dutch supermajor saw an 87% loss in the final quarter, no wonder share prices have dropped. 

Chart from Hargreaves Lansdown

Royal Dutch Shell (RDS) has struggled to keep afloat during the pandemic. For the first time this century the company was forced to slash its dividend and its workforce to fight off debt that currently stands at £47 billion. The company hopes that reducing its debt by almost 20% will set a solid entry point for 2021 and allow them to reinstate their dividend value this quarter. Shell’s stock has halved over the past five years, and yet the yield is currently only around 3.9% as a result of their dividend cut. Their yield is much lower than competitors Total and Chevron, which have continued to offer generous dividends despite hits to the market.

Shell manages the largest natural gas supply in the world yet refuses to embrace the switch to a renewable energy that has led other companies, such as SolarEdge to thrive. The Royal Dutch Shell plc is a company based in the Netherlands that explores for crude oil and natural gas worldwide and hope to reach net zero carbon emissions by 2050. But if they fail to embrace the green energy revolution, will they survive?

eToro and easyMarkets state that 75 % of retail investors lose their money when trading CFDs. Trading 212 state that 76 % of retail investors lose their money when trading CFDs. DeGiro provide a detailed ‘The risks of investing’ page here. You should consider whether you can afford to take the high risk of losing your money.

Before we go into whether you should buy, you will need to open an account with a broker to manage your investments. 

Choosing the best online stock broker can make the difference from an easy and exciting new experience to  constant frustration and disappointment. Accessing financial markets through online brokers is easy and inexpensive but there are so many out there tailored to a different sort of customer so choose the right broker that will optimise your user experience and profits. 

If you’re just starting out we recommend eToro and easyMarkets for their easy to use interfaces and fee -free trading!

Buy or Sell?

Overall, RDS is a BUY. Over the past month share prices have dropped 6.85% making the company’s shares on the market at a bargain price. The buy rating has been consistent over the past few months, indicating that the drop in Shell price will not last forever. Get in while you can!

Graphic from CNN Business

Price Prediction

Shell’s share price is expected to rise by 30.7% over the next 12 months following a median target of 49.0. However the price prediction is broad with a range between low and high estimates of roughly $43. 

Graphic from CNN Business

Shell has taken a turn for the worst due to pandemic and oil price drops. Yet this presents a great buying opportunity with a potential 70.7% growth following generous price forecasting. Want to start trading? We recommend eToro and easyMarkets for beginners. 

Trading 101: Dividends Stocks

Dividend stocks are a great way to get regular income from your investments. Savvy investors are always on the lookout for the best dividend stocks out there, but during these pandemic-driven economic downtimes, what are the best dividend stocks out there now?

Dividends have fallen the greatest since WWII according to Link Group who say British dividend payouts will not go back to pre-covid times for around five years. Last year saw a 44% loss in dividend payout equating to £40 billion in income. So although there is a more frugal market, there is still lots of opportunity to get regular income from your dividends. 

Why invest in dividend stocks?

Dividend stocks are an opportunity to get regular income from your investments. Dividend stocks are companies that pay out a portion of their earnings to a class of shareholders on a regular basis. This way you can get a little back as the stock grows over time. Most people who invest in dividend stocks aim to hold them over the long-term, therefore paying attention to strong and stable growth rather than temporary erratic shifts in price will direct you to the most sustainable dividend-based income.

The best dividend stocks are typically well-established companies with a good history of giving back to shareholders. Companies with a history of strong fundamentals, increasing dividend payouts and a bullish trend often provide the best dividend income. 

To get the biggest returns on your investment, holding stocks for a long time and reinvesting the dividends you receive from them will sustain growth.

What to look out for for a high dividend yield

Often stocks that are falling will increase their dividend yield to compensate, so this is something to look out for. 

Also look for:

  • A low payout ratio of 60% or less indicates a dividend is sustainable. The payout ratio is the dividend per share divided by the earnings per share. 
  • A strong history of raising dividend value even during tough economic times like the recession or COVID pandemic.
  • Stable growth of revenue and earnings as this indicates a safe place to invest in long-term. 
  • Having a competitive advantage that will last, such as a powerful brand name is a good indicator the company will succeed long-term. 

How to trade dividend stocks?

Before we go into which dividend stocks you should buy, you will need to open an account with a broker to manage your investments. 

eToro and easyMarkets state that 75 % of retail investors lose their money when trading CFDs. Trading 212 state that 76 % of retail investors lose their money when trading CFDs. DeGiro provide a detailed ‘The risks of investing’ page here. You should consider whether you can afford to take the high risk of losing your money.

Choosing the best online stock broker can make the difference from an easy and exciting new experience to  constant frustration and disappointment. Accessing financial markets through online brokers is easy and inexpensive but there are so many out there tailored to a different sort of customer so choose the right broker that will optimise your user experience and profits. 

If you’re just starting out we recommend eToro and easyMarkets for their easy to use interfaces and fee -free trading!

We recommend eToro and easyMarkets for beginners. 

Top dividend stocks

Proctor & Gamble (PG) is the creme de la creme of consumer product manufacturing. They have a great history of giving dividends: over the past 63 years the company has increased its payout each year! This is a great stock to invest in due to its stability, the products they produce are essentials so will continue to do well no matter how the economy performs. 

AT&T (T) is a telecom giant and like P&G has increased its dividend every year for around half a century. AT&T’s recent moves to enter the entertainment industry could provide a powerful growth move. 

Chevron Corp. (CVX) has an annual yield of 4% which greatly beats the average yield of the S&P 500 (1.9%). Their quarterly payout is generous at $1.19 per share. 

Price history from

QUALCOMM Incorporated (QCOM) is a leader in the semiconductor and 5G industry. This stock has a strong history of buying signals meaning it is on an upward trajectory. It is even showing a 11.3% monthly gain. Institutional investors have done a lot of buying over the past year (green bars), indicating this stock is on the rise. 

Currently QUALCOMM are giving out $0.65 dividend per share. 

International Business Machines Corp. (IBM) have one of the highest dividend payouts out there at $1.63 per share and a fairly good dividend yield of 5.14%. They have also proven they can ride out the pandemic. 

Microsoft (MSFT), one of the largest companies in the world, has been increasing its subscription-based revenue streams which is great for dividend investors! Currently the dividend yield is around 0.97% equating to an annual dividend of $2.24 per share.

M&G (MNG) are a British investment company that was only listed on the LSE in 2019, meaning it is fresh to the dividend game. With a dividend amount per share shanding at almost 11% for 2020, this company should surely be on your watch list. 

Price history from

UnitedHealth Group Incorporated (UNH) are a leading health insurance company. Although their month’s performance is only slightly positive at 0.54%, there is a three-year dividend growth rate of 18.9% and a current dividend per share of $1.25. We can also see a strong interest from institutional investors below. 

Invest in these stocks now with eToro and easyMarkets. Now you know about the top dividend stocks, take advantage of this good buying opportunity to achieve a long-term regular income. Based on high growth prospects, strong financials and generous dividend payouts investing in these top dividend stocks will give a tidy income. Kickstart your trading journey with BullBear now.

*Tax: Dividends from UK companies generally don’t have tax deducted at source, but dividends from foreign companies might – it depends on their local rules. At present, in the UK the first £2,000 of dividends is tax-free, whatever rate of tax you pay, with the excess taxed at 7.5% for basic-rate taxpayers while higher and additional rate taxpayers pay 32.5% and 38.1% respectively. Although if you get dividends from a Stocks and Shares ISA then you will not be taxed at all. 

What ISA is best for me?

ISA’s are great as they have tax benefits and are really simple to use. Thanks to the UK government, people can build up large tax-efficient sums to make their money work harder.

Individual Savings Accounts (ISAs) are open to UK residents to save and invest in a tax-efficient way. Holding investments in an ISA avoids capital gains tax and further income tax. We all want to know how we can invest our cash to get the best interest rates and incentives, so read on to find out more. 

Each year you can invest up to £20,000 in ISAs, this means you can put it all in one or split it between various types.Make the most of your money by putting it in the best-paying savings vehicle possible, and when that is maxed out, turn to the next best option. 

How to choose the best type of ISA for you

It is important to compare different types of ISA to maximise your returns and allow you to access your money as you need. Note you can invest your annual ISA allowance into one type of ISA, or split it across a combination of products upto the value of £20,000 a year. 

Consider the following when making your decision:

  • What level of risk are you comfortable with?
  • What are you saving for?
  • How long will you save or invest for?
  • What is the most efficient method of saving for your goals?

Lifetime ISA

Lifetime ISAs can be utilized by potential first-time buyers or to save for retirement. Anyone aged 18 – 39 can open a LISA and save up to £4,000 of tax a year and get a generous 25% bonus from the government on top! If you made the most of this type of ISA by saving the max £4,000, you will actually have £5,000. Then when you want to buy your first home you can use your accrued money towards a deposit of a property of up to £450,000 or for your retirement. 

Sounds too good to be true right? Many people are often capped fairly early on in their savings career. Also, it is capped at entering an initial sum of £1,000 and then £200 a month. Another thing you may want to consider is if your first property is likely to be less than £450,000, while for most parts of the UK this wouldn’t cross your mind, but if you live in a big city and are looking for a sizable or central location property, it is definitely worth a few minutes to consider. 

Does this sound familiar? Well the Help to Buy ISA aimed at first-time buyers is a similar set-up, although they are being phased out by the government so you can no longer apply for one of these. 

Cash ISA

A Cash ISA works similarly to a traditional savings account, as it lets you save money and pays you interest. The difference is that a Cash ISA doesn’t tax your interest.

There are two main types of cash ISA. A fixed-rate cash ISA is essentially a savings account where the interest isn’t taxed and the interest is a fixed number and requires your cash to be tied up for a certain number of years (usually 5). If you are over 16 you can put up to £20,000 in each tax year and your gains will be free of tax thereafter. Whereas, an easy-cash access ISA doesn’t have withdrawal restrictions, freeing up your cash to be withdrawn whenever you like. 

The average interest rates on Cash ISAs are only around 1%, so you could get better returns elsewhere. 

The biggest thing to watch out for is checking inflation doesn’t outpace the interest rate of your Cash ISA, as this would produce a small loss. If your aim is to grow your savings then this is something to 100% avoid. 

Stocks and Shares ISA
Here you can make the most of your £20,000 tax-free ISA allowance with a potentially higher rate of return than other types of ISA. A Stocks and Shares ISA is fundamentally an investment ISA as your money is invested in a range of assets like shares, bonds, properties and commodities. Again, you don’t need to pay capital gains you make on interest or dividends so is a great way to get involved with investing tax-free. 

There are a range of plans out there which range from low to high risk (although they are all fairly safe). If you invested an initial sum of £5,000 and then £200 each month for 5 years your investment could grow to almost £22,000 on an 8% annual growth rate. The stock market is volatile in the short-term, but tends to outperform cash in the long-term, so most financial advisors recommend investing for at least five years.

A typical annual return is 6-7% , although returns can go down as can they go up. It is worthy to note this ISA might not be all that beneficial as you can already earn tax-free capital gains up to the Annual Exempt Amount of £12,300 and a Dividend Allowance of £2,000. So it is only worth opening up a Stocks and Shares ISA if you exceed these allowances. 

You should be aware of the risk with a Stocks and Shares ISA that there is no guaranteed return and there is the possibility that the value of your investments could go down. When comparing the higher returns of a Stocks and Shares ISA to a Cash ISA, it may be worth it. To mitigate some risk you can invest over the long-term as this typically smooths the ups and downs of the market and allows your money to compound. Note also there are fees associated with this sort of ISA.

Innovative Finance ISA

This lesser known ISA type allows you to lend money to those individuals and businesses that are approved through a peer-to-peer lending platform. This gets you a return of a fixed amount of interest which is not taxable.

This type of ISA can get you an annual return of around 8-9% but the risks are much greater than other types of ISA.

This direct lender-borrower scheme brings greater risks as borrowers can default on payments which are unable to be compensated by the Financial Services Compensation Scheme. 

Junior ISA

Junior ISAs allow you to save for your child’s future in a tax-efficient way. You can open a Junior ISA for your child anytime before they are 18 and as long as they don’t have a Child Trust Fund. You are limited to putting £9,000 in a Junior ISA each year and have the option of putting your money in a Junior Cash ISA or a Junior Stocks and Shares ISA (or both!). 

Something to remember though is your child owns the ISA, meaning they are able to withdraw money when they turn 18. However if they leave the money in the ISA it is converted to an adult ISA to continue saving. Note you can only open up one of each type throughout their childhood instead of the one per year that is allowed for adult ISAs.

HOT TIP: If you want to move your money from one ISA to a more efficient ISA make sure you transfer directly! Avoid being charged tax by withdrawing and then depositing your money through another bank account. 

Now you know all about the different types of ISA out there. What will you go for? Follow BullBear to stay up to date with the latest financial tips and tricks. 

The end of a free market? | GameStop controversy

This week drew regulatory attention as retail investors found themselves shut out of their trading platforms after the buying frenzy for GameStop and other companies such as AMC Entertainment, Koss Corp and BlackBerry. 

The public is outraged that we cannot be allowed to manage our own risk, whereas hedge funds are allowed to continue as normal. Not only can they continue actively trading whatever stocks they like, they are taking advantage of retail investors being blocked from participating in markets. Trading platforms are protecting corporate interests while compromising the ordinary people. Retail investors know there are risks involved but rules of the free market should allow each individual to make that choice. 

What is happening feels like market manipulation, but is legally justified and legitimate. Many retail investors have been forced to lose a lot of money after trading was blocked for headline companies such as GameStop and AMC Entertainment. By “protecting retail investors from high risk”, many of us have lost out, majorly. 

So what is a free market?

Institutional investors support a free market when it suits them and then turn a blind eye when regulations are put in place! In economic theory, a free market describes a system where the price of goods and services is determined by consumers on the open market. In this system supply and demand create an equilibrium that self-regulates and is devoid of any government forces. The idea is to allow the system to maintain itself without the need of a governing body. In this type of market there is no need for tariffs to restrict trade or other economic tools as economic forces can themselves as a control. 

Photo by Josie Stephens on

Why has trading been restricted?

Most brokerages have halted buying in stocks that have had major rallies this week, including GameStop and AMC Entertainment. Retail investors are left outraged as they have no opportunity to participate in these highly lucrative markets.

Shares in GameStop dropped on average 55% after blocks to buying were put in place. On Thursday, large US broker Robinhood halted buying shares of the video game retailer GameStop, cinema chain AMC and tech pioneer BlackBerry, causing a huge drop in price. GameStop was down 44% and AMC closed at a huge 57% loss.

Large hedge funds had put billions on GameStop to fall. Yet when the power of Reddit encouraged a buying frenzy that pushed share prices to over 700% in just one week, these hedge funds were losing out. 

Hedge Funds who attempted shorting GameStop thought they were guaranteed profit by betting the out-of-date gaming company would continue to fail. However, they didn’t account for the power of the people who pushed the price in the opposite direction. A lot of investors were sceptical how long this frenzy could last, but with the story gaining traction across social media the stock has skyrocketed and brought some other dying companies along for the ride. 

Amateur investors who follow the Wall Street Bets subreddit have been encouraging buying GameStop shares to push up the price. Here, common retail investors are acting together as market makers. By pushing up prices this steeply, short sellers (ie Hedge Funds) incur huge losses driving them to buy back the shares they have borrowed from other investors to prevent even greater losses. This process is known as covering. Although this saves Hedge Funds, it encourages prices to rise higher as it adds to the demand. 

So why would brokers want to manipulate markets?

Essentially they want to cover their own backs. Brokers rely on large hedge funds to supply markets with shares. As hedge funds have so much capital they can tie up a large proportion of a certain stock if they choose, which is how they can influence markets – through controlling supply. 

Also, free brokers like Robinhood and Trading212 that advocate accessible trading don’t make money off transaction fees like some brokers. Their main income is by selling data that is gathered from retail traders to big Hedge Funds. Therefore , it is in their best interests to support Hedge Funds. 

By banning buying shares of GameStop and others, these free brokerage platforms are then only allowing selling. This reduces buying pressure and then allows the price to fall as retail traders can only supply stock and no longer demand it. Overall by reducing the price, Hedge Funds don’t lose so much on their short position and brokers benefit by supporting the survival of hedge funds that might’ve otherwise gone under. 

Threatened Legal Action

There are many people campaigning for  legal action to be taken against brokerages for market manipulation – by restricting sales of particular shares. 

Founder of Robinhood (the biggest US brokerage) publicly stated they had based their decision to limit shares based on regulatory requirements. 

“We made a tough decision today to temporarily limit buying for certain securities. As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits.”

It is not just anonymous investors on Reddit who have commented on this debacle. Dave Portnoy, a high-profile amateur trader has attacked Robinhood, a platform that advocates for more accessibility on Wall Street. He tweeted

“‘Democratizing finance for all’ except when we manipulate the market, cause too many ordinary people are getting rich,” .

Analyst Neil Wilson said :

“what is so unusual is the peculiar vigilante morality of the traders pumping the stock. They seem hell-bent on taking on Wall Street, they seem to hate hedge funds and threads are peppered with insults about ‘boomer’ money.It’s a generational fight, redistributive and all about robbing the rich to give to the millennial ‘poor’.”

The public is outraged that we cannot be allowed to manage our own risk as brokers block buying certain stocks. Meanwhile Hedge Funds take this opportunity to their advantage, overpowering the market making moves of retail investors. This situation is rare but brings up some big questions about how the trading system works. If you aren’t ready to bet your money, download BullBear.

Trading 101: Bull and Bear Markets

The terms “bull” and “bear” are commonly thrown around in the investing world to describe market conditions. But how should this affect how you trade? 

These terms describe how the stock markets are doing – whether they are increasing or decreasing. It is always a great idea to see what the general markets are doing as this will impact your portfolio and give you insight on the best strategy to use. Read on to understand more about how these conditions affect how you trade. 

Bull v Bear

A bull market is a market that is rising, usually during a time of economic stability. Whereas, a bear market describes a market that is falling, that occurs when an economy is receding. 

A bull market describes a sustained increase in prices. This reflects on how investors feel the markets are going, during a bull market investors are positive the uptrend will continue long term. A bull market arises when a country’s economy is strong and there are low levels of unemployment. These conditions set a spending consensus as people are in a good economic position, in turn increasing consumer spending and pushing prices higher. 

During a bull market there is a lot of buying pressure creating a strong demand for stocks. This pushes share prices up as investors compete for the low supply of available equity. 

On the other hand, a bear market describes one that is in decline. There is also a metric to help define a true bear market. When a market has fallen over 20% from recent highs it can be described as a true bear market. Overall in a bear market, share prices fall. The economy is commonly slow or in a period of recession when a bear market occurs and is usually accompanied by high unemployment rates as companies struggle to support their workforce. People here have less disposable income and tend to be more cautious with how they use their money. Spending less reduces demand and decreases prices on stock markets. 

During a bear market there is a greater selling pressure meaning more people are selling than buying. The low demand and high supply means share prices drop. As markets fall many investors close their positions and withdraw their money as it is hard to tell where the market bottom will be. When this happens there is a high selling pressure making market prices fall even lower. This downward spiral continues until the market hits a bottom.

What does this mean for investors?

Investing in the stock market should overall post positive returns over long-term periods. This makes investing in a bear market (one that is declining) more dangerous as most stocks lose value and prices can fluctuate a lot over a small period of time. Bear markets are therefore less common and often don’t last very long. 

Bear markets over time from Investopedia

Investor sentiment will affect if a market rises or falls. In a bull market, investors are more optimistic and are looking to buy stocks in the hope to obtain profit. Whereas, during a bear market the market sentiment is negative as investors become standoffish as prices fall. This keeps money safely in bank accounts rather than invested in equity, causing the price decline to continue. 

How markets change

Certain events can give a small change in markets but it is the longer term trend that determines whether a market is bull or bear. Sometimes a market can be stagnant as it doesn’t go in either direction. Small increases and decreases would cancel out any overarching trend making an overall flat market. 

How do I take advantage of these markets?

In a bull market you can take advantage of the positive market by buying stocks before most investors catch on. Buying low and selling high will get you a tidy profit. Overall the market prices should rise so it is key to ride out any small bumps along the way. 

Whereas, in a bear market prices are consistently falling over an extended period of time.  This increases the chances of losses as even if you invest in the hopes the trend will turn, it is difficult to judge where the true bottom will be. In this situation short selling can be the best way to gain profits as you are only betting markets will fall in the short-term. 

Understanding market conditions will help you become a better trader. Using different strategies in bull or bear markets will maximise profit and protect against poor moves. If you want to understand more about market moves, download BullBear

How Reddit caused GME to explode | Stock Market News

After the Reddit group Wall Street Bets told followers to go long on GameStop (GME), the stock has been rising in a momentum bubble, gaining a massive 1,000% since last year.  The shares have gained 245% so far this year and are up a further 28% in U.S. premarket trading Monday. But it is sure to crash imminently. 

GameStop was the most watched stock in the US on Friday as profits for longs and options were the hot topic across all platforms. What is so unbelievable is the growth the stock has seen over the past few days, gaining 51.08% on Friday alone. GameStop shares were even halted twice on Friday due to the extreme price action

One redditor posted on Wall Street Bets they invested $565 last year which has grown into a phenomenal $117,110. 

So why did GameStop rocket? 

The company is a dying retailer selling gaming computers and equipment and saw this boost purely from the hype of social media players on the platform Reddit. The price of the stock is highly detached from reality, meaning this bubble has to pop sometime soon! The stock trades higher now than the peak of the business back in the 2000s. The downfall of GME happened when you could start downloading games straight to your device in 2007, making retail stores selling the physical games redundant. In the world of brick-and-mortar retail, if you don’t adapt, you don’t survive. 

GME price chart from Yahoo Finance

Starting from December, investors were betting the stock would go up and fast. This sparked a feedback loop. This process of delta hedging describes mass buying call options equalling the force of market makers, yet market makers such as the New York  Stock Exchange didn’t act on this.

GameStop added three new board members from RC Ventures on January 11th  – Alan Attal, Ryan Cohen and Jim Grube. These transfers will provide the expertise in e-commerce, online marketing, finance and strategic planning needed to revive the gaming and entertainment company.

Mr. Cohen said, “We are excited to bring our customer-obsessed mindset and technology experience to GameStop and its strategic assets. We believe the Company can enhance stockholder value by expanding the ways in which it delights customers and by becoming the ultimate destination for gamers. Alan, Jim and I are committed to working alongside our fellow directors and the management team to continue to transform GameStop. In addition, we intend to bring additional ownership perspectives to the boardroom.”

Short squeeze

Ever increasing share prices force short sellers out of their positions making them buyers in the “short squeeze”. This pushes share prices even higher, encouraging retail investors to buy in. This makes the stock price inflate so high it is almost laughable . This cycle continues as long as those who have gone short continue to be forced out of their position and those who have gone long still hold hope that stock prices will rise higher. 

While Citron Research’s $20 price target for GameStop could be correct for the long-term, the price rise from retail investors pushing GME have seen the share price rise to $60 in the short term. There simply aren’t enough shares to sell short.

There is one hedge fund that has hit the jackpot by going against the bearish consensus back in April 2020. The South Korean hedge fund, Must Asset Management, bought  4.6% stake in GameStop. The chief executive officer commented this morning “We have become less bullish and turned more neutral on GameStop. This stock will continue to be very volatile and unpredictable in the short term.”

Financial institutions were right but have majorly lost out by selling short. The hedge fund Melvin Capital Management suffered, overall being down 15% this year because of its GameStop short position. 

Is it too late to go long now?

The short answer is yes, it is too late. Looking at the fundamentals, this stock is definitely going to crash, and soon. We are unlikely to see a turnaround unless the company uses its newfound growth to invest in the business. A rumour on Reddit says GameStop could become the new centre for customizable gaming computers – making use of the remaining stores for consultations and gaming. This may just be a pie in the sky idea, whereas in reality online competitors such as and make a physical store a pretty unattractive option. After all, how many gamers would rather go to a store than order online? 

We can be reassured that GameStops success is not here to last as their market cap no way matches the height the stock price has reached. In this case the retailer was smart to buy back shares as the value has increased tenfold. It also now gives them the ability to sell their shares publicly at a much higher price. 

GameStop market cap from Seeking Alpha

What will stop GameStop rising higher?

As the price rise isn’t attached to the true value or performance of the company, the short squeeze will continue to push prices higher. Once this positive feedback loop is broken, the stock will crash. While GME stock could continue to run over $65, this will only be in the short term. 

Isn’t this market manipulation? 

The subreddit Wall Street Bets may be open to accusations of market manipulation. This could lead to Reddit itself or a regulatory agency closing the group. This is only a likely outcome if the stock crashes and a lot of investors complain, which is more than possible. This boost in small trader call buys causes gamma hedging which involves buying the underlying security to avoid risk similar to what market makers do to manipulate prices to increase. This market manipulation isn’t accountable to one individual so is likely to become a big issue. 

The GameStop bubble is a fantastic example of how retail traders can influence markets and cause growth that isn’t based on fundamentals. While some players are winners, others are losers. This just proves the risk playing with stock markets bring. Learn to trade risk-free with BullBear