Investing News

The U.S. stock market’s four-week winning streak came to an end last week with all major indexes wearing red. The Nasdaq, where the gains have been the most robust, fell the most—dropping more than two-and-a-half percent for the week, while the S&P 500 fell a little over 1%. Futures to start off this week are looking red too. Volatility, which had been taking a long summer snooze, woke up, and it was kind of hungry as the VIX, or volatility index, broke back above 20 for the first time in several weeks. The expiration of $2 trillion in options last Friday—obligations to either rollover existing bets that the markets will rise or fall in the near-term future—added to the volatility, and given the selloff, it looks like a lot of options traders pulled their calls—bets that the market will rise in the near-term—off the table.

Short sellers were back in late summer style too, as a basket of some of the most highly-shorted stocks tracked by Bloomberg fell 6% for the week, the best week for short sellers since March of 2020. They, apparently, don’t think that summer is over yet. Among the most shorted stocks in the market, according to S3 partners? AMC, GameStop, Beyond Meat, Canoo, Lordstown Motors, and Lucid. There’s a couple of themes going on in there.

Tough talk out of the Federal Reserve may have been behind the cold front that blew over the markets’ recent hot streak. St Louis Fed President James Bullard, one of the more hawkish members of the Federal Open Market Committee (FOMC), said the Fed will continue its aggressive rate hiking plans in the near term until inflation loses some steam. It’s not that we didn’t know that, but maybe we were lulled into the lullaby that the better-than-expected slate of good news of late may have trimmed the Fed’s talons. The FOMC will meet next on interest rates on September 21, so a lot can happen between now and then. Fed officials and top econ wonks are all gathering in Jackson Hole, Wyoming, this week, as they typically do every summer. So we’ll see if that fresh mountain air calms them down a little bit.

But rather than cast our hopes for more tempered monetary policy in the future, let’s pull out our charts and look at the recent rally with some historical perspective. As of last week, the S&P 500 had recovered half of its bear market losses for the year. According to our pal Ryan Detrick, now the chief strategist at the Carson Group, the S&P 500 has never moved back to new lows after this has happened. Never. In fact, Detrick says, a year later, the market was higher every single time, an average of 19.5% higher. Does that mean it’ll happen again this time? No, but it would be an anomaly if that didn’t happen. And, as of last Friday, more than 90% of the components in the S&P 500 were above their 50-day moving average. This isn’t something you see in bear market rallies. Also, the S&P 500 was up 12.9% for the month—that’s 21 trading days. Many of the best months in history of the S&P 500 took place during major lows or in the middle of bullish moves. That’s when we don’t sell when the market’s in a freefall. The times that didn’t pan out?—2001, when the Dotcom bubble burst, 1946—coming out of World War II, and 1973, just as a global oil crisis was spilling over into the markets.

Meet Haley Sacks

Haley Sacks, a.k.a. “Mrs. Dow Jones,” is a social media influencer in finance and the founder of the financial media company FINANCE IS COOL. Haley founded FINANCE IS COOL in 2017 to learn more about money, while providing an exciting, enjoyable platform for anyone seeking to learn about finance.

What’s in this Episode?

The financial industry, like every other industry, has its fair share of influencers—people who use their knowledge, their wit, their charm, and the power of social media to spread their messages. In the world of money, there are plenty of pretenders and plenty of contenders, but there are only a few members of the royal family of influencers—those who have been able to continue to amplify their platforms, grow their followings, and stay true to the game. Haley Sacks, a.k.a. Mrs. Dow Jones, is one of them. She was born onto the internet in 2018 with that name and with one mission: to understand and teach finance to people the way they really want to learn it. She’s bawdy, she’s brilliant, and she’s bad to the bone. And she’s our special guest this week on the Investopedia Express. Welcome, Mrs. Dow Jones. So good to have you on here.

Haley: “I love it. I’m bawdy. It’s giving a hair-body-face, but B.A.W.D.Y. I know.”

Caleb: “I know you’re a little fresh. So we had to we had to give you the props.”

Haley: “You had to bring it in—you had to be a little sassy. I’m here for it, though.”

Caleb: “I know you are. So I got to ask you, what made you do what you do?”

Haley: “It was actually not a choice, it was a calling. I was born Mrs. Dow Jones. It just took me until I was, like, 26 to realize it. Money was my biggest wound, and they always say that by leaning into your biggest weakness—that’s where the brilliance and the art comes from. And so, instead of avoiding it, I ran towards it and built an empire.”

Caleb: “You sure did.”

Haley: “I sure did.”

Caleb: “But it’s not like you built it overnight. So how did you make it happen? A lot of people want to do what you’re doing—a lot of people think they’re doing what you’re doing—but you’ve got over 400,000 people who are following you across your platforms. I’ve watched you do this over the last few years and just been fascinated with the fact that you’re manifesting it, you’re really doing it, and you’re actually helping people, to boot. But how did you actually make it happen? I don’t need every step, but I know it wasn’t easy.”

Haley: “When I started, Caleb, there were no financial influencers, so it was not intentional. It really came from my own need to learn about money, and, feeling completely disinterested in the people in the space and the vibe in this space. I was like, “Honey, I do not want to be cutting spending and investing—like all the people who are doing this seems super lame.” I will stay with the people that I admire who obviously don’t talk about money because no one talks about it in pop culture and it is considered so taboo. And then, you reach a point—I reached a point where I had my first big girl job and they asked me questions about my 401K and about health insurance.”

“And I realized in that moment, like “Whoa, I can no longer run from this.” I really do have to lean in, start to teach myself, start to teach others, use social media as my platform, as the place where I was putting these lessons, and it took off. But at that point, terms like “liquidity” and “broker“—I did not even know that they existed, and then we found our way to each other. So it was really the early days and I just remember having a moment where I thought “no one likes money, but everyone likes memes,” and so I started to make finance memes because I thought, if you’re actually an entertainer, then you can make anything entertaining.”

Caleb: “Meanwhile, this was exploding across the Internet, almost across every other category, but nobody had applied it to finance and investing the way that you have, and the way that a lot of others are doing it now. We had Kyla Scanlon on not long ago. These people are, you know, creating a new language of money, and, in doing so—and you’re part of this group—you’re teaching people sort of the new way to money, with some of the same old fundamental lessons that are important. But money’s changed, and you’ve been able to help people understand how to change with it. How have you been able to do that?”

Haley: “I mean, first off, I love those people. I think that it comes a lot from my soul. Like, I really believe that what I do is art and I’m so driven by helping people and by my community. And I remember, I’m not the person who was, you know—I always talk about the lemonade billionaire, the 11-year-old who like had her own business and was flipping it—I was not that. I was exactly who my audience is when they first find me, which is clueless, intimidated, living with fear and shame, and have sort of given up on themselves in their ability to understand and to learn this stuff. And so, I’m here to make it fun, I’m here to make it entertaining, and I’m here to teach.”

Caleb: “Well you’ve got over 400,000 people, as I said, following you across every one of your platforms, and you’re constantly interacting with them through those platforms. So what are the most common questions you keep getting asked over and over? What are the themes? Is it both a male and female audience, is it a mix? What’s the sort of the proportion of the folks who are paying attention to you and what are they looking for? What kind of answers are they seeking?”

Haley: “I would say my audience is about three-fourths women, but I got a good quarter in there that are male, which they will let you know if I ever post anything that is more female-oriented, they’re like, “Hey, what about your male followers?” Which I love, because since the beginning I’ve been like, I am not a tampon commercial. As a woman, I really hate being marketed to as a woman. So I was like, If I’m going to do this, I just want to be funny. And I believe that like, you know, humor doesn’t really have a gender. It just is. And so I really look at that as like my superpower—using humor to teach people about finance. And the questions that they have are—they run the gamut—it could be, how do I start saving? How do I start investing with such little money? Do I need a health savings account? So Roth IRA. How do I invest my 401k? You know, the things that are in the zeitgeist of this world, obviously these fundamental financial questions that are never answered in school that people get to a certain point and are really curious about.”

“And then, of course, there’s always a question about what’s going on in the media and the get-rich-quick schemes that seem to blow up every few years. So it could be NFTs; it could be, of course, crypto. Should I get this credit card; is this a good deal? And then I also do a lot of career stuff as well, because obviously you will not be able to grow wealth if you’re not making money. And women especially, historically, we do not negotiate. And so, it’s been really important to give my followers the tools to stand up for themselves in the workplace and get paid what they are worth, Caleb, which I hope you’re doing on Investopedia. I hope anyone who’s listening from Investopedia knows that Caleb just gave me a little wink and told me that you should ask for a raise.”

Caleb: (Laughs) “Thanks a lot—see me in my office. No, but these are all critical steps. And especially, you know, that the saving-investing conundrum, once people—if they can—they get on their feet and they start to earn a little bit of money like you did. They’re always asking themselves: how, where, what should I do first? Where do you fall on that—saving, investing, or does it just depend on where you are in your career, where you are in your life stage? How do you counsel folks that way?”

Haley: “I look at it as a full curriculum. I have a full university called Finance Is Cool University, and I really believe that personal finance is three basic steps. So the first step is really that moment of inventory, and of taking account of obviously what’s going on, which could be the hardest step for a lot of people. And then, when you get more sophisticated or down the rabbit hole, you learn about hedging and diversification. But really those terms apply to your personal finances, too, because I believe that you should be paying off your high interest liquid debt and saving your emergency fund at the same time. And obviously there are some people who that will not feel comfortable for, into which I say, “Okay, just save your emergency fund or just focus on your debt because they’re like so overwhelmed by one of those.” But those are really like the beginning factors, and then taking advantage of everything that the government is giving you to invest that is tax advantaged, because trust me, honey, Uncle Sam will be coming for your money. And so you’ve got to make sure that you are flying underneath that radar as much as you possibly can.”

Caleb: “Yeah, those are key lessons to learn. And a lot of folks don’t realize that until it comes time to sell, and they realize they’re going to get taxed on those gains over time. So huge stuff. Let’s talk a little bit more about the online course because this is a big deal. You’re not just giving advice over Instagram or through TikToks anymore, through Twitter. You’ve created a curriculum here. We’ve done this at Investopedia—that is not an easy thing to do. What went into that and what can folks find if they go to it right now?”

Haley: “Thank you for asking. Yeah—Finance Is Cool University is my baby. Truly, it’s been so amazing—it’s like a bestselling course on Teachable, like it’s doing so well, the results really speak for themselves. And it came from the need of, like, just having more time with my students to teach them, like ultimately Instagram, social media, YouTube—all this is so amazing—but like, really to get control of your finances from the beginning, like taking control, it really is so helpful to walk through with someone step-by-step and then give them those tools along the way, so that you can amplify their results. So I have created—I had always been using for my personal finances this sacred Google sheet called the Money Book, that had, using the 50-30-20 budget, which people are pretty familiar with. Elizabeth Warren invented it, you know. It’s 50% on needs, 30% on wants, and 20% on the future you.”

“Using that, you’re able to input your spending now, and your income, and see where you stand compared to it. And then it automatically tells you where you need to make changes and then gives you space for future months how to implement those changes. So it’s really sophisticated and cool. And you know, I’ve been talking about it on social media for a while, people are super interested in it. And I thought, well, I can’t just give them my only book. I have to show them how to use it, and like teach them these different steps. And, you know, I have this three-level financial plan that I use that I encourage people to work through before they start investing. Because, Caleb, you know better than anyone—people love to throw their money in the stock market.”

Caleb: “I know it, and you and I have talked about great mistakes that I’ve made along the way. I’m wondering, you called me out on a couple, and I’m happy to admit it. I’m terrible at it. That’s why I play it real, real slow and real boring. What about you? What investing mistakes have you made that you were able to turn into teachable moments to help you become a better investor and a better teacher?”

Haley: “Well, first, I’m the most risk averse person in the whole world, so I will have FOMO if, like, my cousin is telling me about like a crypto start up. But then I ultimately won’t do anything about it because I am scared. So that’s one thing, but also I got fully addicted to buying individual stocks at a certain point, to which I only saw losses. And I was like, “Wow, everything that I have said and that I learned actually is true.” Like, it does not serve me to buy individual stocks. I would be like, “Oh, I love this brand at the grocery store.” So I should just impulsively buy like $600 worth of shares—like I wasn’t playing with big bucks—but it just became this sort of game for me, and I was like, “Wow, I’ve got to shut this down.” So what I learned in that moment was, “Honey, you gotta diversify and you gotta put limits on how much you want to take risk with.” Because now I really only take risks with 5% of my portfolio, and I can have fun with that, and I can take those risks, but I can know, “Okay, I’m set up for the future and I really am going to be able to buy my biodynamic farm in Saint Lucia during my retirement, maybe similar.”

Caleb: “From your lips to God’s ears, I can see you there right now. We know, Hailey, that finance and pop culture are intertwined now—they weren’t as much before—but right now there’s this moment, whether it’s music, whether it’s art with NFT, whether it’s movies or TV shows. I’m wondering about your favorites. You’re right in the middle of the zeitgeist of pop culture. What are your favorites? What do you love? What are you watching and what do you recommend?”

Haley: “I’m obsessed with Loot on Apple TV with Maya Rudolph. It is basically a show about Mackenzie Bezos, but like a comedy about a billionaire’s wife who helped her husband build the company from scratch, like made the logo with him, like basement vibes, and then they become uber successful. He leaves her for a younger woman, and she is left with billions and billions of dollars, becomes one of the world’s richest women, and goes heavy into philanthropy. And it is so good. Like, I have not watched a show with this much fervor. I can’t even tell you—it’s like old school TV watching here. This is not binge watching, like I’m waiting until Friday for that new episode. I am at the edge of my seat, like I need to be in this universe. I want to rewatch an episode like you guys have got to watch Loot. It is so good. It’s like, so interesting about money, too. And I don’t want to give anything away, because obviously I am fully caught up, but it really brings up some interesting questions. Obviously we love a little industry, we love a succession vibe. And then besides that, I am a big reader.”

Caleb: “I’ve got to know—who are Mrs. Dow Jones’ greatest influencers? Who sort of do you look up to, or who have you looked up to, that has helped you sort-of position yourself where you are today?”

Haley: “Okay. The people that I look up to online are—I definitely love Katie Sorino. I think she’s fabulous. She’s like a plus sized influencer who really does her own thing, and I think that her feed really just brings so much goodness to the world. I also really love Black Hustlers Club. I don’t know if you follow them, but it’s just such inspirational content about like leveling up. I love Sarah Blakely and Jesse Itzler. They’re amazing, they really influence me. Then I also really love Ashley Longshore. She’s like this really cool artist. She lives in New Orleans, and is just an incredible painter and is so wacky and cool. So I just like following characters and people who are doing their own thing and I feel like are super happy because they’re living a life that they earned and that they really wanted, and then their dream became their reality. That’s what I like to see.”

Caleb: “You know, Hayley, that we’re a site built on our financial terms. Our dictionary is very popular among so many of our readers. I’m wondering, what is Mrs. Dow Jones’ favorite financial or investing term and why?”

Haley: “Well, my favorite one is definitely ‘dead cat bounce‘ just because it’s like, why is that a term? Well, like, who made that? Do you actually know the—do you have like a video of the day that was created?”

Caleb: “We actually have a Term of the Day that explains it. And one of the reasons—it’s sick to think about it—is that it came from World War II pilots talking about whether a cat would bounce from the height that they were flying their plane, but there’s a bunch of other explanations for how that term came about. I don’t think that term ages is very well, but I do love that you love it, and it actually is a great name for my next punk band—in case I do happen to form one—I may go with that name.”

Haley: “Does that mean that you’ve had a previous one?”

Caleb: “No, that was a reggae band in the past, but I’m moving more towards punk as I get older. Hey, I have a trivia question for you. Maybe you know this, maybe you don’t. We love Mrs. Dow Jones—we love your name. But I’m wondering how much you know about the original Mrs. Dow and Mrs. Jones from the Charles Dow and Edward Jones fame of the Dow Jones indexes?”

Haley: “Oh, how much do I know about their lady lumps, Charles, the journalist? You know, I should know more, but they’re a little bit of my competition.”

Caleb: “I did a little research, a little Internet research. Not going to say I went very deep on this because there isn’t a lot of detail on them. But in 1881, Charles Dow married Lucy Ann Russell, and her daughter by a previous marriage who became Charles Dow’s stepdaughter—that’s all we know about Lucy Russell, who became Lucy Dow. And then, in 1923, Edward Jones married Ursula Griesediek. They had four children: Anne, David—who passed away as a child—Martha, and Edward Ted Jones. And her family—Ursula’s family—happened to own breweries, including stag beer. And this is all before prohibition—this goes pretty deep here. Jones—Edward Jones—persuaded the family to take the company’s stock public. And when his father-in-law died in 1945, Jones became President and Chairman of the board of that company, and he started working at both Edward Jones the investment house, and Edward Jones the stag brewery. And I thought that was fascinating. We never hear about Mrs. Dow and Mrs. Jones, even though we have Mrs. Dow Jones here front-and-center with us right now. That’s a little Internet research for you, but I thought you might like to know that as you go on with your fame and name.”

Haley: “Thank you. I will take that to heart and I will light a candle today in their honor.”

Caleb: “Let’s celebrate the original Mrs. Dow and Mrs. Jones as we celebrate Mrs. Dow Jones. So good to have you on the Investopedia Express. We’re big fans and we just wish you all the success in the world. Thanks so much for joining us.”

Haley: “I wish you all the success and I hope that you become the next Joe Rogan.”

Term of the Week: Options Assignment

It’s terminology time. Time for us to get smart with the investing term we need to know this week. And this week’s term comes to us from Dr. Stocks, who hit us up on Instagram. The good doctor suggests “options assignment” this week, and we like that term given all the action in the options market lately. According to my favorite website, an options assignment represents the seller’s obligation to fulfill the terms of the contract by either selling or buying the underlying security at the exercise, or strike price. The corresponding seller of the option is not determined when a buyer opens an options trade, but only at the time that an option holder decides to exercise their right to buy the stock. So, an options seller with open positions is matched with the exercising buyer via an automated lottery. The randomly-selected seller is then assigned to fulfill the buyer’s rights. This is known as an options assignment.

Once assigned, the writer, or seller of the option, will have the obligation to sell if it’s a call option, or buy if it’s a put option—the designated number of shares at the agreed-upon price, the strike price. For instance, if the writer sold calls, they would be obligated to sell the stock, and the process is often referred to as having the stock ‘called away.’ For puts, the buyer of the option to sell stock puts stock shares to the writer in the form of a short sold position. Smart suggestion Dr. Stocks. Some Investopedia socks are headed your way—wear them in the operating room or when you’re trading, they’ll make you smarter. And folks, if you want to learn more about options, look up our options tutorial on Investopedia.

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