It started at my local coffee shop just a few days ago... The owner recently switched to a new Clover payment system. If you're not familiar, Clover is a point-of-sale terminal that looks like an iPad.
Editor's note: We're excited to introduce you to our newest addition today...
Vic Lederman worked at our corporate affiliate Stansberry Research for the past six years. In that role, he helped financial-newsletter legend Steve Sjuggerud with the True Wealth franchise. And he covered commercial real estate as the editor of True Wealth Real Estate.
Recently, Vic joined the Chaikin Analytics team as our editorial director.
You'll hear from Vic often in the Chaikin PowerFeed moving forward. We believe you'll appreciate his unique take on the markets, as well as his compelling analysis and delivery.
To that point, in Vic's first essay for us, he provides a "boots on the ground" look at our ever-growing "cashless" society. But that doesn't mean it's worth investing in right now...
My Local Taco Place Won't Take Cash
By Vic Lederman, editorial director, Chaikin Analytics
It started at my local coffee shop just a few days ago...
The owner recently switched to a new Clover payment system. If you're not familiar, Clover is a point-of-sale terminal that looks like an iPad.
Then, when I gave the guy at the counter my paper loyalty card, he alerted me to another change...
The loyalty program is going digital. You can download the app onto your phone if you want.
Fair enough.
Later in the day, I went to pick up my dog at the groomer. The business already had my debit card on file. So I walked in, got my dog, and walked out. Easy.
That's when I saw another new sign in the window of the taco place next door...
It's going cashless.
In other words, the taco place literally won't take cash anymore. It's not a possibility. If I want to buy a taco, I either need to use my card or the "tap to pay" option.
Now, this story is about more than just my boring experience running errands last week. The reality is simple...
America is in the process of going cashless.
So today, let's take a closer look at this massive, ongoing shift. And more importantly, let's see the Power Gauge's take on how this trend is shaping up for investors right now...
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Three years ago, USA Today tried to debunk the idea of a cashless society...
And yet, the way that Americans spend their money has changed dramatically since then...
An October 2022 study from the Pew Research Center found that 41% of Americans say they don't use cash at all in a typical week. That's up from 24% in 2015.
For folks who make $100,000 or more per year, the percentage jumped to 59%. So put simply, the most affluent members of our society don't bother much with cash these days.
But the thing is, this trend is also playing out on the lower-income side. Today, roughly 24% of folks who make less than $30,000 per year are cashless shoppers. That's up from 15% in 2015.
And perhaps most telling, the people who primarily use cash are disappearing fast. They've dropped from 24% of the population in 2015 down to 14% these days.
So it's no surprise that 64% of Americans believe we're heading toward a cashless society. That's true even if USA Today and the rest of the mainstream media tells us otherwise.
However, that fact doesn't necessarily make it a broadly investable trend today...
Take the ETFMG Prime Mobile Payments Fund (IPAY), for example. This exchange-traded fund tracks a basket of roughly 50 mobile-payment-related companies.
Today, IPAY earns a "bullish" rating from the Power Gauge. That's a good first step.
But unfortunately for investors, IPAY has had trouble keeping pace with the benchmark S&P 500 Index this year. We can see the underperformance clearly on the six-month chart...
The S&P 500 has soared around 14% over the past six months. And at the same time, IPAY has plodded along. It's only up around 4% in that span.
That leaves us at an impasse today...
Whether the mainstream media likes it or not, the U.S. is becoming a cashless society. The signs are all around us – from the local coffee shop to the dog groomer to the taco place.
But today, one of the best investments in the space isn't keeping pace with the market.
So for now, I'll put it on my watch list.
And as soon as the next opportunity arises, I'll be ready to jump on it.
Good investing,
Vic Lederman
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
+0.07%
12
16
2
S&P 500
+0.27%
196
261
42
Nasdaq
+0.68%
61
33
5
Small Caps
UNCH
655
955
332
Bonds
-0.19%
Materials
+1.80%
8
18
3
— According to the Chaikin Power Bar, Large Cap stocks and Small Cap stocks are strongly Bullish.. Major indexes are all strongly bullish.
* * * *
Sector Tracker
Sector movement over the last 5 days
Energy
+4.92%
Utilities
+4.32%
Health Care
+2.88%
Staples
+2.54%
Materials
+1.82%
Real Estate
+1.42%
Financial
+1.14%
Industrials
+0.03%
Information Technology
-1.00%
Communication
-2.20%
Discretionary
-2.64%
* * * *
Industry Focus
Dow Jones REIT Services
10
78
22
Over the past 6 months, the Dow Jones REIT subsector (RWR) has underperformed the S&P 500 by -12.60%. Its Power Bar ratio, which measures future potential, is Weak, with more Bearish than Bullish stocks. It is currently ranked #18 of 21 subsectors.
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