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FAANG Stocks Left Behind as Market Makes New Highs

By U.S. News & World Report

The Standard & Poor’s 500 index is off to a strong start to the week, up another 0.6 percent to new all-time highs. While fresh highs have been a routine occurrence throughout the eight-year-old bull market, a handful of familiar names are conspicuously absent from the recent rally.

Facebook (Nasdaq: FB), Amazon.com ( AMZN), Apple Inc. ( AAPL), Netflix ( NFLX) and Alphabet ( GOOG, GOOGL), five huge growth stocks collectively known as FAANG, have all lagged the market so far this week. These five stocks have been top performers throughout the past eight years, with returns ranging from an 84 percent gain for Apple to more than a 1,000 percent gain for Netflix.

FAANG stocks led the market to new highs in 2017, delivering year-to-date returns of between 22 percent and 47 percent. However, this week’s trading action once again has investors wondering whether FAANG stocks have finally lost their bite.

[See: The 25 Best Blue-Chip Stocks to Buy for 2017.]

Financial analytics firm S3 Partners recently reported that traders have been increasing their bearish bets against the FAANG stocks. According to S3 Partners director Brett Weiss, short interest among FAANG stocks jumped by 7.6 percent from Aug. 15 to Sept. 28, reaching a collective $27.3 billion in size.

The good news for investors is that short sellers may not necessarily see anything specifically wrong with the popular FAANG stocks. Instead, they may see them as a cheap way to hedge against the overall market as it makes new highs.

“As the market continues to hit highs almost daily, these in-favor companies could see a higher demand to add to shorts,” Weiss says. “All of these companies continue to trade at general collateral levels, the cheapest fee [for the] easiest-to-borrow stocks.”

However, some analysts have grown skeptical of the size, market weighting and valuations of the FAANG group. in June, Goldman Sachs analyst Robert Boroujerdi said Facebook, Amazon, Apple, Microsoft Corp. ( MSFT) and Google have created a “valuation air pocket” in the market due to their size and relative outperformance. That group is known as FAAMG stocks, since Microsoft replaces Netflix in the group.

[Read: 10 Reasons Why Everyone Should Own Facebook Stock.]

“This outperformance, driven by secular growth and the death of the reflation narrative, has created positioning extremes, factor crowding and difficult-to-decipher risk narratives,” Boroujerdi wrote.

Boroujerdi’s warning initially triggered a sell-off in the FAAMG stocks. Facebook and Microsoft have since recovered, but Apple, Alphabet and Amazon shares are all still trading below their June 8 closing prices.

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FAANG Stocks Left Behind as Market Makes New Highs originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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