Did you know that approximately 85% of professional fund managers underperform the market over a 15-year period?

Diversification and low-cost investing strategies like index funds can outperform even the experts.

In today’s edition of our newsletter, we’ll be covering:

• Advice To Newcomers: First, we’ll learn the difference between trading for fun and long-term investing 📝

• Nvidia Stock Is In A Slump—What Tesla Can Tell Us: Next, we’ll take a deeper look into Nvidia's recent decline 🖥️

• Intel Stock Rises On Report Of Apollo Investment—Why It’s A Good Sign: Finally, a potential $5 billion investment could be Intel's lifeline 👍

This edition will help you stay informed and level-headed as the market shifts. Off we go!

Advice To Newcomers 📝

Put your money in a diversified portfolio.

Put it in a 401(k) or individual retirement account and just watch it grow.

Some years it will be down.

But it will catch up 🚀

And stick with stocks over bonds.

If you are a short-term trader, you chase earnings.

If you’re a long-term investor, you chase diversification.

Trading is a different animal.

You can have fun with some of your portfolio 📊

But that’s different from being a long-term investor.

Nvidia Stock Is In A Slump—What Tesla Can Tell Us 🖥️

Nvidia stock has dropped over the past few months.

Investors should hang on—tight.

Shares have fallen to $116, a 14% decline from their record close around $135, hit in June.

They were down 38% to $98 at their lowest levels during this summertime drop.

The stock is up just about tenfold over the past five years.

Investors should not rush for the exit—research shows that a drop like this is normal, and even expected, for a stock like Nvidia, which has seen exponential growth in its share price 📈

A combination of related factors have driven shares of the artificial-intelligence leader lower.

When Nvidia stock hit $135, investors took profits by selling.

Emerging competition from chip makers such as Advanced Micro Devices threaten a small portion of Nvidia’s sales, making the smaller AMD perhaps a more compelling buy at this point.

And while AI chips are experiencing high and accelerating demand, everyone knows the growth for all chip makers will slow within the next few years.

That’s not the end of Nvidia’s storybook journey.

It’s completely normal for rare stocks with explosive growth curves to experience large declines periodically 😌

Historically, the average maximum drawdown for stocks that went up tenfold in a five-year period is 48%, according to Trivariate Research’s analysis of 84 stocks that have achieved this feat.

Analysts still expect the chip company to post double-digit annual earnings growth, in percent terms, over the next several years, according to FactSet.

Nvidia stock now trades at a lower multiple of near-term earnings estimates, so continued earnings growth could take the shares higher from here.

That outlook makes Nvidia more like Tesla, which went up by more than 10 times during the five years ended in May 2017.

Electric-vehicle demand, like chip demand today, was exploding.

Within that five-year stretch, Tesla stock’s worst drawdown was 50% over a year-and-a-half period that ended in February 2016.

Since then, shares have rocketed another 20 times.

Yes, EV competition has emerged, but overall industry growth has still benefited Tesla.

Maybe Nvidia has a similar future.

Just hold on for the long-term 📅

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Intel Stock Rises On Report Of Apollo Investment—Why It’s A Good Sign 👍

Intel stock spiked Monday on a report that the chip maker has received an investment offer of up to $5 billion from Apollo Global Management.

Intel is down more than 50% this year.

Apollo is interested in putting in as much as $5 billion to Intel, possibly in return for equity in the company.

A deal isn’t done yet, according to reports.

It’s the latest good sign for Intel ✔️

Its rival, Qaulcomm, is interested in buying out Intel altogether, the Wall Street Journal reported last week.

Both attempts could be seen as signs that big potential investors are confident that Intel will be able to turn things around after having lost ground in the chip race to companies such as Nvidia and Advanced Micro Devices.

Intel has been having a rough time.

In August, it said it would cut 15,000 jobs and suspend its dividend following disappointing earnings and weak guidance 📉

Last week, Intel shares got a boost though when it announced a deal with Amazon and said it would set up its manufacturing unit as an independent business.

Let’s see what this week brings.

Inner Circle Global Macro Update 🔍

If you wish to gain access to our Inner Circle Global Macro Update, packed with exclusive insights from award-winning portfolio manager and economist Seth Antiles, with secrets that’ll give you an edge in the stock market, be sure to upgrade by clicking the button below 👇️