Investing in the Tech Revolution: Crafting a Balanced Portfolio with Stocks and Crypto

Good evening, everyone!

I’m thrilled to connect with all of you here at Diamond Ridge Financial Academy. Let’s explore cutting-edge investment insights together. I hope tonight’s session leaves you inspired and provides valuable guidance on your investment journey.

Last week, we learned how to identify high-growth stocks by analyzing industry outlook, profitability and financial health. We gained a clearer understanding of companies with strong growth potential and seized the opportunities brought by the tech revolution. In practice, we used our quantitative trading system to successfully capture the uptrends in investments like Super Micro Computer (SMCI), Rolls-Royce (RR.) and Eth. Students following this portfolio saw returns of over 10%.

This week, we’ll take a closer look at how the quantitative trading system works and use real-life examples to show you its strengths and weaknesses. We’ll break down the mystery behind this powerful tool, helping you understand and use it more effectively to achieve greater success in the market. For students who want real-time trading signals, please reach out to the Diamond Ridge Financial Academy assistant.  We’ll provide you with more accurate strategies and trading tip.

Today marks the first day of trading this month. Let’s kick it off by analyzing market conditions and preparing for the month ahead. But before we dive into the main topic, let’s take a moment to review today’s market updates and catch up on the latest trends.

Today, the UK stock market saw a slight uptick, with the FTSE 100 index rising by 24 points.  

The main drivers behind this intraday rally came from two areas.

First, the recent surge in the housing market boosted stocks in related sectors. Thanks to the growing "student economy" over the past few years, UK house prices have been steadily climbing and are now just 1% below their all-time high from summer 2022. Despite high interest rates, housing market activity has remained relatively resilient in recent months, with mortgage approvals nearing pre-pandemic levels. This increased liquidity in the property market, driven by the student economy and rising activity, has benefited industries like construction, home improvement and financial services.

Although the "student economy" is tapering off this year, the government’s recent announcement on stamp duty reforms has reignited activity in the housing market. Starting Apr 2025, stamp duty rates will rise. First-time buyers purchasing homes under £425K will pay £6.25K in stamp duty, while buyers of second homes will face an increase in the rate from 3% to 5%. This policy is expected to push some buyers to act quickly to avoid the higher taxes, temporarily boosting transaction volumes. Combined, these factors are keeping house prices strong, showing the market’s resilience.

However, in the long run, higher stamp duties could have a negative impact on property prices. While short-term demand may spike as buyers rush to beat the tax hike, this isn’t a sign of healthy market growth. The increased stamp duty will significantly raise buying costs, especially for second-home buyers and investors, likely dampening demand.  

The recent rise in house prices is largely driven by liquidity, but once the stamp duty changes kick in, that liquidity could dry up leading to a sustained drop in property prices. For real estate investors, this may be a good time to take profits while prices are near record highs, reducing exposure to potential risks.

Second, investors have high hopes for the luxury goods industry which is drawing significant capital. As the global economy recovers, consumer confidence is improving and demand for luxury goods is rising. Even with frequent geopolitical conflicts impacting the global economy post-pandemic, high-income groups have maintained strong spending power, showing little effect from these challenges. In recent years, the luxury industry has seen steady growth. Its high-value products and strong brand influence give it an edge in weathering economic fluctuations.  

Notably, many luxury goods have inherent resale value, which often drives a premium in stock prices. For example, today’s sharp rise in Swiss Watch Group’s stock price (LSE: WOSG) reflects this. However, the growth potential in this sector is quite limited, offering more opportunities for short-term trading rather than long-term investment.

In contrast, the tech industry is the true leader for future investments, with far greater long-term growth potential than real estate or luxury goods. The tech revolution is transforming the world at an unprecedented speed. Emerging technologies like AI, digital assets and renewable energy are reshaping industries and driving rapid economic growth.  

AI, as a core driver of the tech revolution is fundamentally changing how we live and creating new growth opportunities for businesses. It improves productivity, reduces costs, enhances service quality and enables new business models, opening up untapped markets.

For example, fields like digital assets, autonomous driving, smart healthcare and intelligent manufacturing are all benefiting from the rapid advancements in AI, offering investors huge returns. This tech wave has also brought innovative tools like our upcoming Quant Trading System 5.0, which launches for testing in Jan. This system leverages AI to deliver more accurate predictions, faster responses and reduced risks, making it easier for investors to achieve their goals.

Under the current tech revolution, using tools like our quantitative trading system has brought us many great investment opportunities. One recent example is Super Micro Computer (SMCI), which has performed exceptionally well by riding the wave of the tech revolution, especially in the fast-growing AI and cloud computing fields.  

As a leading semiconductor company, SMCI’s products are widely used in AI, cloud computing and data centers. With AI technology advancing rapidly, the demand for high-performance computing is growing fast and SMCI’s chips are perfectly positioned to meet this need.

SMCI was one of the AI-focused stocks that our chief analyst, Hanover, strongly recommended in mid-Nov. On Nov 20, we also suggested our group members buy it around $25 and later advised reducing positions near $39. Based on SMCI’s strong industry potential and promising performance outlook, this stock remains worth following. We had originally planned to increase positions today but SMCI opened over 10% higher, making it less suitable for conservative investors. For future moves with SMCI, please stay tuned to our group updates and wait patiently for the next trading signal.

In addition, Rolls-Royce saw another strong rally today.

As a global leader in jet engine manufacturing, Rolls-Royce operates across civil aviation, defense and energy sectors. Over the years, advancements in engine technology, such as cutting-edge materials, digitization and AI have powered the growth of this industry. Rolls-Royce has consistently adopted and applied these new tech to improve engine performance, cut operating costs and boost fuel efficiency, gaining a clear competitive edge.  

Rolls-Royce’s rally reflects its ability to keep up with the tech revolution by driving continuous innovation and upgrading its products.

Rolls-Royce has been performing outstandingly recently and its technical pattern perfectly aligns with Professor Hannover's "Price Trend" theory. As shown in the chart, the stock’s lows are steadily rising and the highs are continually reaching new peaks, forming a clear upward channel. The drop on Nov 26 during the session just touched the upward trend line, which is why we recommended buying. Those who followed the trade have seen a 7% return.

Currently, Rolls-Royce's stock price is near a historical high resistance level, so we recommend taking short-term profits and waiting for a pullback to the trend line before re-entering. Rolls-Royce's success once again proves the investment opportunities brought by the tech revolution and highlights the important role of the quantitative trading system in this wave.

Beyond tech stocks, digital assets have also experienced explosive growth under the rapid development of the digital economy. In particular crypto, which use encryption tech to ensure transaction security and are decentralized, are becoming the focal point for global investors. The rise of crypto is closely tied to the tech revolution. Blockchain technology as the foundation of crypto provides decentralization, security and transparency, offering a reliable framework for digital asset transactions. As blockchain technology continues to evolve and find more use cases, the value of crypto is increasing.

Recently, the escalating situation in the Middle East has given BTC and other crypto a new push. Amid growing global economic uncertainty, BTC is increasingly seen as "digital gold" with strong hedging properties. Investors are shifting funds into BTC and other crypto as a way to preserve and grow their assets. This includes governments like the US, using BTC as a strategic reserve and tech giants like MicroStrategy (MSTR) and Microsoft (MSFT) accumulating large amounts of BTC.

Therefore, adding BTC and other crypto to an investment portfolio can effectively diversify risks and offer higher returns.

Here are the advantages of crypto:

1. Hedging properties: In times of increasing global economic uncertainty, BTC and other crypto can effectively hedge against risks, serving as a safe haven in your portfolio.

2. Appreciation potential: The crypto market is still in its early stages and with rapid technological advancements, there is significant growth potential, offering investors huge appreciation opportunities.

3. Diversification: Including BTC and other crypto in your portfolio can effectively spread investment risk and increase the overall return on your investments.

As shown in the chart, BTC is also currently in an upward trend and after a short-term correction, it's expected to continue rising.

Therefore, in our upcoming investment strategy, we will focus on the tech revolution as our investment direction, combining tech stocks and crypto to create a stable and high-return investment portfolio.

This combined investment strategy brings together the stability and growth potential of tech stocks with the safe-haven attributes and appreciation potential of crypto, forming a complementary portfolio.

Tech stocks represent the future direction of economic development, with strong growth potential. They are constantly innovating in fields like artificial intelligence, digital economy and renewable energy, creating new business models and market spaces. By investing in tech stocks, you can share in the benefits of the tech revolution and earn long-term stable returns.

Crypto can serve as a safe-haven asset in the investment portfolio, helping to effectively hedge against risks as global economic uncertainties rise, while also providing some appreciation potential for the portfolio.

Combining tech stocks and crypto allows for better risk diversification and the potential for higher returns.

That's all for tonight's share. I hope this helps you understand the risks and opportunities in today's global environment. In our next session, we will analyze price fluctuations to summarize the buying and selling trading patterns. If you have any questions about stocks, crypto, forex or want to build a portfolio, feel free to contact me anytime!