Staying Up-to-date with the Rapidly Evolving Blockchain and Crypto Ecosystem (May 2022)

Download PDF With Facebook’s recent name change, nearly everyone has heard of the metaverse, but what is it really? Is it virtual and augmented reality? Is it Fortnite? Is it purchasing digital assets with actual analog money? Yes but no – the metaverse is not so much new technology but how we interact with it. The idea of the metaverse is fairly new (first mentioned in the science fiction novel Snow Crash published in 1992), and like the internet of the 1990s and early 2000s, it is still developing. However, even at this early stage, it is becoming clear that blockchain technology is an essential cog in this machine and will be critical to its future growth.

Download PDF Perhaps nothing summarizes the investor experience better than the old quote that “nothing worth doing is easy.” The current market environment, as uncomfortable as it may be, serves as a reminder that staying invested is difficult. The very definition of investing involves sacrificing what we could buy and consume today in order to achieve more tomorrow. Over long periods, when combined with long-term trends and attractive investment themes, this is how investors can transform hard-earned savings into true wealth and financial freedom. What can all investors do to focus on the long run when the daily headlines and market swings can be alarming?

Download PDF Global growth predictions for what some industry visionaries have called the 3D internet are so off the charts (ex. $50 billion to $800 billion in two years1) they don’t seem real. But don’t tell that to Microsoft, Google, Meta (formerly Facebook), Qualcomm, or the long list of other companies committing huge sums to obtain an early advantage in this market. Given the stratospheric growth forecasts and the early strategic deployment of “smart money” into the space, how can investors participate? One option is blockchain-related companies – this technology is the foundation that makes the metaverse possible.

Download PDF The question at the forefront of investors’ minds is whether the economy can achieve a so-called “soft landing” in the face of high inflation, rising interest rates, Fed rate hikes, geopolitical conflicts, and other challenges. A soft landing would require the economy to slow gradually without creating a downward spiral in consumer demand and business investment. While the market correction this year has created a challenging investment environment, a recession is possible but not inevitable. What market and economic measures should long-term investors focus on in the coming months?

Staying Up-to-date with the Rapidly Evolving Blockchain and Crypto Ecosystem (June 2022)

Download PDF Ordering dinner, household supplies, or just about anything has never been easier – just click and it appears on your computer or arrives on your doorstep. Some e-commerce names are well established, but for others, growth trajectories are just beginning. E-commerce is still in its adolescence (Amazon sold its first book in 1995), and experts agree decades of solid growth lie ahead. The pandemic accelerated what we already knew – for billions worldwide, shopping online is a must.

Download PDF As we enter the second half of the year, investors continue to grapple with inflation, higher interest rates, the Fed, and the prospect of a recession. If historical bear markets are any indication, the decisions investors make during this period will have long-lasting effects on their portfolios.

Staying Up-to-date with the Rapidly Evolving Blockchain and Crypto Ecosystem (July 2022)

Download PDF Last week’s report on the country’s Gross Domestic Product for the second quarter confirmed that the economy shrank in the first half of the year, a fact that some investors and economists had already suspected. Broad-based inflation, rising energy prices, higher interest rates, and other factors were a drag on growth for the second consecutive quarter. And while the economy is still 1.6% larger compared to a year ago, even after adjusting for inflation, many are wondering whether we are now in a recession. With clear signs that growth has slowed, how should long-term investors react? In many ways, the current investment environment may be one of the most challenging in years due to a variety of mixed signals. While analyzing economic data in the right context is always difficult, many of today’s market and economic factors can be interpreted as being either good and bad, depending on one’s perspective and priorities. For instance, another major event last week was the Fed raising rates by 75 basis points for the second time in as many meetings. While tighter monetary policy is usually a bad sign for the economy, major indices have rallied in response to the Fed combating inflation. Similarly, slower economic growth and an inverted yield curve would normally be negative for the stock market. However, growth that is only moderately slower, but that helps to ease supply and demand pressures on inflation, can be positive. These data have pulled the 10-year Treasury yield back to around 2.65% from near 3% only a month ago, and many other interest rates, including mortgage rates, have fallen as well. Perhaps more interestingly, the S&P 500 rallied 9.1% in July and has rebounded 12.6% since the middle of June following the Fed meeting that month. This is another reminder to long-term investors that markets can rebound when it’s least expected. In this context, there are a few ways in which investors can interpret the latest GDP numbers. First, does this mean that we’re in a recession? While some consider two consecutive quarters of negative growth to be a recession, sometimes referred to as a “technical recession,” the official definition from the National Bureau of Economic Research is more nuanced and considers a variety of data beyond GDP. The economy shrank for the second consecutive quarter Although growth is negative, many other indicators, especially within the labor market, are still quite strong. Over 1.1 million net new jobs were created during the second quarter, bringing the year-to-date total to 2.7 million jobs. There are still 11.3 million job openings, near the historic peak, which suggests that many companies would still like to hire and expand. So, while some investors and the news media may enjoy debating the meaning of the term “recession,” such strong job dynamics are not consistent with historical economic contractions. It’s also important to keep in mind that the numbers are reported as annual rates. Thus, what 0.9% means is that the economy would have shrunk by this amount had the same trends continued for a full year. In reality, the economy only shrank by a quarter of this amount. Additionally, the GDP numbers are calculated to be in “real” terms, i.e. they subtract the effects of inflation. In “nominal” terms, i.e. with inflationary trends, GDP actually grew by 6.6% in the first quarter and 7.8% in the second quarter. Business investment and inventories were drags on GDP in Q2 Third, while there were slowdowns across the board, including in consumer spending, the biggest detractor in the second quarter was a drop in private inventories among businesses. An important component of the business cycle is the inventory cycle since businesses don’t simply produce everything “just-in-time.” Instead, they need to anticipate future demand and may accumulate inventory. When businesses build up inventories, this boosts economic growth in those quarters at the expense of future periods when they draw down those inventories. This is exactly what happened in the second quarter. In contrast, the second half of last year experienced a strong build-up of inventories which contributed 2.2 and 5.3 percentage points of GDP growth in Q3 and Q4 2021, respectively, as businesses anticipated high demand. The chart above shows that “Gross Domestic Private Investment” detracted from GDP in Q2, and the biggest contributor of that was a two percentage point decrease from private inventories. The market has rallied significantly since mid-June None of this discussion is meant to make excuses for a slowing economy. However, it does underscore the importance of not focusing on any individual economic report or trying to time the market based on these numbers. The fact that the S&P 500 has bounced off of bear market levels, despite all of these seemingly negative events, suggests that there can be many ways to interpret these data. At the moment, the market appears to be most focused on fighting inflation. If price pressures do begin to ease later this year, this could be taken as a positive sign. ____________________________________________________________________________________________________________________________________ Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in Amplify Funds statutory and summary prospectus, which may be obtained above or by calling 855-267-3837, or by visiting AmplifyETFs.com. Read the prospectus carefully before investing. 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