The Best Way to Beat the 'Doom and Gloom' Headlines
'Real reasons not to invest'... Wrong predictions, overblown fears, and more... Don't let the headlines control your investment destiny... The latest 'reason not to invest' today... The best way to beat the 'doom and gloom' headlines...
Editor's note: We're taking a break from the usual Digest fare over the next few days...
We've asked our friend and colleague Steve Sjuggerud to explain the latest developments in his "Melt Up" thesis. In short, he believes the Melt Up is about to take a dramatic turn...
Steve plans to reveal even more during a free online event this Wednesday, February 12, at 8 p.m. Eastern time. And he has invited legendary stock-picker Matt McCall to join him.
They'll show attendees exactly how to cash in on this shift... make a prediction about how high the Nasdaq could go by the end of the Melt Up... explain why the so-called "FAANG" stocks aren't where the real money will be made... and much more. If you haven't yet registered for Steve's event, take a minute to do so right now. Click here to save your seat.
After you've done that, be sure to read today's Digest...
In it, Vic Lederman – one of Steve's trusted research analysts – shares an "outside the box" take on the Melt Up. Vic details a few "real reasons not to invest" in stocks in recent years. And more important, he shows that things still haven't played out as many folks expected...
You'd be a fool to be long in this environment...
It's bad out there. And I (Vic Lederman) bet you've noticed, too...
Chinese stocks are sputtering out. And Greece just defaulted on its debt. People have said for months that the country's debt crisis would drag the world into recession.
It might even tear apart the European Union!
We all knew this was coming, though... The post-housing-crisis economy is simply too weak to handle this kind of turbulence. So in today's Digest, I'm calling it...
February 8, 2016 marks the end of this bull market.
Take a look...
It's obvious. Just looking at the chart tells us that the U.S. stock market has turned...
The bull market is over. And it's time to switch to defense.
OK, that prediction didn't turn out as expected...
But I swear... This is the real reason not to invest in U.S. stocks any longer.
It's bad out there. And I bet you've noticed, too.
The market's run in 2017 was insane! The benchmark S&P 500 Index bounced back... soaring nearly 20% on the year. But with such a big move higher, U.S. stocks became way too overextended...
The S&P 500 officially entered into a correction earlier this year. And by all accounts, this is definitely the end of the bull market.
Everything had been going great. But then, the Federal Reserve started jacking up interest rates. There wasn't even a hint of inflation on the horizon! And the Fed is still going, too... By doing that, it has now ruined all the fun for U.S. stocks. Take a look...
Clearly, the market just couldn't handle the stress. Have you been reading the news? Have you tuned into CNBC lately? It's wild out there! The surge in 2017 was the top. So I'm calling it...
April 2, 2018 marks the end of this bull market.
The bull market is over. And it's time to switch to defense.
Maybe those fears were overblown, too – since U.S. stocks rallied more than 10% over the next five months...
But let's keep going... just to make sure we're all on the same page. And I swear... This is the real reason not to invest in U.S. stocks any longer.
You see, the first shots of World War III have just been fired!
Iran keeps terrorizing oil tankers in the Strait of Hormuz. Can't find that on a map? Don't worry, we're here to help...
This is the most important shipping channel in the world. And Iran is finally making good on its threats. It keeps attacking ships... And it just seized a British tanker in the region.
The entire global oil supply is about to be cut off. World War III is knocking at our front door.
If you haven't already... get out of U.S. stocks now.
The world simply can't handle a new war in the Middle East. And all the pundits say a war with Iran would be really, really bad for the U.S. It's definitely the end. So I'm calling it...
July 19, 2019 marks the end of this bull market.
The bull market is over. And it's time to switch to defense.
By now, you get my point. And thank goodness I didn't write any of those examples up in earnest...
At the time, all those "real reasons not to invest in U.S. stocks any longer" seemed deadly serious for many folks.
Investors were spooked. And every time, the markets moved accordingly.
In each case, the media reported on the stock market volatility like it was something new. Maybe you've seen headlines like this...
CNBC might as well just be shouting, "BE VERY AFRAID!" from the rooftops.
Now, Wall Street investing types live for this kind of hype. It gets the markets frothed up. And it invariably leads to "mom and pop investors" losing big time. Even the most savvy investors among us feel the pressure...
If you have a pulse, it's hard not to wince at fear-generating headlines like the one above. And the escalating Iran tensions starting last summer are the perfect example...
Conflict in the Strait of Hormuz is scary. And it has the potential to shape major economic outcomes.
So our reaction is near universal... We all ask ourselves the same questions. And we all draw similar conclusions...
- "It sure looks bad out there."
- "Maybe it's time to step aside."
- "The political climate just isn't right for big gains."
- "I'll just wait until after the next downturn."
It's OK to have thoughts like that. But acting on them is a disaster in the making...
Seriously.
You can't let headlines control your investment destiny. If you do, well, take a look at the following chart and tell me... Where did the longest-running bull market in history end?
Imagine living in a world where you make investment decisions based only on headlines...
You easily could have stepped aside as the market plunged lower in late 2015. And if you had stayed out of the market over the past five years, you would have missed a ton of gains...
You would have missed five years of America's greatest bull market! Now, I can't speak for everyone... But that chart sure looks like the kind of market I'd want to be invested in.
It's headed almost straight up. And it has been for a long time...
The S&P 500 has soared around 60% over the past five years. And that's before dividends! With the right tools, some investors won much bigger over that span.
But along the way... there was always a "real reason not to invest."
And the thing is... I've only covered about half of the "reasons not to invest" that I wanted to in today's Digest. We could go over many more examples from just the past few years. Every one of them seemed like the end of the bull market to many folks.
Now, look at the above chart again. At any point in the past five years, did you think the bull market had come to an end?
Heck, I'll be honest... I know I did. Headlines are persuasive. And today, we're confronted with another "doom and gloom" headline that many folks think could spell the end of the bull market...
Coronavirus is going to wipe out global commerce...
Geez. Is it really that bad?
Well, all the evidence we have says "no." But that doesn't stop all the pundits... The headlines have been absolutely out of control. And people are darn scared right now.
Look, I'm not saying coronavirus isn't a big deal. It is.
But every previous reason not to invest was a big deal, too.
Is coronavirus a bigger deal than a potential war with Iran? What about the possible collapse of the European Union? And be honest... have the coronavirus headlines pushed those old "real reasons not to invest" out of your mind?
The reality is simple... While headlines are persuasive, they don't always tell the whole story. As I explained in our free DailyWealth e-letter this morning...
[Headlines] encourage you to act on emotion rather than data.
I'm sure that some investors panicked out of the market as soon as the news broke. I hope that wasn't you – because it would have been quite the mistake. Take a look...
Coronavirus first popped up in early December. And in fairness, it didn't enter the global spotlight until mid-January.
At that point, fear did cause a few bad days in the markets. But look what has happened since... We've already stormed back to new highs.
Despite the latest "real reason not to invest" – coronavirus – stocks are still headed up.
The most successful investors don't rely on the emotional pull of headlines to make their investment decisions. Instead, they find the unifying theme that's driving the market.
Fortunately, we have a unifying theme today. And it cuts through all the 'noise' of the news cycle...
I'm talking about Steve's Melt Up thesis.
It's the unifying theme tying all the market action together...
When Steve first pitched it to subscribers years ago, almost nobody was interested. The economy was gasping for air after the housing crisis. But Steve was pounding the table...
"An asset bubble unlike anything we've ever seen" was on the horizon. And Steve was urging his True Wealth subscribers to get in and stay invested.
Today, we're in the late innings of that asset bubble... The past 10 years have produced America's greatest bull market. And now, we're getting near the end of it.
That might make you want to step aside. But the thing is, that's exactly the wrong reaction.
We're on the edge of a massive stock market Melt Up...
Stocks will push higher before the next recession... a lot higher.
But you don't have to take my word for it... History has plenty of examples proving that bull markets end with a bang – not a whimper. Take a look at what happened in Japan in the 1980s...
Japan's market rocketed up a staggering 1,240% during its Melt Up.
U.S. stocks have seen a few Melt Up endings throughout history, too. Here's what happened in the late 1920s...
And a more recent example of a Melt Up in U.S. tech stocks occurred in the late 1990s...
By now, I hope the takeaway in today's Digest is clear...
We're in the midst of America's greatest bull market. And all the historical evidence we have says it will end with a bang.
That's the Melt Up.
Playing it to your advantage can be as simple as owning U.S. stocks. But since you've read this far, you owe it to yourself to check in with the man who created this unifying theme...
And I'm not just saying that because he's my boss.
This Wednesday at 8 p.m. Eastern time, Steve will host a free online event in which he'll reveal all the critical details about what investors should do with their money right now. He'll explain how you can take advantage of what's happening in an entirely new way...
The late innings of this bull market are upon us. But according to Steve, if you miss out on what's coming next... you'll likely miss out on the biggest gains of the 11-year run higher.
You don't want that to happen. If you have any money invested in U.S. stocks today, you'll want to clear your calendar to join Steve on Wednesday night. Reserve your spot right here.
New 52-week highs (as of 2/7/20): AbbVie (ABBV), American Financial (AFG), Amazon (AMZN), CBRE Group (CBRE), DocuSign (DOCU), Western Asset Emerging Markets Debt Fund (EMD), Hannon Armstrong Sustainable Infrastructure Capital (HASI), Nuveen Preferred Securities Income Fund (JPS), Invesco KBW Property & Casualty Insurance Fund (KBWP), Coca-Cola (KO), Lennar (LEN), Lockheed Martin (LMT), Microsoft (MSFT), Nuveen Municipal Value Fund (NUV), PepsiCo (PEP), ResMed (RMD), T-Mobile (TMUS), and W.R. Berkley (WRB).
In today's mailbag, a paid-up subscriber shares his experience with the "fear of missing out," which Steve discussed in his latest issue of True Wealth Systems last Thursday. Plus, we received a few more e-mails about Dan Ferris' recent Digest on the "$100 Challenge." Have a comment or question? As always, send it to feedback@stansberryresearch.com.
"I experienced FOMO in person on Friday night. I was riding the metro in Washington, D.C., reviewing some cryptos and gold stocks on the Robinhood app on my phone. A complete stranger next to me on the train saw this, pulled out his cell phone, held it so I could see he had his Robinhood app open, then asked when I looked over, 'Have any good stock tips?!'
"I told him to subscribe to Stansberry. Steve Sjuggerud's most recent True Wealth Systems newsletter was spot on. Now I'm alert to party conversations, with the ultimate exit signal (if not sooner) when my parents or in-laws ask for stock tips. My subscriptions have been the best education and insight on what to expect. Thank you!" – Paid-up subscriber Mark L.
"I think I did [master trader Mark Minervini's $100 Challenge] when I joined the Alliance. My portfolio wasn't very big at all at the time and I forked over $15,000 with a commitment to make it work. (Which it has.) I have to admit that I am still learning but that was part of the commitment." – Paid-up Stansberry Alliance member Mike A.
"Dan, is throwing $25,000 at an Alliance Membership similar to throwing it out the window in terms of a commitment? Thanks for your Digests and thanks to Stansberry for great analysis and recommendations that continue to make me and others much better investors and traders." – Paid-up Stansberry Alliance member John C.
Good investing,
Vic Lederman
Jacksonville, Florida
February 10, 2020