Editor's note: What if there was a way to make money no matter whether the market moved higher or lower from here?

As DailyWealth Trader editor Ben Morris explains in this weekend's Masters Series, one little-known strategy allows you to do just that.

As you'll learn in today's installment – the first of an exclusive two-part interview – this investing strategy allows you to take the broad stock market out of the equation altogether...

Bull Market I Win... Bear Market I Also Win

An interview with Ben Morris, editor, DailyWealth Trader

Sam Latter: We're here today with Ben Morris, editor of DailyWealth Trader. Ben, some people might say that your journey to Stansberry Research was unconventional. How did you get your start here and eventually come to work on DailyWealth Trader?

Ben Morris: I was a subscriber back in late 2008 or early 2009, just as the market was crashing. I was selling real estate down in Costa Rica. When the market crashed, I was looking for a way to become smarter with my money. I lost a lot of money in that crash and came across Stansberry Research on an advertisement online and signed up for Steve Sjuggerud's True Wealth.

When I moved back to the U.S., I realized I knew somebody working in Stansberry Research's marketing department. She helped me get my foot in the door in customer service. After a little while there, I interviewed with former editor in chief Brian Hunt and Amber Lee Mason. The two of them were writing DailyWealth Trader at the time. I worked as a research assistant and then started writing issues. As they both eventually moved on to other things, I took over.

Sam: One of the most common pieces of feedback we get at Stansberry Research is that Porter is a bear who has been predicting a bear market and "Debt Jubilee" for months, while Steve Sjuggerud is "Mr. Glass Half-Full" who has been calling for a "Melt Up" in stocks.

But because you look at the market through a bit of a different lens than those two, I'm curious... Where do you think we are in this bull market, and what signs are you looking at to determine when the bull market is going to finally run out of gas?

Ben: I typically look at the big trend in stocks. I look at a lot of different things, but my top two most-trusted indicators are the 200-day moving average (DMA) and the 50-DMA.

These are super-simple indicators to look at where prices are, and where they've been. The 200-DMA takes the last 200 days of closing prices and smooths them out into an average. When it's rising and the benchmark S&P 500 Index, for example, is trading above that rising moving average, we're in a bull market.

That's where we are today. Until stocks break below their 200-DMA and the 200-DMA turns lower, I'm not really going to be too worried. The trend is up right now. That's what I'm mostly looking at.

Sam: Given that, how would you go about allocating a hypothetical model portfolio spread across several different asset classes today?

Ben: It shouldn't come as much of a surprise that I still recommend an investor having the majority of his money in stocks. It does depend on where you are in life and what your financial goals are, of course.

That said, I would recommend having around 50%-60% in stocks, 15% in bonds, 10% in cash, 5%-10% in precious metals, and 10%-20% in real estate.

I think the bull market still has legs, but we can't know for sure, so I don't necessarily recommend using a single strategy for the stock portion of your portfolio. Other strategies can help protect you from a pullback or full-blown bear market in stocks.

Sam: Speaking of investment approaches, are there any strategies that you would recommend today more so than you would have earlier in this bull market?

Ben: Absolutely. This late in the bull market, you shouldn't just be buying and holding stocks. I recommend taking advantage of short-selling – or profiting as a company's share price declines. That way, if the overall market falls, you can make some money on the downside.

The other strategy I like a lot right now is called "pairs trading." This strategy involves buying one stock and selling another stock short. You treat the two trades as a single position. Pairs trading is particularly effective in a market where you're concerned that the bull market could be nearing its final days, but it's not over just yet.

Sam: Can you walk us through an example of a pairs trade?

Ben: Sure. As I just mentioned, a pairs trade involves buying one stock and betting it goes up while selling another stock short and betting it goes down. You put equal dollar amounts into each position. Because you're betting both with and against the stock market in the same position, you're neutralizing the volatility that comes from stock market fluctuations. That's why it's considered "market neutral." Essentially, you're betting on one asset to outperform another.

Here's a simple example of a pairs trade, just taking two stocks at random here...

Let's say you buy $10,000 worth of credit-card company American Express (AXP) and sell short $10,000 worth of airline firm Southwest Airlines (LUV). If American Express climbs 10% and Southwest Airlines falls 10%, you make $2,000. In other words, you made $1,000 as American Express climbed 10% and $1,000 as Southwest fell 10%.

If American Express climbs 10% and Southwest climbs 5%, you still make $500. That's a $1,000 gain on American Express and a $500 loss on your short position in Southwest Airlines.

Finally, if American Express drops 10% but Southwest drops 15%, you'll still make $500. In this scenario, you made $1,500 on the Southwest short and lost $1,000 on American Express.

The only way you lose in this example is if Southwest Airlines outperforms American Express.

Sam: You called pairs trades market neutral, meaning you don't have to rely on the market to rise in order to profit from them. Instead, you only need the asset that you bought to perform better than the asset that you sell short?

Ben: That's right. And you can structure pairs trades in lots of different ways. It really depends what risk factor you want to take out of the market.

For example, if you're concerned about general fluctuations in the stock market or worried about a stock market crash, you could buy an exchange-traded fund ("ETF") for one sector and then sell a different market sector ETF short. That way, you'll make money as long as the market sector you buy outperforms the one you sell short. If the market crashes and the fund you buy crashes less than the one you sell short, you still make money.

That's just one way of structuring a pairs trade. You could also buy one stock in an industry and short another stock in the same industry. That way, you're not just neutralizing the effect of stock market fluctuations, you're also getting down to industry fluctuations. Even if the bull market continues but the sector drops, if you're buying one stock and shorting another stock in the same industry, it doesn't really matter what that sector does. You just need the one stock to do better than the other.

One more example is that you could bet on one stock rising and you short the whole stock market, like an S&P 500 Index fund. This would just be a bet that the stock will do better than the overall market. That can happen in a rising or falling market. You're just betting on one stock to be better than average, really.

Sam: You could also buy one commodity and short another, or buy one country and short another. It seems like you have an almost infinite number of options.

Ben: You really do. The one potential limiting factor is that you're not able to borrow shares to short all stocks. Some smaller stocks that don't have a lot of trading volume are hard to borrow, so either your broker will charge you interest or you may just not even be able to borrow the stock to short. This isn't an issue with most large stocks or funds that are widely traded. You have a huge variety of potential trades.

Sam: In the current DailyWealth Trader portfolio, you have a few open pairs trades. Can you tell us about one of them?

Ben: Sure. We recently recommended buying a mobile-payments fund, the ETFMG Prime Mobile Payments (IPAY), and selling shares of Western Union (WU) short.

If you've never used it, Western Union is a money-transfer service. You can walk into a Rite-Aid or Walgreen's and go tell the operator where you want to send money. The problem is, Western Union charges a big fee for doing this. If you're sending money overseas – which is most of Western Union's business – you're usually charged $8 or $10 for the transaction. Even worse, it charges big fees to exchange currencies.

Earlier, I mentioned that I used to live in Costa Rica. I've sent money down there before and I've paid as much as 6%. That's a crazy fee to just send money to someone else.

IPAY, on the other hand, holds a basket of companies like mobile-payments firms PayPal (PYPL) and Square (SQ), and credit-card companies Visa (V) and American Express (AXP). These companies are making digital payments easier.

This is basically a bet that Western Union – an older, expensive, inconvenient service – is going to lose to a lot of its competitors that are growing like crazy and offering cheaper, more convenient services.

Sam: Western Union is like driving to the bank to deposit a check, and IPAY is like depositing it from your smartphone.

Ben: That's a great analogy.

Sam: We touched on it earlier, but can you elaborate on why pairs trading is a strategy that you recommend today in particular?

Ben: You know, we still could have another six months or even two years left in this bull market. But it could also end tomorrow. It's impossible to know. The trend is up, but we've seen major crashes in the market before that come out of nowhere. On Black Monday in October 1987, stocks crashed 20% in a single trading session. That's the sort of thing that can totally wreck your portfolio if you're not prepared.

When you place a pairs trade, that kind of market movement doesn't matter at all. You can make money on huge down days like that. Remember, with pairs trades, all you need is for the long position to outperform the short position. If stocks go higher, you can make money. If stocks fall, you can make money. If stocks go nowhere, you can make money.

Sam: Bull market I win, bear market I also win.

Ben: Exactly.

Editor's note: Ben just released a brand-new presentation explaining exactly how you can start using this strategy to make tens of thousands of dollars a year, no matter what happens next in the market. Watch it – and learn how to get a full year of DailyWealth Trader at a huge discount to its regular retail price – by clicking here.