Good News for Your 401(k)

A 'thaw' in the trade war... 'Relations and communications are resuming'... A big day for Stansberry's Investment Advisory subscribers... Good news for your 401(k)... Doc Eifrig's brand-new Best States for Your Retirement report is now available...

Is the U.S. moving closer to a trade deal with China?

According to a tweet from President Donald Trump, he and Chinese President Xi had a productive talk about trade this morning...

Larry Kudlow, the president's top economic adviser, later confirmed the announcement. However, he warned that it was still too early to assume the "trade war" was ending. As the Wall Street Journal reported this morning...

National Economic Council Director Larry Kudlow said the call represented "a thaw" in relations. "At the presidential level, relations and communications are resuming," Mr. Kudlow said...

Still, he said, the U.S. and China hadn't resolved the problem that has held up talks. The U.S. wants China to come forward with a specific negotiating agenda before the two sides resume preliminary talks to move negotiations along. But Beijing says it won't provide specific points until the two sides meet so it can form a proposal.

"We haven't had a satisfactory response" from China, Mr. Kudlow said. "We're waiting"... "If they don't make a satisfactory offer, then the president will continue to aggressively pursue his agenda and I think he's right to do so. I say that as a free trader," Mr. Kudlow said earlier in the day. "The principle culprit is China."

We also remain skeptical...

As we've discussed, it seems unlikely that either side in this skirmish will concede without a fight.

Still, we think any sign of progress should be considered a positive at this point. And the market appears to agree... The Dow – which was already up again today – jumped almost 130 points immediately after the president's tweet.

A day after Under Armour's (UA) earnings sent shares up 28%, another Stansberry Research recommendation soared today...

This time, it was Stansberry's Investment Advisory holding New York Times' (NYT) turn.

The news giant reported better-than-expected earnings per share of $0.15 versus analyst expectations of $0.11, and revenues of $417.3 million versus expectations of $408.8 million.

But the real standout in the earnings report was that the company added 203,000 new digital-only subscribers. That brings the tally to nearly 3.1 million digital subscriptions, a 24% increase from the same period a year ago.

The rapid growth in digital subscriptions was one of the big reasons Porter and his team of analysts recommended NYT shares last December. They acknowledged that print subscriptions and circulations were on the decline. Print-advertising revenues alone had fallen 32% from 2014 to 2017.

But as they explained, the Times didn't want to be a traditional print newspaper anymore...

It wanted to transform into a digital publishing powerhouse. As they wrote in the December issue...

Times' digital-advertising revenues totaled about $230 million in the past four quarters. That's up from roughly $178 million in 2014 – a 30% increase.

So far, declines in print advertising have outpaced gains from digital advertising. And given the competition in online advertising, we'd much rather see the Times focus on selling digital subscriptions.

Thankfully, the company is starting to sell a lot of them...

The number of digital-only news subscribers has doubled within just two years. And the Times now has more than 350,000 digital crossword subscribers – up from about 140,000 in 2015.

In total, the Times now has nearly 2.5 million digital-only subscribers.

That is certainly an impressive figure...

But remember, NYT.com is one of the most visited websites on the Internet. It receives around 85 million unique visitors per month from the U.S. and more than 120 million around the world. So Porter's team argued that 2.5 million digital subscribers was really just the beginning. More from the issue...

Herein lies the beauty of digital content: Anyone in the world with an Internet connection can buy a digital subscription. Not only that, but the readers also get the content instantaneously in electronic form.

Digital content also frees the Times of the limitations of the "one-size fits all" newspaper. Digital publishing allows for myriad combinations of content... and subscription possibilities.

Basically, digital products give publishers more flexibility in delivering content to the customer.

As Porter's team concluded...

The market still thinks this is a newspaper company. Yet, the Times is rapidly transforming itself into a digital-subscription business. In the next three years, the company's digital revenues are on pace to account for more than half of the company's total sales.

The Times is adapting to the digital age. It's becoming the crown jewel of digital journalism. In the process, it's ensuring its survival and becoming an ever-more scalable publisher.

So far, it looks like their call was spot-on...

New York Times reported third-quarter digital advertising revenues of $58 million, up 17% from the same period a year ago. Digital-subscription revenues rose to $101 million, an 18% jump from the third quarter of 2017.

In short, digital advertising revenues and subscriptions are making up a bigger piece of the New York Times "pie" in an increasingly digital world.

Investors responded by sending shares up 7% to a fresh 12-year high. Readers who followed Porter and his team's advice are now sitting on gains of more than 50% in 11 months so far.

Finally, longtime readers know our colleague Dr. David 'Doc' Eifrig is a big fan of tax-advantaged retirement accounts...

He believes contributing to a 401(k) is one of the simplest, yet most powerful steps investors – particularly young investors – can take to put themselves on the path to a secure retirement. As he explained in his "Graduate's Guide to Wealth" he shared with Digest readers in August...

Always contribute to your 401(k) and maximize your employer match. We'd recommend starting your 401(k) even if you've got a little credit-card debt and before really tackling your student loans – at least up to the employer match.

It's free money. And I don't know anyone in his right mind who would turn down free money...

Yet it's becoming more apparent to me that folks entering the workforce have no clue about 401(k)s and seem oblivious to the advantages.

At my company, we match half of an employee's contributions up to 6% of salary. That means you put away 6%, but get 9% in savings. Even better, you get to put the money away before taxes. So in the end you could earn something like $1.70 for every $1 reduction in your paycheck. That's simply phenomenal.

These benefits become even greater over time, thanks to the power of compounding growth...

But Doc says even older investors should take advantage. Again, it's free money.

If there's one "catch" to these accounts, it's that the government sets strict limits on how much money you can contribute in any given year. For years, those limits have been $5,500 per person per year for individual retirement accounts ("IRAs") and $18,500 per person per year for 401(k)s.

Now, for most young folks, these limits aren't an issue. But for high-earners, those who have been working for some time, and those who simply want to save a larger percentage of their income, these limits can be restrictive.

If you're among these investors, we have a little good news...

This morning, the IRS announced it plans to increase these limits next year for the first time in five years. As the Wall Street Journal reported...

Taxpayers will be able to contribute $6,000 to their traditional individual retirement accounts in 2019, up from the $5,500 level in place since 2013, under inflation adjustments that the IRS announced on Thursday.

Participants in 401(k) plans will be able to set aside up to $19,000 before taxes next year, up from $18,500, the IRS said. The agency also announced other inflation-adjusted limits and income thresholds that apply to retirement and savings incentives.

One last thing...

Speaking of Doc, he asked us to pass along a quick message...

A brand-new version of his excellent report – Doc Eifrig's Best States for Your Retirement – is now available.

As Doc often says, choosing where to spend your retirement is one of the most important decisions you'll make... It can mean the difference between merely living out your retirement and truly enjoying it.

He and his team spent months gathering and sifting through the very latest data to give you everything you need to know to make the best decision possible.

Doc says it's by far their best, most complete guide yet. And best of all, you can get instant access to it – along with an entire year of his Retirement Millionaire advisory and several other bonuses – for just $19. Click here to get yours now.

New 52-week highs (as of 10/31/18): none.

In today's mailbag, we've got some early feedback on our new "Stock of the Week" feature... and several more folks weigh in on last week's Melt Up Event and our risk-management advice. Send your thoughts to feedback@stansberryresearch.com.

"I really appreciate this [Stock of the Week] feature. Thank you." – Paid-up subscriber Gary P.

"Thank you for the new 'Stock of the Week' feature. I am always interested in new features that are happening and one of them is 'Entry Signal.' Will wait and see what the future brings." – Paid-up subscriber Ed M.

"I can't even imagine the emails you guys get on a daily basis. The recent ones complaining about stocks being down and hitting stops and blah blah blah. The one guy who complained that he went all in on Steve's 'Melt Up'? Really? Gee, I wonder what he is saying today after a couple of up days! Is Steve now the hero?

"I saw my email response was published yesterday, and my, how performance levels can change quickly. My investment portfolios are now up 5% for the year and climbing... And yes, I have those 'hedge' positions that are down and some by a good amount (but haven't hit the recommended stops). Some of my Stansberry Venture positions are down as well.

"It's not like we haven't been told the risks involved and how to mitigate those across the landscape... Oh wait, that would require me to actually read the newsletter and take responsibility for my own choices and actions! What a concept! I am very pleased with everyone at Stansberry and can't thank you guys enough! Better performance. Better risk. Better sleep. Better life! Stansberry Research! Have a GREAT weekend!" – Paid-up Stansberry Alliance member Al B.

"I have been investing for several years and I am enjoying True Wealth Systems and the entire [Melt Up] package that was included. I ordered TradeStops premium this year and was thrilled to get another year for FREE!

"I followed Steve's allocation recommendations and set my TradeStops. I keep cash on hand to purchase other recommendations when the time is right. I sleep well at night, since my portfolios are not over allocated and I am well diversified. You have to take your emotions out of all your investing. Otherwise you are setting yourself up for failure..." – Paid-up subscriber Gary K.

"I'm sure glad I was able to attend Steve's Melt Up Event. I immediately set up another TD Ameritrade account and moved 1.2% of my portfolio into it and purchased all positions on Friday according to Steve's allocation. I was fortunate to get most at the low for the day and now after one week I am currently up 15%. Fantastic! What is really remarkable is that every position is up. I've got my stops in place with TradeStops, so I'm ready for any downturn. Thank you for your research!" – Paid-up subscriber Steve D.

"Do I want to hold a position at the start of the meltdown if it closes below stop during a 'normal correction'? While this is partly a leading question, I find it provides some useful perspective. Chances are, the positions I stop out of this correction would be some of the first to stop out when the meltdown arrives. Not a big deal if that's my TRADING plan; I'll stop out now, confirm a bottom and jump back in later if the confidence in the TRADE is there (and likely have a modified stop plan). Sure that might cost some gains overall, but it's cheap insurance in case that position – or the market – plummets instead.

"On the other hand, my long-term INVESTMENT money could be better used to average up my winning positions that pulled back without stopping out and buying only the strongest companies for new positions. Working for me so far... Looking forward to plenty of upside – without risking more downside than I signed up for." – Paid-up subscriber Jeff S.

"Greetings! Since this latest 'correction' started, I stopped out of two positions and was down a hair over three percent at worst, and today's market action so far has recovered about half of that. So yes, I am listening!" – Paid-up Stansberry Alliance member John C.

"Your comments this [week] regarding sticking to one's trailing stops surely came at the right time, as I compared the sell price of some 18 positions that hit their stops in the past 2 weeks, to today's prices, where 13 had increased. Frustrating, but then how would I feel if they had had further losses? Trailing stops are the only answer in this high volatility pull back. Thanks for your strong support for stops." – Paid-up subscriber Ron E.

"Justin, very timely discussion of stock market risk in the recent downturn. Much of the discussion has focused on allocation and trailing stops, but what I've found much more helpful in TradeStops is risk-based position sizing. It does require purchasing the $999 annual membership to TradeStops, but during the last two downturns I saved many times that amount.

"Stansberry readers often see the recommendation to put no more than 5% of a portfolio into any one position. However, using the same [risk-adjusted] strategy the Total Portfolio uses to determine position size is a far better position-sizing strategy, in my opinion. With a good diversification of stocks across sectors and industries, TradeStops Risk Rebalancer provides a convenient tool to rebalance a portfolio so more of the portfolio is allocated to the 'forever business' lower volatility stocks – like Porter's favorite, Hershey – and less is allocated to the higher volatility stocks.

"During the recent downturn, while the broader market was down near 10% from the previous high, my personally managed IRA and taxable portfolios were down less than 2%. The TradeStops risk tool gives investors a look at the overall volatility of a portfolio compared to the market. This measure is another objective way to determine relative risk during downturns. This is the most practical way I've found to be 'smarter,' as Dr. Smith says about TradeStops: earn more, risk less.

"Thinking in terms of how much money is at risk in each position rather than how much is allocated will hopefully help readers be smarter investors to allocate funds across the many well chosen Stansberry recommendations.

"Porter says it doesn't matter what you like to invest in, you can't do it without TradeStops. With the Pro membership to leverage the power of risk based position sizing, and a decent cash reserve in each account, I thoroughly enjoyed the recent buying opportunity the market handed me." – Paid-up subscriber Sherman T.

Brill comment: Thank you for the note, Sherman. Unfortunately, most individual investors put little to no thought into position sizing at all, so even a basic approach can be a vast improvement. But you're absolutely right... Taking the additional step of adjusting your position sizes based on the risk of each individual position is even better.

Folks who are interested in learning more about risk-adjusted position sizing can read the May 13 Digest. And of course, if you're interested in an easy, "one click" way to give it a try in your own portfolio, you can learn more about a subscription to TradeStops Premium right here.

Finally, we'll also remind you that a subscription to Steve Sjuggerud's new True Wealth Systems Melt Up Portfolio currently includes an entire year of TradeStops Premium – with the full suite of these powerful risk-management tools – absolutely free. If you're already considering trying Steve's service, this offer is truly a no-brainer. But it's only available for a few more days. Click here for the details.

"If you aren't selling investment advice, then what are you selling. Why do people give you 3 or 4 thousand dollars to join some service?" – Paid-up subscriber Bill B.

Brill comment: Bill, we think you've misunderstood. Of course we're in the business of providing investment advice. And frankly, we believe it's among the best you'll find at any price. However, as a financial publisher, we're prohibited by federal law from providing individual investment advice – that is, personalized advice about what you or any individual subscriber should or shouldn't do with his money.

Regards,

Justin Brill
Baltimore, Maryland
November 1, 2018