The Second Part of Our Annual Review

The second part of our annual review... Who got the highest marks?... The impressive turnaround for Stansberry's Big Trade... Last year's volatility hurt our Portfolio Solutions products...

Editor's note: We kicked off our annual review yesterday with the grades for our monthly newsletters. If you missed that issue, you can read it right here. Today, we'll wrap up the 2018 Stansberry Research Report Card by grading our trading services, specialty publications, and Stansberry Portfolio Solutions products...

Income Intelligence: B+

Year after year, we urge readers to allocate a portion of their portfolio to income investing.

Unfortunately, as we noted yesterday, many folks only want the hottest tip... a stock that they think will soar hundreds – or even thousands – of percent soon after they buy it.

Serious investors know that isn't realistic... Instead, they should focus on finding ways to safely and steadily grow their wealth. In Income Intelligence, Dr. David "Doc" Eifrig does that... He shows his subscribers some of the safest ways to generate steady income.

Doc diversifies his recommendations across different types of securities – including high-yielding stocks, bonds, preferred shares, and real estate, just to name a few. And he does it with securities that are easy for everyone to buy through their regular brokerage accounts.

Doc's big winners during the grading period included an 86% gain on pharmaceutical giant AbbVie (ABBV), a 40% gain on natural gas transportation company Spectra Energy (which is now owned by Canadian firm Enbridge), and another 40% gain on international apparel firm VF Corporation (VFC).

In addition to a new recommendation each month, Doc also provides subscribers with detailed analysis and easy-to-understand charts and tables. His "Income Investor Dashboard" puts a variety of tools in one place to help you become a better investor...

Doc's indicators – including the "Inflation Monitor," the "Yield Corner," and the "Income Market Overview" – show subscribers which opportunities exist for income investors at any time. These insights and value are alone worth more than the price of the product.

Before today, Doc had earned an "A" or better for his performance in Income Intelligence during every year since we launched the product back in 2012. And with average returns over the period coming in at 6.3% - beating the benchmark by more than a full percentage point - some folks will argue that he deserves an "A" again this year.

But the past year hurt Doc's win rate in Income Intelligence... It dropped to roughly 56% for the selected three-year period. Remember, as we said yesterday, for this year's report card, we graded the publications from January 1, 2016 through December 31, 2018.

In order to hand out an "A" grade, we want to see a win rate of more than 60%.

Stansberry's Credit Opportunities – Bonds: A

I've said time and time again that I (Brett Aitken) believe Stansberry's Credit Opportunities is among the best research we publish. For those who aren't familiar with the product, a quick refresher...

In Stansberry's Credit Opportunities, editor Mike DiBiase and analyst Bill McGilton recommend high-yielding corporate bonds that trade at a discount to "par value."

Don't let the jargon scare you...

Just know that par value is the price at which the company issues the bond – normally $1,000. The company must pay back that amount in full, along with interest payments along the way – or it will default.

Since the outcome is binary – meaning, the companies either pay you or they don't – and because you can often buy some of these bonds at a substantial discount... you can also make capital gains that can really boost your overall returns. The goal in Stansberry's Credit Opportunities is to identify those chances to make steady, double-digit returns.

One of the biggest challenges is helping subscribers understand that they can make more money using this strategy over the long run than they can buying most stocks.

Consider this example...

In February 2016, Mike and Bill recommended a bond from energy firm Forum Energy Technologies (FET) that came with a 6.25% coupon. Instead of paying par ($1,000) to buy the bond, they recommended it when it was trading at a significant discount – around $754.

They closed the trade in January 2017 – just 11 months later – with the bond trading at about $1,026. Including interest, they booked an impressive 44.5% gain on this position.

Overall, Mike and Bill have beaten the benchmark with their bond recommendations...

In the three-year grading period, the Stansberry's Credit Opportunities team recommended 23 bonds. Including open and closed positions, the publication's win rate is nearly 70% And it has realized an average gain of 4.2%. The average holding period is 302 days... resulting in an annualized gain of 5.1%. That beats the benchmark by 130 basis points (1.3%).

But these results also conceal an important part of the strategy...

You see, including open positions can penalize a bond portfolio. Remember, once you buy a bond, its market price is largely irrelevant. So long as the company remains solvent, it will pay off its principal at maturity and its interest payments along the way.

In other words, as long as the open positions currently in the red don't go bankrupt – and we have no reason to believe they will – those positions will return the expected gains at maturity.

If you just look at the 15 closed positions, those recommendations resulted in an 80% win rate, an average gain of 10.7%, and a 250-day holding period. That's an average annualized gain of 15.7%... which nearly doubles the benchmark.

Now, we should be clear...

The current market isn't offering as many opportunities as we'd like to capitalize on this strategy... yet. But when the credit market gets ruffled – and it will – you can bet Mike and Bill will find plenty of trades just like that in the years to come.

We launched this product in late 2015 as we prepared for the credit market to roll over. When that happens, we will see a wave of downgrades in corporate debt that will force bond prices across the board to fall significantly. I know Mike and Bill are ready for that...

That's when they will find real bargains. And that's when this publication's results will soar... As the bonds recover from their lows, Stansberry's Credit Opportunities subscribers who follow the advice from Mike and Bill will be paid back in full and realize significant gains.

Stansberry's Credit Opportunities – 'Golden Triangle' Stocks: F

In 2017, the exhaustive bond research we do in Stansberry's Credit Opportunities led us to discover an unusual phenomenon...

It turns out, you can periodically find companies whose stocks have sold off dramatically, but whose bonds still trade at relatively high prices (near face value of $1,000).

Essentially, these companies have run into some kind of trouble that spooked stock investors. But the bond investors – who delve more deeply into the companies' finances – view the problem as a passing storm. Our research showed that more often than not... the bondholders were right. The company recovered, and the stock prices rebounded – in general, over the next two years and beyond.

So in late 2017, we started recommending the stocks of companies in this situation. We began supplementing our bond recommendations with a portfolio of these stocks. We call them "Golden Triangle" stocks after the pattern the stocks create when they rebound.

Unfortunately, volatility returned in 2018, and the market disagreed with our strategy...

You see, while we believe investors have overestimated the problems with these stocks, the fact remains that the market views them as flawed. So when the broad market begins to sell off, these are among the first stocks that investors dump.

From the time we implemented this strategy in late 2017 through the end of 2018, we made 11 Golden Triangle recommendations. With a low win rate of 18% and an average loss of 22.5%, an "F" grade is most appropriate for this strategy so far.

But as always, we need to provide some context...

When we back-tested this strategy, we saw that it took at least two years, on average, for these situations to play out. We're only about a year into using this strategy, so we might not have lived through a long enough period to know if they'll ultimately play out or not.

While five Golden Triangle recommendations triggered their trailing stops, several of our positions remain open today. We will keep a close eye on how these positions perform in the coming months before we draw any final conclusions on this strategy.

But you can expect us to ease off this strategy until the environment improves for these kinds of speculations... and the odds of recognizing a "double" over the following two years are overwhelmingly in our favor.

True Wealth Systems: C

This product is essentially powered by a computer version of Steve Sjuggerud...

Several years ago, Steve and his team spent millions of dollars to develop systems that can continuously track dozens of different markets and statistics. These computers allow Steve and his analysts to quickly identify particular markets that offer the best opportunities to profit... From there, the team looks for the best way to make money from that idea.

In the all-out bull market of 2016 and 2017, Steve earned double-digit gains with Brazilian stocks (56%), and Japanese small-cap stocks (48%). Subscribers who followed his advice could have also booked a huge 109% return on PNC Financial Services (PNC) warrants.

This product performs best when markets are trending higher. But if things get choppy, it can trigger the stop losses on the positions before the idea has a chance to fully play out...

In 2018, Steve's model portfolio suffered as volatility returned to the markets. As a result, his average gains in True Wealth Systems for the three-year period took a hit... Steve's three-year win rate in the publication came in at 50%. He averaged a 5.8% gain for an annualized return of 11.3%. Those numbers didn't beat the benchmark in that span.

True Wealth Opportunities: China: A+

Regular readers know the Melt Up isn't Steve's only major market thesis...

A few years ago, Steve saw a tremendous opportunity developing on the other side of the world – in China. The world's most populated nation has grown into its second-largest economy. It has enjoyed more than two decades of high-single-digit – and sometimes, double-digit – growth in GDP. Despite that, few people outside the country invest there.

But Steve knew that was about to change...

He believed more than $1 trillion would flow into Chinese stocks in the coming years. As a result, he launched this publication in September 2016 to take advantage of the situation...

Since then, Steve has made 29 recommendations. He has booked one triple-digit winner and several other double-digit gains. He has a massive win rate of 72.4%, an average return of 20.3%, and an average annualized gain of 12.2%. Steve's performance is even more remarkable when you consider Chinese stocks fell more than 25% in 2018.

It's clear he deserves an "A+" grade for this publication.

We're thrilled with what Steve has done...

We aren't just talking about his impressive results, either... Steve has taken this service to another level by inviting subscribers to join him on trips to China. He continues to develop his network of sources there. Last year, Steve hosted a special conference... And he's doing it again this May. You can learn more about this once-in-a-lifetime opportunity right here.

Stansberry's Big Trade: B

As the saying goes... What a difference a year makes.

In November 2016, we launched Stansberry's Big Trade to take advantage of what we saw as an end to the credit cycle and looming problems in the debt markets. We wanted to capitalize by placing small bets through buying long-dated, "out of the money" put options.

And as it went, we were early. The strategy struggled at first... You might recall that I gave the publication the only failing grade in last year's report card.

But we also said not to give up on the strategy. As we said at the time...

We hate losses as much as anyone. But as with all cycles, we continue to believe that a downturn is coming. So we keep the bigger picture in mind... When the market drops, these stocks will fall much harder. And when they do, the put options will soar.

A lot of you probably thought that was a bit of face-saving puffery for the service. But look at what happened... When volatility returned to the markets, the strategy paid off.

In fact, throughout 2018, new editor Bill McGilton knocked it out of the park with a 90% win rate. You read that right... ninety percent.

It's exactly the type of dominating outperformance we set out to achieve with this strategy. By placing several small bets that soar during a market sell-off serve as "insurance" for the rest of your portfolio... You help offset any losses you incur on your long positions.

The volatility certainly helped Bill's impressive turnaround... In 2017, the S&P 500 soared more than 20%. It's hard to place bearish bets as the overall market skyrockets higher.

But Bill also worked to perfect the strategy...

He switched up some of the vulnerable companies in his sights... And he went further out with the expiration dates of the put options to give his trades more time to play out.

Throughout the year, Bill booked several double-digit winners – including a 91% gain on natural-gas producer Chesapeake Energy (CHK). Plus, he booked a triple-digit gain on struggling retailer JC Penney (JCP). And at the end of 2018, with the S&P 500 selling off nearly 20% from its high a few months earlier, he was sitting on four triple-digit winners.

Still, our report card considers all trades – not just the ones made over the past year. And unfortunately, subscribers who followed the advice in the publication booked several 100% losers in 2017. That certainly tempers the excitement associated with last year's results.

Our combined results for the period resulted in a 50% win rate and an average gain of 0.3%. In other words, the performance was flat. Meanwhile, the benchmark lost 5.6% in that span.

We're giving the Big Trade publication a "B" because of the tremendous turnaround. It's refreshing to see this product now doing the job we intended... offering protection for investors in the case of a broad-market drop. If you spent some sleepless nights as the market tanked... you might want to consider adding Big Trade to your investor toolbox.

Stansberry Alpha: B

Similar to Big Trade, the strategy in Stansberry Alpha involves the options market.

Specifically, editor Alan Gula looks to exploit an anomaly that exists from time to time. Most investors can't fully understand this strategy, so let me give a quick overview...

To put it simply, when they're scared, investors will tend to pay more for loss protection than they will pay for the opportunity to see more gains. When markets sell off like they did late last year, fear rises... and the premiums on put options soar. (Remember, that's why the Big Trade strategy did so well.) In Alpha, we want to sell puts when fear is at its highest level.

And there's another part of the equation... When the market is declining, the price for call options also declines... meaning you can buy calls at a cheaper price than normal.

In Stansberry Alpha, Alan shows subscribers how to collect the premium from selling a put on a specific stock and using part of it to buy a long-dated call on the same stock. The goal is to always end up with a net credit – meaning subscribers get paid to open the trade.

Now, if the underlying stock continues to decline below the strike price of the put, you could get put the stock. But that's OK because Alan only recommends selling puts on his highest- conviction ideas – stocks you would be happy to own for the long haul anyway.

And if the stock soars higher, the call options become worth a lot more. That boosts the overall gains on the trade. It's a way to participate in any upside in the stock as well.

As I said, the key is to make these trades on stocks you want to own anyway. Once you've completed one or two Alpha trades, you'll wonder why you haven't always traded that way.

We launched this product in 2014. And it consistently features a win rate of more than 60%. Because of that, Stansberry Alpha has earned a "B" or higher in every report card.

Alan has continued this success since taking control of the publication in the past couple of years. During the grading period, he booked a 153% gain on margin with Warren Buffett's Berkshire Hathaway (BRK-B), a 176% gain on margin with iconic clothing brand Ralph Lauren (RL), and a massive 203% gain on margin with discount retailer Dollar General (DG).

Overall, Stansberry Alpha subscribers have seen a 61% win rate over the past three years. If they followed the advice in the publication, they would have realized an average return on margin of 12.6% (2.5% on capital at risk) and an annualized gain of 16.2% (3.2% on capital at risk). It's the type of performance we love to see from this service.

DailyWealth Trader: C

DailyWealth Trader publishes every day the stock market is open.

Each morning, editor Ben Morris and analyst Drew McConnell provide subscribers with their market insights, commentary, and educational material. They highlight the latest industry trends, explain their technical analysis, and issue regular trading recommendations.

In this publication, Ben and Drew trade stocks and options. They make long and short recommendations. They also have other strategies in their toolbox – like "pairs trading" and using different spread trades to capitalize on how the market is performing at any moment.

During the three-year grading period, Ben and Drew made 226 trades. And they closed 135 of the positions for profits. That's a solid 60% win rate. Their trades averaged a 1.1% gain – and 2.9% annualized. It's a lot of activity for low annualized returns. As a result, Ben and Drew earn a "C" this year.

One thing to note...

Ben's winning percentage on option trades surpassed 72%. And his annualized gains of 1.9% on those trades beat the benchmark by 50 basis points (0.5%).

It's not easy to consistently produce winners when you're making such a high number of trades – like Ben and Drew do in DailyWealth Trader. I'd encourage them to consider a little less trading to raise their average gains. That's what they did last year and earned a "B."

Retirement Trader: A+

Once again, Doc earns an "A+" for his high-quality trading service...

For more than a decade, Doc has shown subscribers how to make safe bets in the options market to generate steady flows of income. He does this primarily by selling covered calls or selling puts. By doing that, Doc helps his subscribers to earn small amounts of income on his high-conviction ideas – the best companies in the world.

And nobody uses this strategy better than Doc does...

He hits single after single, pushing his batting average to Hall of Fame levels... During the three-year reporting period, Doc produced an incredible 98.6% win rate.

Doc led his subscribers to a 15% profit with Qualcomm. And he produced another double-digit winner with the SPDR S&P Biotech Fund (XBI). That's impressive for options positions that typically aren't open more than a few months... Doc's average holding period for this publication came in at just 114 days. Think about that for a moment...

Doc finds ways to earn small amounts of income on some of the biggest, safest stocks on the planet. And he has shown his subscribers how to do it successfully for a long period of time. It's like the rent checks just keep on dropping into your account. It's brilliant.

For those who say that trading options is too risky... I'd urge you to give Doc's strategy a try. The results speak for themselves. You can expect to receive lots of small payments – month after month year after year. If you want to trade options for income, you simply must follow Doc and his team.

I don't hand out "A+" – or "A++" – grades easily. You must do something special to earn them. With a near perfect win rate over the period – during which volatility returned – we applaud Doc's results.

NewsWire Premium: D

In early 2017, we hired Scott Garliss – a former Wall Street trader – to head up the Stansberry NewsWire team. A team of analysts supports him... including John Gillin – another former Wall Street trader. With NewsWire, we aim to offer real-time market commentary as a supplement to our Stansberry Portfolio Solutions products.

The feedback we've received – especially when volatility returned to the markets – has been incredibly positive. If you're a trader or simply want to follow along with their intraday commentary, you should download the NewsWire app. It's free. (You can get the iOS version here and the Android version here.) Or you read it on our website. We're thrilled to offer this type of content as part of our inventory.

Midway through 2017, Scott and John started offering trades for subscribers who want to pay for their actionable advice. They mostly look for opportunities to make short-term bets in the options market.

Since joining us, they have an impressive 72.6% win rate. Unfortunately, a couple of expensive mistakes cost them dearly... giving them an average loss of 1.2%, leading to an average annualized loss of 13.8%. The benchmark had a 10% gain over the same span.

However, we believe we've identified where they went wrong. That should ensure that they don't repeat the same mistake. But we can't undo what's done... The high number of winning trades couldn't offset the expensive losers, so they're getting a "D" grade.

We know Scott, John, and the rest of the NewsWire team will be disappointed with that. But we also know they've raised the bar. So we look forward to better grades in the future.

Stansberry Gold & Silver Investor: C

We launched this product in April 2016, so it's just shy of a full three-year grading period.

In the beginning, we provided subscribers with a diversified, well-balanced portfolio to help them realize substantial returns during the next bull market in precious metals... while also protecting them if the price of gold didn't move higher as soon as we expected.

And while gold has failed to take off as we hoped, editor Bill Shaw has done a fantastic job managing this publication. He provides subscribers with "boots on the ground" research... traveling the world to meet with mining companies, talk with the leading experts, and to tour various sites. Bill has traveled as far away as Russia and Chile. He regularly visits the "mining capital of the world" – Vancouver, Canada – as well as many locations in the U.S.

In Stansberry Gold & Silver Investor, we measure the weighted "Hard Rock Portfolio" against the VanEck Vectors Gold Miners Fund (GDX). This exchange-traded fund holds a portfolio of nearly 50 gold-mining stocks. Its holdings include gold majors Barrick Gold (GOLD) and Newmont Mining (NEM), as well as several other smaller companies.

From inception through December 2018, our Hard Rock Portfolio returned 3.9%. That means it underperformed its benchmark for the first time. As commodities sold off over the past year, most of our positions in the portfolio took a hit. As a result, the publication's average gain and win rate slid from the lofty returns we saw last year that earned it an "A" grade.

Because of that, Stansberry Gold & Silver Investor earns a "C" this year. But in the long run, we're confident that this approach will produce several double- and triple-digit winners as the next leg of the precious metals bull market kicks into gear.

We're already starting to see signs of life in the gold sector...

The precious metal is up roughly 14% from its August 2018 bottom. And Bill's most recent recommendation has already gained 45% since he shared it with subscribers in January.

We expect to see this grade return to an "A" in the coming years. If you don't already hold any gold or gold stocks in your portfolio, we encourage you to consider doing so. And the Hard Rock Portfolio is the safest way to play it without giving up any of the upside.

True Wealth Systems' 2017 'Melt Up' Portfolio: A-

Steve added value for his True Wealth Systems subscribers in August 2017...

That's when he launched the first "Melt Up" portfolio.

Steve designed the "one-year only" portfolio around his thesis that we're heading into the final stages of this nearly decadelong bull market. Regular readers know that Steve believes we'll see a final blow-off top as stocks churn higher before the next bear market arrives.

We've seen this happen several times in the past...

Between 1998 and 2000, the tech-heavy Nasdaq Composite Index gained more than 250%. Internet "plumber" Cisco (CSCO) – one of the tech darlings of the time – rose more than 550%. Telecom-equipment maker Qualcomm (QCOM) soared an incredible 3,500% in less than 18 months – from a low of about $2.50 per share to more than $89 per share.

In August 2018, Steve closed the initial Melt Up portfolio with an impressive 29.8% average gain. Over the 12-month period, Steve placed 10 different positions in the portfolio.

Of course, they didn't all turn out to be big gainers. But true to his form, Steve cut his losers short and let his winners run. The biggest gain (156%) came from Grubhub (GRUB) – one of the companies that's currently disrupting the food-delivery industry.

And while Steve came up short in his daunting task of shooting for a double in just one year, his average gain of nearly 30% is simply outstanding – especially considering the true Melt Up has not yet materialized. With his average gain, Steve crushed the benchmark.

Normally, we wouldn't consider grading publications with less than a year in their track records. It generally isn't enough time to see the complete picture. But because Steve only intended for this product to have a one-year holding period, we're making an exception.

Astute readers will also argue that I'm breaking my own rule about win rate. Here's why...

First, please know that we never said you should put all your money into Steve's Melt Up portfolio. Speculations like this should only make up a small part of your investment capital.

That way, if the advice is right... you get to participate in the Melt Up. But if it's wrong – or if the timing is just off... the small position size you allocate to this strategy should not hurt you. Like all speculations, you should never allocate more than you are willing to lose.

If it keeps you up at night to see positions going against you, you've probably allocated too much to the strategy. If that's the case, reduce your exposure. Please keep that in mind.

Second, the important thing to remember is that this was a weighted portfolio with a specific goal in mind. It wasn't a list of monthly recommendations like our traditional publications. With our monthly recommendations, we can't know which – or how many – individual recommendations our subscribers will follow. So it's critical to know how likely any one position is to profit for subscribers.

With products like the Melt Up portfolio, the explicit strategy is to buy the whole basket of investments... or none at all. The stocks and funds are chosen to complement each other.

The risks of one stock are balanced against the stability of another. So it matters less how each position performed. What's important is the return that the entire portfolio generates.

In my book, a win rate of 50% and an incredible 29.8% average gain in just 12 months – outperforming the benchmark – deserves an "A-" grade.

And Steve is trying this strategy again...

Last October, he launched a new Melt Up portfolio of stocks. As the markets plunged in the final quarter of the year, the portfolio suffered. But he remains bullish on his thesis. And the portfolio has bounced back so far in 2019. We'll see how it plays out for the rest of the year.

The Capital Portfolio: C
The Income Portfolio: C+
The Total Portfolio: C-

When we launched Stansberry Portfolio Solutions in February 2017, these products were unlike any of our traditional newsletters and trading services.

Throughout the year, the investment committee (Porter, Doc, Steve, and Portfolio Manager Austin Root) cull the best ideas from our various publications and put together a diversified, weighted portfolio. They give details on each recommendation – including exact position sizes, allocations, and exit strategies. It's an excellent product if you're looking for a "one-stop shop" to understand how best to use all our recommendations and advice.

The Capital Portfolio is designed to maximize capital appreciation. It's our most aggressive portfolio. To assemble this portfolio, we take ideas from Stansberry's Investment Advisory, True Wealth, Retirement Millionaire, Commodity Supercycles, Extreme Value, and Stansberry Gold & Silver Investor. It normally holds about 20 total positions.

The Income Portfolio includes access to everything you get with The Capital Portfolio plus Income Intelligence and Stansberry's Credit Opportunities. It holds a mix of dividend-paying stocks, high-yield bonds, and hybrid stock/bond securities. We aim to provide investors with low-risk ideas that earn income and can lead to capital gains. It holds around 30 positions.

And finally, The Total Portfolio takes everything from the first two portfolio products and investment ideas from all our other publications to offer investors an "all-weather portfolio." We include a few noncorrelated hedged and short positions to protect on the downside. At any given time, you can find up to 40 positions in The Total Portfolio.

We're only two years into this new endeavor. But we want to share how we've done so far...

In 2017, the S&P 500 soared 19.3% from February 1 – when we launched the product – through the end of the year. And every portfolio product earned an "A" grade or better.

Unfortunately, last year's volatility hurt our performance with these products...

The Capital Portfolio's aggressive style worked well as stocks churned higher in 2017. But the approach worked against us last year...

Although subscribers who followed our advice in the portfolio realized gains of nearly 30% with Grubhub and 6% with online retailer Amazon (AMZN), we didn't have enough winners to keep our heads above water overall. It didn't help that we bet heavily on China... While the S&P 500 fell less than 10%, as we said earlier, Chinese stocks plunged more than 25%.

As you can tell from our earlier write-up of True Wealth Opportunities: China, we still believe that the country offers a huge opportunity for investors in the coming years. But our timing and the size of the positions we allotted to this idea hurt us throughout last year. We'll do a better job of limiting our exposure to any single market or sector moving forward.

With The Capital Portfolio, our win rate dropped from 75% in the first year to 40% over the two-year period. Our average loss in 2018 came in at 19% – bringing the average gain for the grading period to 2.2%. For these reasons, we're giving The Capital Portfolio a "C."

Meanwhile, The Income Portfolio performed the best of the three portfolio products... Over the two-year period, we saw a 53.8% win rate and an average gain of 5%. The portfolio also generated a 5.2% annualized income yield over the two-year period.

When markets get choppy like they did in 2018, a solid income portfolio can help. Highlights during the grading period included 24% and 11% gains, respectively, on a pair of real estate investment trusts – Realty Income (O) and Blackstone Mortgage Trust (BXMT).

But we lacked enough big winners to offset the losing positions...

While a 5% gain is better than losing money... The Income Portfolio underperformed the benchmark. As a result, we've given this portfolio a "C+" grade this year.

With some tweaks to our strategy to ensure better performance from some of the dividend-paying stocks, we expect to see these results improve this year and beyond.

As mentioned, we designed The Total Portfolio to perform in all market conditions...

While the hedges might drag a little on our overall performance in a bull market like 2017, we expect those same hedges to help us when things turn south like they did last year.

At various points throughout the year, we held a larger-than-normal position in cash. And our short positions did their job... Unfortunately, we also bet heavily on China in this portfolio. Weakness in the homebuilding space also hurt our overall performance.

Aside from those setbacks, a couple of positions that we expected to do well in the Melt Up environment performed poorly. Some of these positions could still play out over the long run... But in the short term, they weighed on The Total Portfolio's overall performance.

And as I mentioned yesterday, commodities have been in a brutal bear market for several years now. While we're bullish moving forward, these stocks took another beating last year. Our positions were small in this space... but they also brought down our overall performance.

For the two-year period, the win rate of The Total Portfolio equaled 43%. And the average return of 4.5% underperformed the benchmark during the grading period. But with some tweaks to our strategy, we expect to see improved results moving forward.

In the meantime, we're giving The Total Portfolio a "C-" grade this year.

Bull markets don't die of old age...

But with the current one, it's clear that we're closer to the end than the beginning.

Steve remains bullish on his Melt Up thesis. Other Stansberry Research editors and analysts remain bullish, yet they've become more cautious. And others are more bearish overall.

Even when you're cautious, we still recommend buying stocks. Opportunities to profit will always exist. No one can predict with 100% certainty when the bull market will die and a bear market will begin... And we always want to have some exposure to the stock market.

So as always, we recommend you remain invested in the markets. All we stress is that you invest wisely. Now, more than ever, it's important to watch the different sectors closely, allocate correctly, and mind your trailing stops. That's what we do for you in Portfolio Solutions.

With all that said, we've come to the end of our 2018 report card.

In case you're wondering about grades for Ten Stock Trader, Stansberry Innovations Report, True Wealth Opportunities: Commodities, American Moonshots, Advanced Options , and the latest iteration of the Melt Up portfolio that launched in October 2018, we consider these publications too young to have any meaningful track record. Rest assured, we'll add them to the mix next year.

As always, thank you for joining us again at Stansberry Research. You – our subscribers – allow us to do what we love. We never take the trust you place in us for granted.

New 52-week highs (as of 2/21/19): CBRE Group (CBRE), Hershey (HSY), Kirkland Lake Gold (KL), Kinder Morgan (KMI), MarketAxess (MKTX), Nestlé (NSRGY), Nuveen Municipal Value Fund (NUV), New York Times (NYT), Polymetal (LSE: POLY), Sandstorm Gold (SAND), and T-Mobile (TMUS).

Now, tell us how we did. If you don't agree with our grades, drop me a note. I promise I will read them all. As always, send your e-mails to feedback@stansberryresearch.com.

Good investing,

Brett Aitken
Baltimore, Maryland
February 22, 2019