The Weekend Edition is pulled from the daily Stansberry Digest.
Five cyclical trends are at – or creeping closer to – major inflection points…
At the top of the list, I believe the Great Bull Market that started in March 2009 is drawing toward a close… Plus, the growth/value cycle, the emerging markets/U.S. stock cycle, and the commodities/stocks cycle are all reaching their turning points.
But in today’s essay, I will outline how to prepare for the last trend hitting a crucial moment – and the biggest issue looming over us right now… inflation.
It’s here. And it’s going to get worse before it gets better.
I’ve recommended many times that investors should hold a truly diversified portfolio to protect their capital in any market environment. The basic elements of this are:
First, let’s discuss the last three components of that list…
Then I have several thoughts about the kind of stocks you want to own in preparation for whatever lies ahead.
Cash is the ultimate diversifier among all your portfolio assets…
The 2008 financial crisis taught us not to trust anything priced in dollars as a hedge against dollar-denominated assets… The dollars themselves are the only real hedge.
Cash is like oxygen… Nobody thinks about it until they don’t have enough of it. Then they can’t think about anything else.
Too many folks sell out their entire portfolios at the wrong moment when a downturn hits.
Holding plenty of cash gives you the confidence you need to avoid such a catastrophic loss. Cash is a great medium of exchange. It’s real money.
You can count on cash to maintain value over short periods of time. But it’s a lousy long-term store of value…
For that, we turn to gold. The precious metal has been an excellent long-term store of value for thousands of years… And that’s unlikely to change for thousands more.
Gold appears to be underperforming as inflation has risen significantly over the past year. However, long term, it has been roughly a 50-bagger since 1971 when it was officially detached from the U.S. dollar.
I also recommend holding some silver. Like gold, it has been around for thousands of years. And since its 1971 low, it has been a 17-bagger. Silver has also soared to two breathtaking cyclical spikes, one in 1980 and another in 2011.
It wouldn’t surprise me if we saw another spike within the next decade.
Bitcoin is new ‒ less than 14 years old. It has been a good store of value in its short life – as long as you are able …….