As the Market Hits New Highs… We’re Prepping for the Downturn

We’re not celebrating the new all-time highs for the S&P 500.

If you subscribe to my publications, you know that we’ve enjoyed some great gains this year. And the market’s rebound after the December crash has been strong. But it won’t continue forever…

That’s why I’ve been very cautious about the types of opportunities that I’m recommending my subscribers buy today, and why I plan to remain that way until we see a pullback. In late February, I told Retirement Trader subscribers…

So far this year, the S&P 500 is up 10.7%. That is a normal year’s worth of gains in two months. Clearly, this level of growth can’t keep up. If it did, the market would return 75% for the year.

That’s not going to happen. The biggest prior one-year S&P 500 move was a 45% gain in 1933, following the Great Depression.

Still, investors of every stripe read the recent movement of the market and extrapolate it. If the market has risen, they are bullish. If it has fallen, they are bearish.

Since then, the market has climbed further, but it has slowed. It’s up about 16.5% year-to-date – taking us down to around an annualized 40% pace. But we expect it to slow further in the months ahead…

It simply can’t keep up this pace. And we’re likely headed for another downturn in the market soon. 

For the past several months, I’ve been warning readers to start getting defensive in their portfolios.

That doesn’t mean we’re “selling everything.” That sort of all-or-nothing thinking is never the right choice.

Rather, now is the time to keep your money in investments that let you sleep well at night… like income-paying, blue-chip stocks. And you should also reduce your risk by moving some of your capital to cash and cash-like investments.

Are you a bull or a bear? Let us know at [email protected].

Q: You recently said to start worrying about stocks over the next year. What do you mean by calling gold a “chaos hedge”? (I’m an investing newbie obviously.) – N.V.

A: I always recommend that investors spread their money between a few asset classes. You should be invested in stocks, fixed income, cash, and chaos hedges. Chaos hedges are protection for when things in the economy get really bad.

Keeping your wealth stored in a diversified mix of investable assets is the key to avoiding catastrophic losses.

Chaos hedges are assets like gold, silver, and even farmland. Gold is the quintessential “chaos hedge.”

Gold outperforms many other asset classes during times of great economic and political stress. That’s why I think every investor should own some gold.

If you want to add gold to your portfolio, you can buy physical gold. The quickest and easiest way to get direct exposure to the price of gold is through SPDR Gold Shares (GLD). The fund holds actual gold bullion in a London vault and tracks the price of gold well.

Q: I recall a publication where you shared your thoughts regarding statins, but I’m not sure where to find it. Can you find that? – R.J.

A: We’ve railed against statins for years in the Health & Wealth Bulletin. Here are just a few of the times we’ve addressed statin dangers…

And in my March issue of Retirement Millionaire, available only to my paid-up subscribers, I tackled the real problem with statin drugs… For many people, taking them is a life sentence of pain, memory loss, and worsening health.

Not only are they overprescribed by doctors who just want to throw pills at you – they carry serious side effects that you need to understand. In fact, these side effects are so bad that the vast majority of people who start a statin prescription will quit within the first year because of the side effects.

But I understand that it’s not easy to say no to your doctor when they say that you should start this “pill a day” habit. That’s why I also gave my subscribers a list to help them discuss their real heart disease risk with their doctors.

With more than 200 million prescriptions for statins written every year, chances are that you or a loved one take these drugs. This is a must-read issue for every American aged 40 or older.

If you aren’t currently a subscriber to Retirement Millionaire, I think you’ll find this information very valuable. Click here to learn more.

Q: I am your regular reader. I wanted the way to find best doctors in the town, specialty-wise. Kindly send me the link to find? Thanks – P.J.

A: The easiest way to find a doctor that takes your insurance is to log onto your insurance company’s website. Then you can find out which hospitals the doctor has visitation in – then check ratings here.

And always make sure to check out the boards. Board certification is critical for any practicing physician. Find out about your new doctor’s certifications right here.

We also recommend using a program like Administrators in Medicine to find any claims or disciplinary actions against your doctor. You can find more on that here.

And if you’re wondering if a drug company is paying the doctor, visit https://projects.propublica.org/docdollars/.

If you’re ready to ditch your doctor, read more on how to do that here.

What We’re Reading…

Here’s to our health, wealth, and a great retirement,

Dr. David Eifrig and the Health & Wealth Bulletin Research Team
April 26, 2019