It's a danger that Ronald Reagan once called "as violent as a mugger, as frightening as an armed robber, and as deadly as a hitman."
I'm talking about inflation.
Every economics class in the world has covered inflation, but few people understand it. Inflation is mysterious, complicated, and hard to predict.
But when inflation strikes, it affects us all... It reduces the value of money. When prices rise too high, it's not good for the economy, as it leads to lower growth. It hampers those who live on savings and generate wealth from income.
If you're thinking about retirement, inflation is one of the main words on your mind.
Ask some retirees why they've gone back to work recently, and they'll likely tell you things are just too expensive.
I sounded the warning bell on raging inflation back in 2021. But lots of folks didn't pay attention... Stocks were doing well, and lockdown restrictions around the world were loosening up as folks got vaccinated... Everything seemed to be getting better.
Today, prices on almost everything are up, the Federal Reserve keeps raising rates to fight inflation, and stocks are having a bumpy year.
I want to show you what to do now, because if you understand the situation happening in the markets and economy... it's a massive opportunity.
Yesterday, I sat down with Stansberry Research's director of research Matt Weinschenk to talk about...
- What comes next for your money...
- The huge opportunity that's only available today because of this inflation mess...
- And a series of investments that could pay you 20% per year, in perpetuity.
If you set up this system we discussed, a handful of investments today could fund your entire retirement.
I'm not talking about cryptocurrency, special purpose acquisition companies ("SPACs"), or anything complicated. These are easy-to-understand, quality investments.
But the key is: You have to set this up now. The opportunity is now, and it is going to disappear in the coming months.
Now, let's get into some of the things you've had on your minds this week. As always, keep sending your comments, questions, and topic suggestions to [email protected]. We read every e-mail.
Q: Doc, when you talk about reinvesting your dividends, how do you recommend doing that? Some places offer DRIPs. Is that better than using your broker? – C.D.
A: For readers who aren't familiar, DRIP stands for "dividend reinvestment program." Created decades ago as a way around expensive brokerage commissions, DRIPs allow individuals to buy into companies without going through traditional Wall Street firms.
A DRIP lets you buy shares and reinvest dividends without a broker. Instead, most companies farm out the administration of their DRIPs to a third-party company, called a "share registry." These companies act as a transfer agent between you and the company you want to purchase shares from.
Even though you're skipping the broker, the shares still trade the same way. And if you elect for reinvestment, your dividends will be reinvested to buy more shares.
But the main downside of establishing this type of DRIP is the cost. Lots of companies that offer DRIPs require minimum purchase amounts and fees on top of that. For example, a DRIP through Walmart (WMT) requires a $250 initial deposit and a $20 account setup fee just to get started. You'll also need to pay another $20 when you want to sell your shares. These are costs you don't need to worry about with most online brokers.
So while a DRIP gets you away from traditional brokers, it will cost you... without much benefit. You can tell your broker to reinvest shares automatically, or you can use your dividend money to buy shares yourself. With an online broker, either of these options is flexible and free.
Q: Asking the expert – is red wine really better for you than white? – M.M.
A: Both red and white wines are packed with antioxidants called polyphenols that protect your body from harmful molecules – called free radicals – that slowly damage your cells. Free radicals form as a waste product from our cells as our bodies process food and react to the environment around us.
As antioxidants, polyphenols neutralize free radicals. Polyphenols battle inflammation, which is a major cause of illnesses like Type 2 diabetes, Alzheimer's disease, and heart disease. Regular consumption of polyphenols is also linked to digestive and brain health.
Polyphenolic content varies by wine... based on everything from the soil at the vineyard to the weather during growing season and the ripeness of the grapes when they were picked. Still, red wine typically has significantly more polyphenols than white wine – 1.8 grams per liter (g/L) versus white's mere 0.2 g/L to 0.3 g/L – and it's the only type to include a type of polyphenol called resveratrol.
Regular readers know I like to have a glass of wine with meals when I can (3 to 5 ounces). Even if you pick white wine (or rosé) over red, enjoy a glass, knowing that you're still getting some benefits.
What We're Reading...
- Did you miss it? If you want steady income, this is what you should buy.
- Something different: Tupperware warns it's close to going out of business.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
April 14, 2023