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Across America, poll after poll after poll shows that our No. 1 retirement worry is running out of money in old age.

And for good reason…

People in retirement don’t earn a regular income, so they typically have far less financial flexibility than they had earlier in life.

Plus, running out of money and being forced into a dumpy nursing home is high on almost everyone’s “Please don’t let this happen to me” list.

As we save for retirement or are in retirement already, we face a variety of financial threats. Any number of bad things can cause you to outlive your money, including:

• Not accumulating enough savings…
• Having to pay big medical bills…
• Losing money in our investments…

(Just to name a few.)

From 2000 to 2019, “high inflation” wasn’t on the list.

During that 20-year period, U.S. inflation averaged 2.1% per year, which is considerably lower than the long-term average annual inflation rate of 3%.

Thanks to low inflation, you could say the monetary foundation on which we were building our financial lives was stable.

I wish I could tell you the next 10 years will bring more stability…

However, I can’t tell you that. Not even close.

Over the past two years, a series of massive tectonic shifts have rocked our country’s monetary foundation.

The resulting earthquakes have transformed the landscape, reversed the flow of rivers, and erased landmarks forever.

Thanks to these massive tectonic shifts – which I’ll detail in just a moment – we should all move “high inflation” to one of the biggest threats retirees face today… and will face for the next decade.

I’ll show you why high inflation isn’t a “transitory” worry, but something that will likely decimate the savings of millions of Americans.

Most importantly, I’ll show you how to protect yourself against inflation… and potentially emerge from the coming financial chaos wealthier than you are right now.

If you’re worried about running out of money in retirement, this may be the most important thing you ever read.

Unfortunately, the people most at risk are the millions of people who played by the rules, worked hard, and saved money with a comfortable, low-stress retirement in mind.

A Bad Idea From the 1970s Returns…

When people talk about the 1970s, a handful of iconic things always come up.

The Vietnam War. Watergate. Disco. Bell-bottoms.

The decade is also known for its brutal economic climate, with high inflation its key feature.

As I mentioned, the long-term rate of U.S. inflation is 3%, but in the ’70s, inflation blazed at average annual rate of 7%.

This rate of inflation devalued the U.S. dollar by over 50% during the decade.

High inflation also made stock market investing a disaster.

Adjusted for inflation, the Dow Jones Industrial Average lost roughly three quarters of its value from 1966 to 1982.

Running a business, a household, or a retirement portfolio during this strange and volatile time was filled with danger. Small missteps could produce bankruptcy.

Many people who started their retirement in the 1960s and early ’70s suffered horribly… thanks to inflation.

“Strange and volatile” also accurately describes the world we’ve been living in since 2020…

First, we lived through the worst pandemic in generations. The resulting lockdowns hit the economy like a meteor from outer space.

In response, governments printed money in gigantic and unprecedented quantities. Entire oceans of new money were created and began sloshing around the world.

Then, just as we were nearing the end of the worst of the pandemic, Russia invaded Ukraine, oil skyrocketed, and the prospect of World War III was put on the table.

During this strange and volatile time, high inflation came back with a vengeance.

In January 2022, inflation reached a 40-year high.

In February 2022, it climbed even higher.

Now, a long period of high inflation like we experienced in the 1970s has become a real prospect.

I believe everyone should factor a decade of harmful inflation into their financial plans.

It’s one of the biggest threats to your financial well-being you’ll ever face.

The huge catalyst behind this threat is something you’re not hearing from most financial advisers and certainly not from the mainstream media.

In the next section, I’ll show you what the mainstream media doesn’t have the brains or the backbone to show you. Then, a little later, we’ll dive into what you can do to protect yourself and your nest egg…

Joining us to do that are InvestorPlace top analysts Louis Navellier, Luke Lango, and Eric Fry.

For example, Louis will tell you how even amid the volatility, stocks are still a great inflation hedge while Luke makes a case for stocking up on the “new gold.”

They will share which investments make the best inflation hedges. And we’ll even provide an easy way for you to act on each idea if you choose.

By Brian Hunt, InvestorPlace CEO

In geography, a “confluence” is the meeting of two or more bodies of water, typically rivers.

At confluences, one river’s flow meets another’s.

The velocity, temperature, and sediment content of each river clash and mix.

The union of two rivers creates tremendous energy and change… and often incredible sights.

For example, the picture below is the confluence of the Rhône and Arve rivers in Geneva, Switzerland. The brown Arve’s high silt content creates a striking contrast with the blue-green Rhône .

Just like these two rivers, right now, two colossal world-changing megatrends are coming together in a historic confluence.

As they play out over the next decade, they will ensure high inflation is here to stay.

The first megatrend is something I mentioned a moment ago.

In response to the COVID-19 pandemic, governments around the world printed historic amounts of money and injected it into the global economy.

More money was printed in a span of three years than was printed in the previous 100 years.

As you can see in the chart below, the U.S. monetary base skyrocketed in 2020.

In February 2022, the U.S. national debt hit $30 trillion for the first time.

That was nearly a $7 trillion increase from January 2020, just before COVID-19 pandemic.

Add in the future promises made via Social Security, Medicaid, and Medicare, and the U.S. government has a mind-boggling $100 trillion in unfunded liabilities.

(Other major economic powers – like Europe and Japan – face similar gigantic problems.)

Although the U.S. government spent a record amount of money during the coronavirus pandemic, these debt-driven structural problems existed well before.

The government has been spending way beyond its means for years.

Today, the U.S. government owes more money to more people than anyone else in the world.

And many Americans are begging the government to owe even more…

The Dignity of Work and Saving… Replaced by the Handout

Building a good life in America during the 20th century was simple: You worked hard. You contributed to the success of the nation. You saved money. You paid a modest amount of taxes.

And the vast majority of your neighbors were in the same boat.

People like you were respected and valued.

That’s not the America we live in today.

Around 10 years ago, the content of our national character started to change. (And not for the better if you ask me.)

You see, around 2010, America experienced massive shift in how we view success and govern our country. Despite zero fanfare, this historic “paradigm shift” has put our country on an entirely different path than the one that made it the greatest, most prosperous country on Earth.

This paradigm shift has made it so U.S. citizens who succeed through hard work and fiscal responsibility are valued less and less.

This critical part of our “national soul” is being gradually replaced with a desire for endless government benefits and an utter disregard for financial responsibility.

The dignity of work that means so much to so many people is being replaced with waiting for the next “stimmie” check… the next handout… the next government job… the next free home loan… the next free this or that.

We’re slouching toward full-blown socialism and a government takeover of our economy.

We’re slouching toward an era where the government’s share of our economy explodes higher.

We’re slouching toward a time when few proposed new government spending programs are vetoed, no matter how harebrained they are.

Here’s how this shift occurred…

We’ve Crossed the Point of No Return

Although the debate between capitalism and socialism gets plenty of attention in the press, virtually no one talks about the root cause of exactly why America has taken a “hard turn” in the direction of the government taking a larger and larger share of our economy.

I’m not running for office. I’m in the business of informing people about what’s going on. I’m in the business of helping people achieve financial freedom.

I’m not here to sugarcoat things or trying to make you believe the Tooth Fairy exists.

I’ll give you straight talk even when straight talk is painful.

And if the ideals of free enterprise, fiscal responsibility, and the dignity of work mean anything to you, what’s happening sure is painful.

As I write this, the U.S. national debt is over $30 trillion.

That’s about $91,000 in debt for every man, woman, and child in the country.

In 2021, the government spent $2.8 trillion more than it collected in taxes. And don’t forget about the future promises made via Social Security, Medicaid, and Medicare, which add up to more than $100 trillion in unfunded liabilities.

I wish I could tell you the government’s financial situation is about to get better.

But it’s about to get worse.

And it’s thanks to the tectonic shift I mentioned a moment ago.

This tectonic shift has everything to do with something called “net tax recipients.”

A “net tax recipient” is someone who receives more money from the government than they pay in taxes.

For example, if you pay $10,000 in taxes but receive $15,000 in benefits from government programs like unemployment benefits, food stamps, and Social Security, then you’re a net tax recipient.

For much of American history, the percentage of people who got more than they put in remained relatively low… under 20%.

And it’s no surprise.

Hard work, self-reliance, and free enterprise were essential parts of the American character.

Years ago, America didn’t look favorably upon someone sitting on the couch and waiting for the next unemployment check.

But over the past 40 years, the percentage of people getting more in government benefits than they pay in has exploded.

Politicians discovered they could win more elections by promising more and more “free benefits.”

The percentage of Americans who are “net tax recipients” has exploded as a result. As I write you,

Well over half of the people in this country get more than they put in.

I believe in having a social safety net.

We’re a wealthy country and we can afford to help those in need.

But when I think about how our “social safety net” has turned into a “social featherbed,” I grow very concerned.

When you think about the ramifications such a high ratio of “takers vs. makers” has for our country’s financial health and stability, you realize it’s a terrifying development.

When more than half of a country’s citizens receive more in benefits than they pay in, we’ve crossed a very dangerous line.

That’s when the majority discovers it can vote itself more and more benefits… while paying for less and less of those benefits out of their own pockets.

When you reach this “point of no return,” the net tax recipient majority will always vote for politicians who promise more benefits… more spending… more freebies.

At the same time, any politician who campaigns on sound financial policies has zero chance of winning an election.

If you’re a believer in financial responsibility and the ideals of the Founding Fathers, this situation should scare the hell out of you.

As the ability of a tax recipient majority to vote itself government benefits rises, the financial well-being of the country declines.

Once the majority of a country receives more in government benefits than it takes in, each election turns into a competition among politicians to see who can offer more benefits paid by others.

Eventually, the political will to oppose reckless spending and borrowing dies… we turn on our most successful citizens… and the country starts on a road to financial ruin.

These days, any discussion between the makers and the takers and the politicians who represent them are like two wolves and a sheep discussing what to have for dinner.

As someone who loves America and the ideals it was founded on, it pains me to see this state of affairs.

But this trend – of net tax recipients holding our government’s purse strings – is glacial in nature.

It is a massive, deeply entrenched force that’s decades in the making.

As governments have done for centuries, the U.S. government will pay off these impossible debts, spending programs, and unfunded obligations by printing huge amounts of money.

By itself, this a huge problem that will produce inflation and devalue every dollar you’ve saved for retirement.

However… another megatrend has slammed into the world and created another huge danger to every dollar you’ve saved.

That megatrend is called “deglobalization.”

And it will raise the price of everything.

Globalization Is About to Run in Reverse… and Make Everything You Buy More Expensive

“Made in China.”

You’ll find those three words stamped on billions upon billions of things in America.

Clothes. Toys. Furniture. Electronics.

This is because during the 30-year period from 1989 to 2019, we got addicted to cheap stuff from China.

We spent those decades offshoring a huge amount of our manufacturing capacity to the world’s most populous nation… and helped it become the world’s largest manufacturer.

What a turn of events!

Most people don’t know that for much of the 20th century, China wasn’t a notable part of the global economy.

It spent the century plagued by civil wars, Japanese invasions, and a disastrous experiment with communism.

But in the 1990s, China opened back up for business with the rest of the world. Its enormous population went to work in factories that sprung up all over the country.

Thanks to its abundance of cheap labor, Chinese companies could produce these things for much less than their U.S. counterparts.

Because China could produce many things so cheaply, many North American and European companies went on an “offshoring” spree and moved their manufacturing capacity to China.

From 1989 to 2019, the United States willingly became dependent on China for the manufacture of all kinds of things.

Medicine… clothing… children’s toys… textiles… electronics.

China was happy to encourage U.S. dependence on its manufacturing base.

Since China rejoined the global economy in the 1990s, it has been doing everything it can do get an edge over the United States.

The Chinese government has subsidized many of its industries and allowed them to run at a loss so they could undercut and destroy American factories and vital industries.

This has made America dangerously reliant on China for many of our most critical products and raw materials.

And that’s just how China planned it.

The United States chose to ignore how the supply of many things its people deem necessary to everyday life could be interrupted or stopped because of war, pandemics, or souring U.S.-Chinese relations.

For example, did you know that 80% of the antibiotics we consume in the U.S. comes from China?

Did you know that we hardly make any penicillin in the United States anymore? Chinese producers sold it at such low prices that they drove out nearly all the U.S. and European producers.

Now, we’re hugely dependent on China for penicillin and other antibiotics, including those for superbugs.

Did you know that more than 50% of the drugs we take in the U.S. are made from ingredients that come from China?

If China wanted to cut off the supply of drugs and medicine it sends to the United States, we’d quickly have a major health crisis here.

Despite this danger, America chose “cheap” instead of “secure” for decades.

Then you have China’s stranglehold hold on the markets for many vital raw materials…

The most dangerous of which is the production of critical materials called “rare earth metals.”

Rare earth metals are vital to the production of solar panels, electric vehicle batteries, computers, missile guidance systems, radar, and satellites.

They are a HIGHLY strategic resource… just as critical to our nation’s defense as oil is – and the United States has to buy 80% of its rare earth metals from China! China could easily cripple major parts of the U.S. military simply by refusing to ship rare earth metals to us.

It’s like two armies are lined up on a battlefield….

But before one side can fire its cannons, it has to go over and get on its knees and beg to buy fuses from the enemy.

Depending on China Was a Huge Strategic Blunder

The COVID-19 pandemic revealed that dependence on China and supply chains that stretch around the world present a very dangerous situation for the United States.

At any time, a pandemic or the changing whims of Chinese leaders could choke off our only ready source of critical medicines, rare earth metals, and other essential goods.

Our preference for cheap stuff from China has seriously undermined our economic security.

Thanks to COVID-19, millions of Americans are waking up to the fact that our dependence on Chinese manufacturing makes our country weak…

And that as long as we are dependent on China we will never truly be strong and self-reliant.

This is why we are about to see a huge American “onshoring” boom.

We’re about to see a boom in U.S. manufacturing capacity.

We’re about to greatly increase our ability to produce clothing, toys, electronics, cars, appliances, and hundreds of other things.

This big push to make the U.S. safe and secure comes with a tradeoff however…

It will require more than a trillion dollars of new investment.

Moreover, retooling huge parts of our economy won’t happen in two years.

More like 20 years.

This enormous capital expenditure will raise the price of everything… and act as an inflationary tailwind.

That’s the tradeoff we make for ensuring we are secure and self-reliant.

Ukraine Invasion Will Drive Inflation Over the Next 20 Years

During the same time that the United States was choosing “cheap stuff” over “secure economy,” Europe made a similar series of fateful decisions.

It chose to become dependent on crude oil and natural gas from Russia.

It’s estimated that Europe gets 40% of its natural gas from Russia, which is a giant producer of the stuff.

Today, the European Union is the largest importer of natural gas in the world.

Europe could have relied more on domestic nuclear and coal energy, but over and over, its shortsighted leaders chose “cheap” and “green” over “secure.”

Never mind that Europe was counting on what is essentially a “gangster state” for a huge portion of its energy needs.

It was convenient and cheap to buy Russian energy rather than develop a diversified suite of domestic and foreign energy sources.

Russia’s invasion of Ukraine has shown this way of structuring an economy is very dangerous.

When Russian oil and gas went under sanctions in February 2022, European energy prices skyrocketed. It also tied Europe’s hands and made its peace-bargaining position with Russian President Vladimir Putin much weaker.

Just like the United States depending on Chinese manufacturing has proven to be foolish and dangerous, Europe depending on Russian gas has proven to be the same.

Now that Russia’s invasion of Ukraine has made Europeans wake up and realize their blunder, we are about to see a massive and historic push by Europe to increase its energy security.

The continent is set to spend more than a trillion dollars on energy security. It is sizing up to be one of the largest, most expensive spending trends in history.

Europe is going to spend that money on renewable energy, liquefied natural gas infrastructure, and nuclear energy.

It will adopt an “all of the above” mentality. If some nation or entity can provide Europe with energy and it’s not from Russia, Europe will buy it.

Stopping its dependence on Russian energy is the smart move for Europe. It will make Europe more secure.

But just like the U.S. plan to become less dependent on China, this plan will cost more than a trillion dollars.

This transition won’t happen over two years. It will take 20 years.

Thanks to the massive “deglobalization” trend away from depending on countries like Russia and China for critical ingredients of U.S. and EU economies, the price of everything will go up.

Two of the largest economies on the planet are about to choose “secure” over “cheap.”

And that’s going to be really expensive.

My prediction: Pairing the huge money printing of the past three years with the price-raising deglobalization push will produce inflation in the 4% to 5% annual range for the rest of the 2020s.

The Big Money Illusion: Inflation Could Wipe Out Millions of Retirees

Unfortunately, the people most at risk from the coming inflation are the millions of people who played by the rules, worked hard, and saved money with a comfortable, low-stress retirement in mind.

High inflation is already starting to wipe these people out.

And it will only get worse over the next decade.

I worry that many people won’t survive this huge wipeout.

And it all comes down to what I call the “Big Money Illusion.” Let me explain…

We all know inflation has become a huge problem in America.

In January 2022, the government reported that inflation was running at 7.5% per year.

Truth is, it’s probably even higher than that. What most people don’t realize is the government is trying to downplay and underestimate inflation so people don’t riot in the streets. (More on that in a moment.)

But for now, let’s take the government at its word and say inflation was running at 7.5%.

At the same time that inflation was running at 7.5% per year, the yield an investor could earn in government bonds was a paltry 1.5%.

I hardly have to tell you this is a horrible situation for investors saving up to live a better life and looking to earn income on their savings.

You earn 1.5% in yield… yet lose 7.5% of your wealth through inflation!

That’s a real-world loss of 6%.

This brings up a big secret of wealth that many people never learn…

What really matters when it comes to the returns you earn in places like cash, bonds, or stocks are your REAL returns.

Real returns are the returns you earn after accounting for inflation.

For example, if you earn 10% in an investment and inflation runs at 7%, your real return is just 3%.

Or, if you earn 1% in a bank account but inflation runs at 5%, your real return is negative 4%.

I like to say real returns are “the returns you can eat.”

Real returns are what matters when it comes to buying essential things like food, gasoline, medical care, and insurance.

Real returns are what matter when it comes to your true quality of life.

Real returns matter because if the value of your stocks go up 5% but inflation runs at 5%, you haven’t actually grown wealthier.

All you did was tread water.

The gains you made in stocks don’t buy any more food or gasoline or medical care than they did a year before.

People see this idea at work in a big way when it comes to buying a home.

Let’s say the value of your home increases 25% over a span of three years…

… while inflation makes the price of everything go up 25% over those same three years.

That 25% increase makes you feel wealthier.

You can brag about the increase to your friends and family.

However…

If you sell your house, the reality is you didn’t make a dime.

Real returns deliver a brutal reality: If the price of everything goes 25% along with the value of your house, you aren’t any wealthier.

Any house you buy will be 25% more expensive.

The food and gasoline and everything else you buy will be 25% more expensive than it was three years ago.

It might feel like you’re 25% wealthier, but you actually aren’t.

You fell for a Big Money Illusion.

With inflation at 7% per year… a dollar of savings will be worth just 82 cents in three years.

Not the way we expect our retirement nest egg to grow.

What’s worse is right now financial advisers around the country are urging their clients to invest in supposedly “safe” government and corporate bonds.

For example, if a client is 70 years old and retired, a financial adviser will urge them to keep at least 80% of their savings in bonds.

Going back to the real return problem we just discussed…

Over the past year, government bonds have yielded 1.5%.

But inflation ran at 7.5%.

That’s a real return of negative 6%.

That’s a huge loss of wealth – one the average American retiree can’t afford to take.

Yet…

Millions upon millions of people are taking those losses as we speak!

Right now, billions upon billions of dollars in real wealth are evaporating from American retirement accounts!

I can practically see the money going up to “money heaven.”

If you lose real wealth at a rate of 6% a year, in six years, you’ll have 31% less money… and in 10 years, you’ll have 46% less money.

American retirees can’t afford to absorb those real return losses.

Yet… left with few good alternatives… financial advisers are herding their clients into this horrible situation. A situation where their clients lose huge amounts of their buying power every year.

It’s shaping up to be one of the biggest financial disasters of all time.

Why the Government Lies About Inflation

Soon, the government is going to start crowing about how it has beaten inflation.

Maybe inflation goes down from 7.5% to 4% or 5%.

But when the government says it has beaten inflation… that there’s nothing to see here, to go back to your homes and your regularly scheduled program…

I want everyone out there to know one thing…

The government is lying.

In the summer of 2021, Americans were hit with the worst price increases in 30 years.

The price of gasoline, cars, bread, beef, coffee, housing – you name it – began soaring.

The harmful price increases were the result of the government’s massive money printing in previous years.

Governments hate reporting high rates of inflation.

High inflation makes it hard for voters to get by.

It erodes the value of their savings.

When voters get upset about that, they vote politicians out of office.

So, it was with reluctance that the Biden administration reported in late 2021 that inflation was running at a 7% annual rate.

These figures – and the underlying problem they represent – have the American public very worried. (Rightfully so.)

The pain of inflation hits us every time we buy food and fill up our cars with gas.

The media is filled with reports of high inflation these days.

The fact that inflation is so widely followed… so analyzed… so discussed… makes what I’m about to tell you all the more incredible.

Everything you see in the mainstream media about inflation is missing the big story here.

I’ll repeat: The government is lying to you about inflation.

And the mainstream media is too ignorant or too corrupt to expose it.

This lie is SO big and SO harmful that it qualifies as one of the greatest frauds in the history of our country.

Before I explain how the Big Lie works, I must warn you and everyone else out there…

You’re about to learn some ugly things about America.

They could make you very angry.

You can’t unlearn what I’m about to tell you.

It could make you seriously question some long-held beliefs you may have about our country.

But in the end, you’ll be better off knowing. It’s better to be informed than in the dark. So let’s dive right in…

Remember how I mentioned how a lot of people get upset when there’s high inflation?

Politicians want to have their cake and eat it too.

They want to spend massive amounts of money to accumulate power and ensure their reelection…

But they know reporting high rates of inflation will get them kicked out of office. So…

Politicians are basically incentivized to lie about inflation.

Here’s how the Big Lie works…

The Big Lie Is Right in Front of Your Face

In America, the most widely followed gauge of inflation is the Consumer Price Index, or CPI.

The CPI tracks a basket of goods and services people buy, like appliances, cars, gasoline, food, housing, and medical care.

The CPI is purported to monitor changes to the cost of living.

The government reports the changes in CPI each month.

When you read headlines and articles about inflation, you read about changes in the CPI.

And, it has real-world ramifications…

The CPI is used to adjust the cost-of-living payments made to more than 50 million people on Social Security, as well as pension payments made to military and federal employee retirees.

Because of this, the CPI is a HUGE deal when it comes to government budgets and directly affects how much money is paid out to massive amounts of retirees.

Despite being one of the most widely used, most widely followed numbers in America today, the CPI is a fantasy that often drastically underestimates the rate of inflation.

I’m about to use some grade-school math to show you how the Big Lie works.

You may be tempted to skip over it. Don’t.

Get educated. Know what’s going on. Don’t be an easy mark.

The math is easy, but it’s critically important.

The Crazy Way the Government Calculates the CPI: Why “OER” is “BS”

Housing is one of the largest expenses most of us will ever pay in our lives – whether you are a renter or homeowner.

Because of that, Housing represents about one third of the CPI, making it by far the largest and most important component of the CPI.

Now, when any normal, rational person thinks about the changes in the cost of housing, they think of changes in the price of homes and apartment buildings.

If home prices in your area increase 25% over the span of three years, the cost of housing has increased 25%, right?

When home (and apartment building) prices increase, maintenance costs go up. Insurance costs go up. Taxes go up.

The cost of every important thing related to the ownership and upkeep of that structure goes up. So, the owners of those structures increase rents as the underlying price of the structures go up.

Again… ask any rational adult and they will agree that any useful and legitimate measure of inflation should take changes in home prices into account.

But that’s not how the government does it.

Instead, the government uses something called Owner’s Equivalent Rent (OER) to calculate the housing component of CPI.

They gather OER information with surveys that ask homeowners how much they think they would pay in rent if they were renting the home. The answers to that question are collected, aggregated, and used to report changes in housing costs.

This is an absurd way to report changes in housing costs.

Homeowners aren’t renting, so typically they have no idea what rent costs are. Also, people tend to fool themselves on many important matters of money.

This absurd way of calculating changes in housing costs leads to instances of laughable inaccuracy.

However, the Case-Shiller U.S. National Home Price Index – the most widely followed gauge of U.S. home prices – showed that home prices increased 18.79% year-over-year on average, across America.

This index is calculated using real home price transactions.

It’s sort of like the “Dow Jones Industrial Average” of home prices.

The massive difference in the government’s absurd calculation and real-life changes in home prices allowed the government to say inflation was running at 7% in December 2021.

Who do you believe in this situation?

The government, which is incentivized to lie, and homeowners who never think about rent…

Or actual home price transactions?

When you get right down to it, having the government police inflation and report its own inflation statistics is laughable.

It’s like letting a 5-year-old girl police her own candy consumption and report on it to her parents. Of course, she’s going to BS it all the time.

Over time, this absurd way of calculating CPI leads to vast understatements in the rate of inflation. It leads to people suffering from a mass delusion… a “money illusion” that makes them think they are wealthier than they actually are.

It allows the government to silently steal small amounts of money from your bank account every month. This theft is particularly disgusting because it is hidden and lied about in every CPI report.

It also allows the government to spend a lot more money than it would if people knew the REAL rate of inflation. This debases our currency.

This is one of the biggest frauds in American history.

Inflation is running at 7%, but savers can only earn 1.5% in bonds. What are people who are saving for retirement or already retired to do?

Deglobalization is happening. That train has already left the station – and it will continue to drive prices up.

Add in the government’s bogus inflation numbers, and the situation goes from bad to dire. It’s much worse than most people think.

Fortunately, there are ways you can avoid this historic wipeout. There are ways to fight inflation and protect and grow your wealth in the process. Here at InvestorPlace, we have a number of resources available to help you to do just that.

In the next section, we’re going to dive into five different “inflation proof” investments you can make to help protect your wealth. (Later on, we’ll even give you tips on how to best allocate an inflation-proof portfolio.)

Let’s jump right in…

By Brian Hunt, InvestorPlace CEO

During periods of high inflation, your money loses value.

Consider: That burger on the dollar menu suddenly goes from $1 to $1.09.

While on a small scale that doesn’t seem like much, when you see a 9% increase or more across all goods, it makes a big difference.

For example, in 2021 an average family of four spent about $1,071 per month, or $267 a week, on groceries.

A year later, costs of food have soared 10.8%. That brings that average bill to $1,200 per month or, $300 a week.

That’s a roughly $130-per-month increase. Our groceries will cost us about $1,560 more this year than last.

If you’re a millionaire, that may not sound like much. But if you’re in the middle class, that’s a “line item” you’ll circle in red at the end of the year.

And that’s just groceries!

Gasoline… utility bills… used and new vehicles… appliances… furniture and bedding… everything is up!

As we’ve discussed, if you’re nearing or in retirement, the bad news is that inflation is way ahead of bond rates. For working people, it’s just as bad, as inflation is far outpacing the rise in real wages.

Just take a look at this chart:

And this only goes through the end of 2021. Since then, inflation is up even more.

It all goes back to your REAL returns. If inflation is outpacing our savings and/or the money we bring in from our jobs, we need to find other ways to ensure we are net positive.

In the following pages, our InvestorPlace analysts – Eric Fry, Louis Navellier, and Luke Lango – will join us to share five types of investments you can make right now to help protect and grow your money during times of high inflation.

First up is one you are probably quite familiar with…

Inflation Hedge No. 1: Stocks

By Louis Navellier

Editor of Market360, Growth Investor, Accelerated Profits, Breakthrough Stocks, and Power Options

“A people however, who are possessed of the spirit of Commerce – who see, & who will pursue their advantages, may achieve almost anything.”

This quote is likely one you haven’t heard before, but I bet you’ll recognize who it came from: one of America’s Founding Fathers and the first president of the United States, George Washington.

George Washington wrote this in 1784, but it holds just as true today. We’ve seen folks like Jeff Bezos go from your “average Joe” to dominating the e-commerce industry with his company, Amazon.

We also have billionaire Mark Zuckerberg, who founded Facebook in college and turned it into the No. 1 social media site in the world.

Or consider Bill Gates, founder of Microsoft, who carries $104 billion to his name. His company took the computer software industry by storm, and its market cap $2 trillion.

These men didn’t become billionaires overnight. They were talented and worked very hard to get ahead in life. They are the epitome of the American dream.

Now, while I will be first to admit that I am no Bill Gates or Jeff Bezos, I do like to say that my life story is also the embodiment of the American dream.

I’m the son of a stone mason. I worked my way through college in the hardscrabble neighborhoods of California’s East Bay region.

Given my background, I now have an abundant life. I run a billion-dollar financial business. I’m a multimillionaire with beautiful homes in Nevada and Florida. My children attended the best schools. I’m able to collect the luxury cars I used to dream about as a kid.

Capitalism allowed me to build a wealthy life, but that character of America is changing.

As Brian noted in the previous section, we are living in a world that is much different then what we are used to. One where a global pandemic shut down the global economy for the better part of a year… one where numbers are fudged and then used to make decisions… and where inflation is running the highest it’s been 40 years…

It’s not pretty out there. But, as I’ll show you, stocks can be a great hedge for what’s coming…

Savers Are Getting Crunched

Inflation is a term that gets thrown around a lot.

You might have heard how Germany experienced massive inflation after World War I… and its paper money became worthless. Or, you might have heard how Venezuela recently experienced massive inflation… and its paper money became worthless.

But what exactly is inflation?

Inflation is an increase in the supply of money… which decreases the value of each “unit” of money. In America’s case, that unit is the dollar.

Let’s say a country has $100 million in its monetary system. People and businesses use these dollars to pay each other for goods and services. When people earn money, they park of some of those dollars in banks.

Now, let’s say the political leaders of this country decide to launch a big social welfare program and fight a war at the same time. The trouble is that the government doesn’t have enough money to spend on them. It has already budgeted all of its tax revenue for other things.

For sake of simplicity, let’s say the government can’t borrow the money it needs for the welfare program and the war. Let’s also say that it’s politically unacceptable to raise taxes.

One option political leaders often choose – and they’ve done this for centuries – is to print new money to pay for the welfare program and the war.

They choose to “debase” their currency.

In this example, that’s what the government decides to do. The government prints up $20 million to pay for the social program. This increases the number of dollars in circulation by 20%. Remember, we started with $100 million and then added $20 million more, a 20% increase.

Because many new dollars make their way into the economy, people start noticing that prices are increasing…

The price of a $30,000 car works its way up to $36,000 (a 20% increase). The price of a $5 sandwich works its way up to $6 (a 20% increase).

Remember, neither the car nor the sandwich get 20% bigger or better. (In fact, they may be getting smaller and worse.)

The value of the money simply fell… and caused the prices you see every day to increase. If you hold a lot of money in the bank during this inflation, you suffer a huge loss in purchasing power.

A big problem savers have with the U.S. dollar and other paper currencies is that they are controlled by political leaders who have huge incentives to spend more than they take in… which massively devalues the money over time.

This problem goes back thousands of years – even back to Roman times – when people used precious metals like gold and silver as money.

To ensure they could spend more and more money, Roman leaders would mint more and more coins… while putting less and less precious metal – like silver – in the coins and more and more “base” metals – like bronze – in them.

They literally devalued their money.

And it’s happening today. Because of inflation, $100 in 1982 is now worth around $297.93 and climbing today. But don’t think it’s a problem from just the 1980s…

The amount of devaluation since just 2008 is shocking. From 2008 to the beginning of 2022, the purchasing power of the U.S. dollar has fallen by over 33%. This is an incredible loss of your purchasing power.

And as Brian shared above, right now it’s getting even worse.

So, what should you do about it to protect yourself?

Buy stocks.

Why Stocks Are One of Your Ultimate “Devaluation Plays”

I want to take you back to 1980…

During that year, the Rubik’s Cube debuted… Mount St. Helens erupted… The Empire Strikes Back hit movie theaters…

And the Dow Jones Industrial Average sat at a mere 838.49 (it’s now above 30,000). At the time, few people realized we were on the cusp of the greatest bull market in U.S. history. Starting at the 838.49 level in 1980, the Dow Jones soared to 10,787 by 2000… a gain of 1,187%. Keep in mind, that’s just the “average” gain among the 30 large companies that make up the index.

Top companies gained much, much more.

• Microsoft, for example, soared 50,000% during the 1980–2000 boom.
• Home Depot soared 20,000% during the boom.
• Amgen soared 40,000%.
• Cisco soared as much as 42,000% during the boom.

A modest investment of $5,000 in one of these winners could have grown into more than $2 million.

During the 1980–2000 super boom, innovations like computers, cell phones, and the internet changed the way we work and live… and our home prices soared.

However, few people realize the real, fundamental reason the 20-year period from 1980 to 2000 saw stock prices soar at incredible rates to new highs…

That’s because few people know that the 1980s and ’90s were a period of significant inflation.

The average annual inflation rate during this super boom was 4.2%.

Thanks to inflation, $1 in 1980 was worth just $0.44 by 2000.

It turns out that a 4.2% annual rate of inflation has proven to be a mild, stock market-boosting rate of inflation.

To be clear, when inflation runs at 4.2% for 10 years, any dollar you have in the bank loses 33% of its value.

A 4.2% annual rate of inflation is not good for people who keep all of their money in the bank or under a mattress.

However, we know that rate is extraordinary for stocks.

That rate acts as a stimulant to the economy. It greases the wheels of commerce and keeps things “buoyant.”

Remember, from 1980 to 2000, the Dow Jones soared 1,187%… and top-performing companies gained much more.

Stocks are such a great inflation hedge because they represent ownership in real businesses. And great businesses function as inflation “pass through” vehicles. Those are businesses that “pass through” the price increases that occur as a result of inflation.

For example, if inflation sends the price of sugar and cocoa up by 5%, Hershey will “pass through” those input increases by raising the price of chocolate by 5%.

Or… if inflation sends the price of writing software code up by 7%, Microsoft will “pass through” those input costs by 7% by raising the price of its software.

Great businesses like Hershey and Microsoft function as inflation pass-through vehicles because people love their products and services (or at least can’t stand the idea of switching).

So… as inflation increases the price of input costs, these businesses can recoup those higher costs by charging more for their products. The nominal price of inputs and product prices might change, but the businesses’ profit margins do not. They simply “pass through” the inflation, which allows their profits and market values to rise along with prices.

As an investor in these companies, those values get passed to you in the way of profits as the share price of the stocks go up… at a much higher rate than your standard savings account, which still sits at less than a 1% return rate. (Much lower than the current rate of inflation… which results in negative real returns.)

Of course, you can’t just throw a few darts at the S&P 500 to find the best stocks.

You need to find the best type of stocks… and then dig deeper to find the best individual stocks within that group.

Here at InvestorPlace we have a number of top-notch analysts to help you scour the market and point you to the best opportunities on the market to protect and grow your wealth.

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Inflation Hedge No. 1: Stocks

As we mentioned, while stocks make a great inflation hedge, you can’t just throw a dart, invest in a few, and hope for the best. If you want to get exposure to stocks and don’t know where to start, there are a number of exchange-traded funds (ETFs) you could consider.

Two worth mentioning are SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500, a basket of the biggest-by-market cap stocks, and Cambria Shareholder Yield ETF (SYLD). SYLD is a basket of companies that generate lots of cash flow and return the most amount of money to shareholders in the form of dividends and share buybacks.

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Inflation Hedge No. 2: Gold

By Brian Hunt, InvestorPlace CEO

First, let’s agree on what “insurance” is…

In my book, buying insurance comes down to spending a little bit of money to hedge yourself against a disaster.

Throughout our lives, we spend a little bit of money on insurance and hope we never have to use it.

For example, home insurance costs a small fraction of your home’s value. You buy it and hope you never have to use it.

The same goes for car insurance. It costs a fraction of your car’s value, so you buy it and hope you never have to use it.

It’s the same with “wealth insurance.” You can buy wealth insurance and hope you never have to use it.

There are lots of different types of wealth-insurance policies out there. They involve intricate details, lots of forms to sign, and payments of big fees to advisers and salespeople.

But I’d rather keep things simple and keep money in my pocket instead of putting it in a salesman’s pocket. You might be in the same boat.

Here’s how we can do it…

Put a small portion of our wealth in gold.

That’s it. That’s all it takes to get wealth insurance and protect your family against a financial disaster.

You don’t need complicated insurance products.

You don’t need to pay big fees to a salesperson.

Just pay a small commission to a gold seller, store the gold in a safe place, and you’re done. Or, you can make it even easier and buy a gold ETF in your online brokerage account. (We’ll provide a couple of gold ETF options in a moment.)

Here’s why this “insurance” is important…

The Ultimate Way to Insure Your Finances Against Wars and Disasters

Some smart people out there predict a worsening geopolitical situation, wars, and a decline in the value of dollar, and all the things we talked about in the first section of this report.

Even if you’re more optimistic and think things will be fine, I think you’ll agree that it makes sense to own some insurance in case a financial disaster strikes.

People would likely flock to gold in a global financial disaster…and cause its price to soar.

For example, the decade from 1970 to 1980 was marked by war, recession, and very high inflation. This made the 1970s a terrible decade for stocks and bonds. But it was terrific for gold owners.

As people fled stocks for precious metals, gold gained more than 2,000% during decade.

And that wasn’t the only time gold proved valuable during rough times…

For the past few thousand years, gold has seen a lot of competitors try to become the “ultimate form of real money.” Folks have used nearly everything – cigarettes, butter, stones, livestock, salt, seashells, and even tulips – to store their wealth and trade for goods.

But when crisis hits… when wars break out… when bank runs grip a nation… when it’s really time to just “grab the money and run,” we keep coming back to gold as the ultimate form of money.

Gold beats the competition for six reasons…

1. Gold is easily transported. Real estate is a good store of wealth, but you can’t move it.
2. Gold is divisible. If I owe both Sally and David but have just one piece of gold, I can split it in half.
3. Gold does not rust or crumble. Folks have used cattle as money, but cows don’t survive long in a locked vault.
4. Gold is consistent all over the world. I’ll accept the pure gold you mined in Canada just as easily as I’ll accept the pure gold you mined in Mexico.
5. Gold has intrinsic value. Gold has wonderful conductivity, it’s malleable, and it doesn’t break down… so it has many industrial uses.
6. Gold cannot be created by governments. People who saw their wealth disappear in the great inflation of the 1970s know that keeping their wealth in paper money can be disastrous.

For those reasons, gold has been money for more than 2,000 years. and it’s what makes gold the perfect form of wealth insurance.

The good news is that you don’t have to buy a huge amount of gold to have a good insurance policy.

You can place just 5% of your portfolio into gold.

Its place in your portfolio could mean a huge difference in your family struggling to get by…or doing well.

How a Gold Position Could Make You Wealthy During a Crisis

Let’s say you have a $100,000 portfolio with 95% of it in blue-chip stocks and income-paying bonds.

If the predicted financial disaster doesn’t strike, your stocks and bonds will increase in value. Your gold will probably hold steady in price or decline a little. Since the bulk of your portfolio is in stocks and bonds, you’ll do just fine.

But what if the financial disaster strikes? I’ve heard some top analysts say gold could climb to $6,000 an ounce in a financial disaster scenario.

Let’s say a financial disaster sends the value of your stocks and bonds down 33%. That would be a massive decline. This epic financial disaster would cut your $95,000 position in stocks and bonds by 33%, leaving you with $63,332.

But let’s say this disaster also causes gold to rise to $6,000 an ounce.

Right now, let’s say gold is around $2,000 per ounce. A rise to $6,000 would produce a 3X increase in the value of your gold. It would cause the value of your $5,000 gold stake to rise to $15,000.

Post-financial disaster, you’d be left with $78,332 ($63,332 from stocks and bonds + $15,000 from gold).

The disaster still would hit you, but not nearly as hard. Your insurance would play a big role in limiting the damage.

But what if you think the chances of financial disaster are higher than “unlikely”? What if you’re more worried than the average Joe?

If you are, simply increase the “insurance” portion of your portfolio. Instead of a 5% position in gold, you could increase it to 15%.

If the previously mentioned financial disaster were to strike your $100,000 portfolio weighted 85% in stocks/bonds and 15% in gold, the 50% decline in your $85,000 stocks/bonds position would leave you with $42,500. Gold’s increase to $6,000 an ounce would increase your $15,000 gold position to $45,000.

Your large gold-insurance position makes it so post-financial disaster, your portfolio is worth $87,500… a manageable 12.5% overall decline. That may not sound great, but it’s a heck of a lot better than seeing your overall portfolio decline by 33%.

As you can see, the larger your gold insurance policy, the better you would do in a financial-disaster scenario.

But keep in mind, if the financial disaster doesn’t strike, you won’t benefit as much, because you hold less money in stocks and bonds, which do well if the economy carries on. Also keep in mind…it would take a serious financial disaster to send stocks down by 33% and gold up to $6,000.

Depending on what you think the chances of a financial disaster are, you can adjust your gold insurance policy. It all depends on your goals and beliefs.

Think the chances of disaster are slim? Consider a gold-insurance policy equivalent to 1% to 5% of your portfolio.

Think the chances of disaster are high? Consider a gold-insurance policy equivalent to 15% to 20% of your portfolio.

Is financial disaster around the corner? I don’t know the answer.

Nobody does.

But if you buy some “wealth insurance” in the form of gold, you don’t need to know the answer. It’s simple. It’s easy. It’s low-cost.

You buy gold and hope you never have to use it.

You’ll do fine if things continue. You’ll do fine if the crap hits the fan. And the peace of mind you get from owning gold “insurance” is worth even more than the money it could save you.

And I’m not just talking about physical gold…

How to Amplify Gold’s Power to Create Wealth

You might have heard some advisers say that if gold soars in value during a crisis, the companies that mine gold could soar even more.

That’s because when the price of a natural resource doubles, triples, or quadruples in price, the profit margins of the companies that produce the natural resource can skyrocket.

For example, let’s say you own a gold-mining company. Your company can produce gold for $1,300 per ounce.

Let’s also say the current selling price for gold is $2,000 per ounce. This means your profit margin is $700 per ounce.

Now let’s say the price of gold rises from $2,000 per ounce to $4,000 per ounce. This is a 100% increase in the price of gold.

But your company’s profit margin just soared from $700 per ounce to $2,700 per ounce… a 3.85X increase.

This kind of financial magic is called leverage…and it can produce incredible stock market gains.

For example, from 2002 to 2008, the price of gold climbed from $300 per ounce to $1,000 per ounce.

During this time, leading gold company Kinross Gold Corp. (KGC) climbed from $2.25 per share to nearly $27 per share (a 1,093% gain). Another gold company, Yamana Gold Inc. (AUY), climbed from around $1.53 a share to more than $19 per share (a 1,165% gain). The gains were so great in this market that a simple gold stock index gained 692%.

These types of gains are impressive. But please keep in mind that these companies are also typically riskier investments. In fact, they’re some of the riskiest stocks in the entire market.

That’s because mining is a capital-intensive business. The firms have no control over their product. When gold falls in price, these companies can fall more than 50% in a short time.

But if a financial crisis forces the value of gold much higher and paper currencies much lower, these companies could rise 500%…1,000%…or more.

Gold is the ultimate form of wealth insurance. I buy it and hope to never have to use it. It’s a vital part of my overall wealth plan. I hope it’s part of yours.

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Inflation Hedge No. 2: Gold

If buying physical gold or picking up a few gold miners isn’t right for you, there are some gold ETFs worth mentioning:

1. VanEck Gold Miners ETF (GDX) is a basket of the world’s largest gold-mining companies.
2. SPDR Gold Shares (GLD) owns physical gold and tracks the metal’s price movements.

Both of these options give you the benefits of owning gold without having to own and store the physical metal or figure out which mining companies offer the best opportunity.

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Inflation Hedge No. 3: Oil and Energy

By Eric Fry

Editor, Smart Money, Fry’s Investment Report, The Speculator, and Absolute Return

Inflation isn’t good for much, but it does tend to benefit hard-asset investments like gold and resource company shares. During the inflationary 1970s, for example, energy stocks delivered a total return of 73%… after inflation!

By comparison, the S&P 500 Index delivered a 16% loss after inflation during that wicked decade. That analysis comes courtesy of NYU Stern and Tuck School of Business at Dartmouth College.

I am not predicting that the current inflationary trend will produce a similarly powerful boon to energy stocks, but neither am I predicting it won’t. At the margin, inflation is a friend to the energy sector.

And right now it’s not just inflation that’s affecting the energy market. As we’ve been showing you, a number of factors are driving market volatility and inflation right now.

I’m here to tell you that although it may seem like Big Oil is on its way out, it’s not. And oil and energy companies provide a great inflation hedge for savvy investors.

EVs Won’t Destroy Oil Demand… Yet

Today, more than half of every barrel of crude oil becomes fuel for an internal combustion vehicle. So, it makes sense that electric vehicles (EVs) would reduce net demand for crude… eventually.

While recent years demand for EVs has risen sharply, that day is not likely to arrive any time soon.

Even though EVs will capture a growing share of the global auto market, the total auto market will also continue to grow larger. The number of gas-powered automobiles on the road will continue to increase for several more years. The U.S. Energy Information Administration says the total number of internal combustion vehicles on the world’s roads will not peak until 2038.

Meanwhile, because crude demand from other end users will continue growing past that date, the International Energy Agency (IEA) expects worldwide oil demand to be at least 25% higher in 2050 than it is today. That’s the IEA’s “reference case” scenario. Under alternative scenarios, the IEA says worldwide crude demand could top a whopping 150 million barrels per day (MBPD) – or about 50% above current levels.

Furthermore, renewable energy is not oil-free energy.

Producing an EV, for example, requires about twice as much energy as producing an internal combustion engine vehicle. This differential results mostly from battery production, which uses a lot of energy to extract and refine metals like copper and nickel.

And it’s not just EVs that are using massive amounts of oil…

Demand for Oil Is Growing

Around the globe, demand for oil is rebounding sharply. China and the United States have been spearheading this demand recovery. China’s crude consumption, for example, is already hitting new record-high levels that are more than 10% above the country’s pre-COVID peak. Here in the U.S., crude consumption is just shy of pre-COVID levels.

Meanwhile, demand for crude in many other major economies remains well below pre-COVID levels. For example, the 38 major economies of the Organization for Economic Cooperation and Development (OECD) are currently consuming about three MBPD fewer than before COVID struck. Similarly, crude oil consumption by the global aviation industry remains well below pre-COVID levels.

Prior to the pandemic, air travel consumed about eight MBPD of crude – or close to 8% of global supply. That demand plummeted below one MBPD during the worst of the pandemic. It has been steadily recovering ever since but remains about two MBPD below pre-COVID levels.

If these two sources of demand – OECD and aviation – merely returned to pre-COVID levels, global crude demand would jump about five MBPD to 104 MBPD. That figure would not only be the highest level ever but would also be about two MBPD higher than the world’s oil producers have ever supplied to the market.

No problem, the experts say, the OPEC producers could easily satisfy that additional demand…

But could they?

The Organization of the Petroleum Exporting Countries (OPEC) is currently producing about 27.5 MBPD. In order to provide an additional five MBPD to the crude market, OPEC would have to boost its production to 32.5 MBPD. In theory, OPEC has 33 MBPD of total capacity. But it has not pumped crude at that annual pace since 2016.

Moreover, the United States has supplied almost all of the world’s crude production growth during the last decade, not OPEC. Shale oil plays provided most of that bounty, as U.S. shale production nearly doubled between 2016 and 2020.

That amazing feat will not be easy to repeat. U.S. shale oil production topped out at 9.4 MBPD two years ago and is currently running at 8.7 MBPD.

A fresh wave of investment in exploration and production (E&P) could boost output somewhat, but very few U.S. oil companies are expressing any intention to do so. They are hesitant to repeat the errors of past cycles when high oil prices tempted them to overspend on future production projects.

Furthermore, shareholders are pressuring these companies to defer new E&P investments in favor of using corporate cash to pay down debt, boost dividends, and/or repurchase shares.

These factors are not the only headwinds for new investment; green energy groupthink is also preventing the oil industry from boosting E&P spending. Oil company executives read the same issues of The Wall Street Journal as everyone else, and they watch the same episodes of Jim Cramer’s Mad Money on CNBC. So just like everyone else, they “know” that EVs and renewable energy technologies have become an existential threat to the oil industry.

As a result, many oil company executives see the EV revolution as black-hooded “Death,” approaching with a scythe in hand to escort the oil industry into the afterlife. Even though this inevitable threat is not an immediate one, many oil company executives are behaving as if it is. They are keeping their wallets in their back pockets.

According to Rystad Energy, global investments in oil and gas exploration and production have plummeted by about 65% since the 2014 peak.

This non-spending will reduce future crude production, which could lead to soaring oil prices. Additionally, as oil companies slash their spending on exploration and development, their free cash flow will surge. As this cash piles up, reported earnings will also surge, as will the capacity to “return capital” to shareholders.

We’re seeing it all happen right now.

Bottom line: A tightening oil market, coupled with a rising inflationary trend, provides ample reason to add an oil stock hedge to your portfolio.

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Inflation Hedge No. 3: Oil and Energy

If you are looking to get exposure to the oil and energy sector, consider SPDR S&P Oil & Gas Exploration & Production ETF (XOP) which holds a basket of oil and natural gas producers.

Another option is Alerian MLP ETF (AMLP), which is a compilation of oil and gas transportation and storage assets.

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Inflation Hedge No. 4: Bitcoin

By Luke Lango

Editor Hypergrowth Investing, Innovation Investor, Early Stage Investor, Crypto Investing Network, and Ultimate Crypto

From 2008 to when he retired from the U.S. Senate in 2015, Tom Coburn provided a one-of-a-kind resource to citizens of the United States.

Every year, Coburn and a team of staffers produced what became known as the “Wastebook.”

Wastebook reports were long, detailed documents that listed the ridiculous ways the U.S. government was wasting taxpayer money.

For example, the 2014 Wastebook detailed how one government project spent $865,000 to train mountain lions to walk on treadmills.

One year, Coburn noted that $331,000 was spent on a grant to study the condition of being “hangry.”

And in what might take the cake, Coburn’s report once noted how the Pentagon was spending $1 billion to destroy $16 billion in unneeded ammunition.

If you’re a student of history, you know the crazy things I just listed are drops in the ocean of government decisions that can be classified as dumb, corrupt, ridiculous, or a mix of all three.

All too often, government is the cause of – not the solution to – our problems, of which there are plenty worth worrying about.

Still, I’m a born optimist.

I believe things will be better in 20 years than they are now. I believe free minds and free markets will create more and more prosperity every year for the rest of my life.

However… given the government’s long history of destabilizing the lives of regular people with things like runaway inflation, war, and communist policies, I believe in owning some insurance in case things go haywire.

After all, when I get into a car, I don’t expect to get into an accident, but I wear my seatbelt just in case. You’re reading this report, so there’s a good chance you feel the same.

You believe in insurance and want to own some “hedges” in case the world’s financial system gets destabilized like it did in 2008. (Which, as we’ve been explaining, is very possible…)

Below, I’ll explain how governments debase the value of your hard-earned money – and why bitcoin is the best insurance policy to protect your wealth.

So let’s get started…

The Scourge of People Who Save Money

Governments have a long history of debasing currencies.

When governments want to pay for wars and big social programs, they often create extra currency units (like dollars).

Every currency unit that is created devalues the existing currency units. This is called “inflating” the money supply.

Inflation is a way for governments to quietly clip small bits of value from the dollars in your wallet and bank account. It’s a particularly sneaky activity because it allows a government to take wealth from its citizens without suffering the “blowback” of raising taxes.

And, as we highlighted earlier, inflation is one of the greatest dangers a person saving for retirement faces. It can massively impair the future buying power of the money you save today.

To get an idea of how a free-spending, constantly inflating government can devalue its currency, have a look at the chart below. It shows how the U.S. dollar has lost over 90% of its value since 1870.

History is full of examples… of hardworking, cautious folks losing their wealth at the hands of free spending government officials who don’t think twice about debasing their currencies in order to get reelected.

After a world-altering event like COVID-19, that desire expands exponentially.

This is why the allure of today’s digital money – cryptocurrencies that only exist in fixed amounts and cannot be debased – will grow and grow over the coming decade.

Over time, conventional currencies become less and less valuable. But the limited supply of cryptocurrencies like bitcoin should repel the effects of conventional currency inflation… making cryptos great vehicles for storing wealth. This will give them a big advantage over government-backed paper currencies.

Governments around the world have racked up debts and unfunded obligations on a scale never seen before. The governments and citizens of the world’s biggest countries show no desire to face up to reality. There is no will to curb spending, nor to scale back making lavish future promises.

But innovative technology is making it so individual savers don’t have to put up with reckless governments. That’s why they will continue to adopt cryptocurrencies in which to save, spend, borrow, and transfer money.

In fact, there’s already evidence of this happening. A report by Digital Assets Data found that bitcoin is used as a store of value and an alternative to local fiat currencies in countries with high inflation and unstable monetary and banking policies.

As you can see in the graph below, peer-to-peer bitcoin transactions (directly from one to another with no go-between) spiked in countries that saw sky-high inflation. And those spikes happened independently of the underlying price of bitcoin.

When people needed to keep their savings from becoming virtually worthless in their local currency, they turned to bitcoin as a means to preserve those savings.

The potential market for this new kind of money is incredible.

Understanding Bitcoin as an Inflation Hedge

Similar to gold, bitcoin serves as a store of value during turbulent economic conditions. It can also be a go-to means of value exchange, like the U.S. dollar.

In fact, in the case of bitcoin, it’s even better than gold as a store of value in the sense that its total supply is known with absolute certainty. There will only ever be 21 million bitcoins in circulation (once they’ve all been mined), even if demand soars into the stratosphere.

Plus, bitcoin is not a corporation or a government that bends to doing what’s easy or convenient in a given moment. Bitcoin has no president or CEO, no board of directors who can intervene and rain down cash bailouts on the over-spenders.

The digital ledger that marks and secures bitcoin’s exchange is maintained through an open-source protocol. That means anyone can read and review it, and anyone can run the code that defines the rules and parameters of its network and its operation on their own computer.

The decision making for bitcoin’s future is spread out more evenly among folks who own it and have skin in the game.

Why Volatility Is a Good Thing

As an investment, bitcoin has arrived as a desired asset class that, because of its volatility, has the potential for life-changing gains. I believe bitcoin has a shot at becoming the world’s digital reserve currency – which could send it to $100,000 and even higher.

That makes bitcoin a highly attractive alternative to the $18 trillion in negative-yielding debt currently floating around.

The volatility we’ve seen won’t last forever…

More and more people are trading bitcoin every day. As more and more people transact in bitcoin – and futures and options – they will reduce bitcoin’s volatility and make it more attractive to hold.

I believe that while bitcoin’s volatility is advantageous over the short term, over the long term it will enjoy a virtuous, self-reinforcing cycle of less volatility and more public participation. That will lead to even less volatility and even more public participation… which will produce a huge increase in the size and power of cryptocurrencies.

I’m super-bullish on bitcoin’s future. It’s a thoughtful currency play that counters the our current inflationary environment. Consider it digital gold.

Bitcoin and altcoins are increasingly sought-after alternatives. They offer a potentially more secure and better way to lessen the risk of holding cash.

In my view, bitcoin’s future has never looked brighter, nor has there been a better time to get in on this world-changing technology to help hedge against the chaos that continues.

New to cryptocurrency and unsure where to start? Not to worry, InvestorPlace has you covered.

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Inflation Hedge No. 4: Bitcoin

The best way to get exposure to Bitcoin (BTC) is to simply buy it on any of the major cryptocurrency exchanges.

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Inflation Hedge No. 5: Real Estate

By Brian Hunt, CEO, InvestorPlace

No guide on protecting and growing your wealth would be complete without covering one of the greatest wealth building tools on the planet.

That tool is real estate.

Most smart people love the idea of owning real estate.

Land is a permanent asset. You can earn income from real estate. You can safely leverage it. It has an excellent track record of producing returns.

For these reasons, real estate has been a powerful wealth preservation and growth vehicle for thousands of years. We believe it has a place in any inflation-proof portfolio.

In this section, we explain how it works.

We’ll start out by saying the power of real estate hits you when you take a simple walk outside and look around. The power of real estate will look you right in the face.

What will you see outside?

If you’re in a good-sized town or city, if you go outside for a walk, you’ll see apartment buildings, office buildings, gas stations, hospitals, hotels, convenience stores, and all kinds of shops.

Or maybe you live near a mall, an airport, or a factory.

The places I’ve just described are fixtures in everyday modern life. They are modern life.

We live in homes and apartments. We work in offices and factories. We go to the gym. We go to the doctor. We go shopping and eat out at restaurants. We buy gasoline, groceries, and gadgets. We store things in warehouses and self-storage units.

Even if you live in the middle of “nowhere,” you’re likely surrounded by acres and acres of profit-producing farms or timberland.

In America, we make hundreds of millions of transactions every day for what we want and need. At the center of all these different transactions – the foundation it all rests on – is real estate.

Restaurants, offices, shops, grocery stores, homes, labs, factories, storage facilities, warehouses, and hotels all need physical locations. People need to live in apartments and houses.

That means billions of dollars will be paid in rent every single month in America.

We need real estate in a much more profound way than we “need” new Teslas, new iPhones, new clothes, or new sneakers. Real estate is the most fundamental and necessary asset in the world.

Try buying food from a grocer with no stand or store. Try farming with no fields. Try operating a store with no walls, no doors, and no roof.

You can’t do it. You have to have real estate.

As a result, we all pay rent – either indirectly or directly – every single day.

When you buy food, you pay a little bit of the grocer’s rent.

When you visit the doctor, you pay a little bit of her rent.

When you buy a shirt, you pay a little bit of the store’s rent.

When you buy something on Amazon, you pay a little bit of Jeff Bezos’ rent.

When you buy a month of Netflix, you pay a little bit of that company’s rent.

All across America, huge rivers of rent payments flow from town to town, state to state, and coast to coast.

The value of all those rent checks runs north of $1 trillion annually… multiple times the value of all the cars and smartphones sold in the United States.

Why “Wealth” and “Real Estate” Are Synonyms

As I said, we all pay rent in some form or another.

That’s why “wealth” and “real estate” are virtually synonymous in America.

You might recall becoming aware of this fact at a young age. Wherever you grew up, chances are very good that the richest families owned the best real estate.

Real estate is power and wealth. Wealth and power are real estate.

Since the demand for real estate is so pervasive and so reliable, owning real estate can easily become one the most lucrative, most empowering things you ever do. It’s a much safer, much more predictable way to invest than the stock market.

Whether you like it or not, investing forces you to make bets on the future. It forces you to make some forecasts.

With this in mind, think about these facts…

• It’s very hard to predict which tech company will produce the best app or the best gadget. But it’s very easy to predict that all those companies will have to pay office rent.
• It’s very hard to predict which restaurant chains will dominate in five years. But it’s very easy to predict that all those restaurants will have to pay their landlords or they will quickly go out of business.
• It’s very hard to predict which stores on New York City’s legendary Fifth Avenue will be the most successful in a decade. But it’s very easy to predict that all the stores on Fifth Avenue will have to pay rent in order to survive.

In fact, I can confidently say the following …

Predicting which app, gadget, store, or restaurant concept will be successful five years from now is the equivalent of a 20-foot put in golf (difficult). Predicting that all the companies in all those businesses will need real estate and be willing to pay big bucks in rent is the equivalent of a two-inch put (close to unmissable).

A 20-foot put… or a two-inch put? Which would you rather your wager your savings and retirement nest egg on?

It’s not a trick question.

Because quality real estate is in such high demand, it typically holds its value in an inflationary environment. As the price you pay for things goes up, so do the value of your real estate holdings.

Chances are, you knew owning real estate is a good idea before you started reading this guide. Now that we have that out of the way, let’s talk about how to do it.

Speaking generally, there are two ways to go about it as an investor: directly or indirectly…

Direct Real Estate Investment

When you invest in real estate directly, you buy and manage the property yourself. This can be very lucrative, but it also takes a lot of time and energy to do it properly. Plus, there are many challenges.

For starters, how well do you understand the business of real estate? As Warren Buffett says, “Invest in what you know… and nothing more.”

When it comes to real estate investing, how well do you know it? Within the real estate industry, there are many different ways to be involved, and each way is slightly different.

For instance, you could invest in single-family rental homes… or vacant land… or multifamily properties… or office buildings… or retail buildings… or specialized real estate, like a mobile home park.

There are tons of way to be a real estate investor. Whatever area you choose, it takes a LOT of work and time to really understand it.

But for simplicity, let’s say you want to buy and rent single-family homes…

First, you have to become educated about the housing market in which you’re going to invest. What are average home prices? What are average rents? Are market values increasing or decreasing? Why? How do things like the local schools, shopping areas, and crime affect neighborhood values?

Next, you have to develop a keen sense for finding quality tenants. After all, if you end up leasing your new property to a tenant who treats it badly or lacks the ability to pay your rent, it can turn into a nightmare very quickly.

But let’s assume you find a good tenant. Now you’re a landlord. This means you’re on the hook for just about everything.

The AC breaks down? It’s on you to fix it – and pay the hefty repair bill.

The toilet gets clogged? You’re getting the call to deal with it immediately, even though it’s a Saturday afternoon and you’re on the golf course.

Termites in the kitchen? Break out your checkbook and start looking for a good exterminator.

And if you don’t want these headaches, well, break out your checkbook anyway because you’re going to have to hire a good property manager.

Of course, that has its challenges, too. How can you be sure you’re hiring a good property manager? How much should you pay them? Plus, this is going to reduce how much money you’re making from your real estate investment. Is it worth it?

Yes, investing directly in real estate can be rewarding, but you can see that succeeding in it requires a lot of time and expertise. Honestly, it is probably not for most people…

So, what’s another, perhaps easier, way to be a real estate investor?

Indirect Real Estate Investment

You can also own real estate through the stock market… by owning real estate investment trusts, or REITs.

REITs are businesses that own income-producing real estate in all sorts of sectors (single-family homes, apartments, offices, storage centers, and so on).

Most REITs own dozens of properties in different regions.

For example, the big shopping mall REIT Simon Property Group Inc. (SPG) owns hundreds of malls across America. The big office REIT Boston Properties Inc. (BXP) owns more than 150 office buildings across America. The big apartment REIT Equity Residential (EQR) owns over 70,000 apartment units across the country.

You know how ETFs allow investors to own big groups of stocks with just one click in a brokerage account? You can think of REITs like ETFs for properties.

To be considered a REIT by the government, a company must pay out at least 90% of its taxable income to its shareholders. This means REITs can be a great source of cash-flow for investors like you and me.

Benefits of Investing in REITs

REITs offer investors many benefits not found with traditional, direct real estate investing.

1. A REIT Provides Greater Safety: As any real estate investor who was burned in the U.S. housing bubble can tell you, owning an investment property all by yourself can be extremely dangerous. What if you buy at the wrong point in the market cycle and the value of your property starts dropping? What if rents begin to decline, and they get so low that they’re unable to cover your mortgage? Or, like we talked about earlier, what if you get a nightmare tenant who stops paying rent, forcing you to go through the lengthy, complicated eviction process?

REITs can help you avoid all of that. This is because when you invest in a REIT, you’re investing in many properties all at once – sometimes hundreds or even thousands. If anything bad happens to a single one of them, your entire investment isn’t affected. Your wealth is diversified, and that makes your money far safer. (More on that in a moment.)

Think about it: If you buy a rental property, odds are you’ll be forced to put down a hefty down payment. Depending on the market and the type of property, this could easily be in the tens, if not hundreds, of thousands of dollars. And remember, that’s just for one property!

This is the proverbial “putting all your eggs in one basket” mistake.

With REITs, you could take that same amount of money you used for your down payment and spread it across all sorts of different REIT sectors – say, residential, corporate, retail, specialty, etc. This enables you to diversify your wealth by sector, geography, and hundreds or thousands of different, unique properties.

The result? Your money is far more insulated from any sort of negative news that might impact one specific investment. Diversification isn’t just about “playing defense” with your invested dollars. It also sets the stage for big winners. You see, being invested in more REIT sectors increases the odds that one of those sectors produces great returns for you.

When you’re well diversified, part of your invested dollars would be benefiting from that specific hot sector. If all your money is tied up in one down payment on a single rental property, you could be missing out.

2. REITs Offer Stability: When you invest in the latest high-flying tech stock, you better have an iron stomach. Those sorts of investments can be down 25% one day, up 15% the next, then down another 40% the day after. Frankly, this can be really hard on an investor’s emotions, oftentimes resulting in a sale at exactly the wrong time.

When you invest in a REIT, it’s far more stable. You rarely see those kinds of huge price swings in quality REITs. And that’s for good reason: Real estate isn’t a volatile investment because the variables that affect real estate values don’t change quickly. Instead, they tend to rise or fall relatively slowly, over many quarters – not days. This makes your REIT investment far easier on your nerves.

3. REIT Investing Offers the Huge Benefit of Liquidity: Because REITs trade like stocks, if you experience a personal emergency that requires cash immediately, you can sell your REIT shares just like normal stock shares.

If you owned a rental home, how quickly do you think you could sell it? Whatever your answer is, I guarantee it’s not “immediately” like it is with a REIT investment. (And let’s not forget the real estate broker fees that would eat away at any profits you might have made!)

4. REITs Pay Out Large Yields: As mentioned earlier, REITs are required to pay out at least 90% of taxable income to shareholders in the form of dividends. This means dividend checks that are significantly larger than normal stock dividends. For example, as I write, the average dividend of the S&P 500 is 2.04%. Meanwhile, the FTSE Nareit All REITs Index yields 4.3% – more than twice as much.

But that’s just the start. Many REITs offer significantly greater yields. It’s common to find yields from quality REITs coming in upward of 8%, 10%, even 12%.

Let’s put this into perspective. Say you made two investments.

Investment A is $25,000 put into the benchmark S&P 500, yielding 2.04%. You’re going to reinvest your dividends.

Investment B is a high-quality REIT yielding 10%. You’ll also be reinvesting your dividends.

After 20 years, how do the returns of these two investments compare?

Assuming there’s been zero capital appreciation, the S&P 500 investment has climbed from $25,000 to $37,441. That’s 50% higher – and remember, those gains have come through nothing other than reinvesting dividends. Not bad!

But that’s nothing compared to how our REIT performed. The 10%-yielding REIT grew from $25,000 all the way to $168,187! That’s a gain of over 570%! From dividends alone!

That’s the massive, wealth-generating power of big-yielding, high-quality REITs.

But enough with hypothetical comparisons. Let’s look at real, historical market data to see how REITs have performed over the years relative to stocks.

The Long-Term Market Performance of REITs

Pop quiz! Take five major asset classes: U.S. stocks, international stocks, long-term government bonds, Treasury bills, and REITs.

If you compared their compound rate of return since 1972, which would come in highest? Though it surprises most people, if you guessed stocks (either U.S. or international), you’d be wrong.

Below is a chart from the research firm Morningstar comparing returns for these asset classes from 1972 through 2017. It assumes a hypothetical investment of $1 in each asset class in 1972.

As you can see, REITs returned the most, leading the way with a compound annual return of 11.8%. That’s right: Real estate stocks outperform regular stocks.

Remember our hypothetical $25,000 investment from a moment ago?

Had we invested it in a basket of REITs yielding 11.8% for 50 years (from 1972 until today in 2022), we’d be sitting on a staggering $6.6 million portfolio.

Summing Up

One more time for emphasis: Real estate is the most fundamental and necessary asset in the world.

Restaurants, offices, shops, grocery stores, homes, labs, factories, storage facilities, warehouses, and hotels all need physical locations. People need to live in apartments and houses.

That means billions of dollars are paid in rent every single month.

We all pay rent – either indirectly or directly – every single day. The demand for real estate is as reliable as the setting sun – and that’s why “wealth” and “real estate” are virtually synonymous.

Real estate is power and wealth. And when purchased intelligently, it can be a large and stable source of passive income for decades. The value of your real estate holdings and the size of the rent checks they generate can rise during times of high inflation.

This makes it a great part of any inflation-proof wealth plan.

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Inflation Hedge No. 5: Real Estate

Aside from REITs, another good way to get exposure to the real estate market is with the Vanguard Real Estate Index Fund (VNQ).

VNQ is a low cost, diversified real estate fund. It gives you exposure to all the major real estate classes.

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A step-by-step plan that will grow your wealth during good times… and protect it during bad times.

By Brian Hunt, InvestorPlace CEO

Every year, U.S. News & World Report produces a list of what it calls the “Best Places to Live in the U.S.”

To create the list, the magazine evaluates more than 100 metro areas in terms of job market, natural surroundings, home affordability, crime rate, school quality, and other aspects.

Nearly every year, Colorado Springs, Colo., ranks at or near the top of the list. Nestled against the Rocky Mountains and featuring plenty of green space, Colorado Springs offers “mountain living” at its finest… which is why the city has enjoyed constant population growth since 1960 and become a media darling.

Colorado Springs doesn’t just attract people who like mountain views.

In the 1950s – during the height of the Cold War – the U.S. military picked Colorado Springs to be the home of the world’s most important, most powerful, most secure military command post.

In the wake of World War II, U.S. leaders were worried about nuclear war with the Soviet Union. The military decided it needed an ultra-safe, ultra-secure base from which it could command America’s nuclear arsenal.

After a long nationwide study, they selected Colorado Springs because of its distance from the coasts (attacking missiles or bombers would have to fly a very long way)… because it’s the most seismically sound region of Colorado (no earthquakes)… and because it’s next to a giant mass of granite named Cheyenne Mountain.

The military knew it could bury its command center below thousands of feet of Cheyenne’s solid rock… and make it able to withstand any kind of attack, including a nuclear one.

Starting in 1961, the U.S. Army Corps of Engineers began excavating hundreds of thousands of tons of rock from under Cheyenne Mountain. Inside, they built a complete military command center shielded by more than 2,000 feet of granite.

The entrance of the facility – called the Cheyenne Mountain Complex – is protected by giant 25-ton steel doors. The buildings inside sit on massive steel springs that could absorb the shock of a nuclear blast.

At its peak, more than 1,000 military personnel manned the Cheyenne Mountain Complex. It had huge stores of water, fuel, and food. It had its own electrical plant. These attributes made the facility self-sufficient in case of national emergencies. (Today, the Cheyenne Mountain Complex serves as NORAD and U.S. Northern Command’s Alternate Command Center as well as a training site.)

The Cheyenne Mountain Complex is an ultra-secure, ultra-safe example of what military experts call a “hardened” structure.

The term hardened appears frequently in military planning. Hardened structures are buildings – often built underground – that are highly fortified and resistant to attacks. They’re the most fortified structures on the planet.

Hardened structures are often wrapped in thick layers of rock, concrete, and steel. They are bomb proof.

The Cheyenne Mountain Complex is hardened like no other structure on Earth.

It is nuclear bomb-proof.

If the past 30 years of history have taught us anything, it’s that we all need to “harden” our financial lives and investment portfolios. We all want our money protected by the financial equivalent of the Cheyenne Mountain Complex.

As we’ve covered in this report… inflation isn’t going away any time soon. In order to protect your wealth and secure our financial future Louis Navellier, Luke Lango, Eric Fry, and I have walked you through five of the best investments to protect yourself from a continued inflationary environment.

We believe building and maintaining a “hardened” financial life is one of the smartest moves you can make for yourself and your family.

Your ability to earn money, save money, and grow your savings should be as safe and secure as the Cheyenne Mountain Complex.

As one of the world’s largest investment research firms, InvestorPlace hand selects and recommends many stocks and bonds each year for purchase by investors.

However, the world’s best individual stock and bond ideas aren’t worth much if they don’t fit inside a robust wealth management framework that provides you a great mix of safety and potential upside.

Every smart investor’s goal should be the construction and ownership of a crisis-proof, inflation-proof portfolio that can make you money during the good times… and keep you safe during the bad times.

In this chapter you’ll find step-by-step instructions for building just such a hardened, all-weather portfolio.

Smart Asset Allocation: They Key to Building a Hardened Portfolio

In the investment world, the art of “stock picking” gets the most press.

The financial media constantly reports on individual companies and their stock prices. People love to learn about interesting stocks with huge potential. After all, it’s exciting and fun.

However… when it comes to successful investing and building wealth safely, asset allocation is 100 times more important than stock picking. This is especially true in an inflationary environment.

Asset allocation is the part of your investment strategy that dictates how much of your wealth you place in broad asset classes like stocks, bonds, cash, commodities, precious metals, and real estate.

Over the course of your career as an investor, asset allocation will have a much, much greater impact on your wealth than stock picking will.

The ratio will be at least 100 to 1.

Many individual investors focus much of their time and energy on stock picking. They don’t spend any time learning what sensible asset allocation is. As a result, they take crazy risks with their savings.

However, investors interested in having a “hardened” financial life are very focused on asset allocation.

The most important aspect of asset allocation is using it to diversify your holdings across private businesses, public stocks, real estate, precious metals, cash, commodities, insurance, and other financial vehicles. (Many of the inflationary hedges we talked about earlier in this guide.)

Ideally, you want a mix of assets that greatly limits your exposure to a big decline in one asset class. Intelligent asset allocation means you DON’T bet the farm on a single stock or a single asset class.

For example, many of us can recall the catastrophic losses suffered by some employees of Enron. In the late 1990s, many investors considered Enron the world’s most innovative company. Its executives were the superstars of Corporate America.

So, some Enron employees placed all their retirement savings in Enron stock. Their asset allocation was “100% Enron.”

When Enron was revealed as one of the biggest frauds in American history, its stock went to zero. The employees who bet the farm on Enron were completely wiped out.

These people used absolutely horrible, incredibly risky asset allocation.

Or consider people who went “all in” on real estate in 2005 and 2006. Back then, the U.S. real estate mania was in full force. Real estate was considered a “can’t lose” bet.

So, many people put all their savings into real estate… and even took on loads of debt to “leverage” their returns. When the real estate market crashed, it wiped out these “all in” real estate players.

Absolutely crazy asset allocation was the heart of their downfall. They bet the farm on one asset class… and that asset class was in a bubble.

If you keep a huge portion of your wealth in one stock or a single asset class – whether it’s stocks, bonds, oil, gold, or real estate – you leave yourself exposed to a large decline in the value of that asset class.

You make yourself financially “fragile”… the opposite of hardened.

Given the big risks that going “all in” on one stock or one asset class presents, it makes great sense to diversify your wealth.

Think of it like eating a balanced diet. You want to include options from different food groups. Taken together, a mix of things helps you achieve maximum health.

Options on the investment menu include several “dishes” we’ve already discussed – and a few we haven’t…

• Stocks
• Bonds
• Gold
• Commodities
• Real Estate
• Bitcoin
• Privately Held Companies

There’s no “one size fits” all asset allocation strategy that is right for everyone.

When you (possibly with the help of a financial adviser) think about your right “mix,” you must consider your age, your risk tolerance, and your goals.

A 50-year-old who needs to pay college tuition for three children will think about asset allocation much differently than a 32-year-old with no family. And they both will approach it much differently than a 75-year-old retired empty nester.

However, most of us have a similar end goals.

We’d like a diversified, hardened collection of assets that generate income… even when we are not actively working. We want to see our net worth rise during bull markets… while also not seeing our net worth decline a lot during bear markets. We want the damage inflicted by events like the Great Recession of 2008 kept to a minimum.

We want our financial life to be crisis-proof and inflation-proof.

Again, having all that means being diversified across stocks, bonds, real estate, cash, precious metals, cash, commodities, insurance, and assets like cryptocurrency and private businesses.

A Great Asset Allocation Discovery

There are dozens of asset allocation models that can provide you with excellent diversification.

They can get you as close to a crisis-proof, inflation-proof hardened wealth plan as you can get. Some of them come from brilliant financial minds like hedge fund managers Ray Dalio and Rob Arnott.

Many of the models recommend owning a mix of assets like U.S. stocks, non-U.S. stocks, real estate, government bonds, gold, commodities, and private business.

For example, Arnott’s “all weather” portfolio allocation model recommends a portfolio have 30% in stocks, 40% in bonds, and 30% in “real assets” like commodities and real estate.

Meanwhile, Dalio’s hardened portfolio allocation model recommends a portfolio have 30% in stocks, 55% in bonds, and 15% in real assets.

Another diversified portfolio model, from respected investor Mohamed A. El-Erian, has 51% in stocks, 17% in bonds, and 32% in real assets.

With dozens of models to choose from, what is an investor to do?

I have good news for you: It turns out, if you get the basic idea of “diversification” right, the fine details don’t matter much.

Our friend Meb Faber is the CEO and chief investment officer of Cambria Investment Management. Meb is a brilliant guy and a master of using computerized analysis to evaluate investment and asset allocation models.

In 2013, Meb performed a comprehensive study of how various asset allocation models have performed over the long term. He studied many of the world’s most highly regarded models.

Meb found there isn’t much difference in the long-term results of the best models. Their long-term average annual returns are within about one percentage point of each other. They return 9% to 10% per year with much less volatility than an all-stock portfolio.

This means investors shouldn’t get hung up on whether they have 30% of their wealth in stocks or 35% in stocks. Getting in the general vicinity, percentagewise, is what counts.

Meb’s other big discovery concerns fees. He found that the amount of fees investors pay to own investments has huge effects on long-term performance… a much larger impact than the specifics of each model.

That’s right. Meb found that fees, not specific asset mixes, have the largest effect on investor returns.

So, don’t obsess over the fine details and the percentage point of your wealth in stocks vs. bonds. Instead, focus on driving your investment costs and fees into the basement.

For more on all that, we highly recommend Meb’s book Global Asset Allocation: A Survey of the World’s Top Investment Strategies.

If you’re interested in learning more about the critical importance of keeping your investment fees low or picking a “set it and forget it” asset allocation, Meb’s book is a great resource.

What Category Are You In?

To make the right asset allocation decisions for you, you must first make three decisions:

• What your risk tolerance is,
• What your financial goals are,
• And how long you have to achieve them.

Deciding who you are as an investor is critically important to your wealth plan. Especially one that will help usher you through a tough inflationary environment.

There’s an old saying: “If you don’t know who you are, the market is an expensive place to find out.”

Although we all come from different walks of life, have many different goals, and have various time frames, we can all be grouped into one of three investor categories:

• the Conservative Investor,
• the Growth Investor,
• and the Aggressive Investor.

To see which category best describes you – and the different asset allocation plans for each – check out the full version of our asset allocation guide here.

Don’t Forget to Rebalance!

Once an investor picks an allocation model, they can “rebalance” it at the end of each year.

For example, say you set your stock allocation at 30%. This is where you aim to keep your stock allocation at all times.

Now let’s say your stock allocation soars in value in a given year while your bond allocation does not soar in value.

This hypothetical increase in value makes it so your stock allocation grows to be 35% or 40% of your portfolio’s value.

In this situation, you’d sell some stocks at the end of the year and buy more of your other allocation groups. This selling of stocks and buying of other groups would “rebalance” your portfolio and get you back to your target allocations.

Summing Up

Stop “Obsessing Over Predictions”… and Get on With Your Life

My favorite part of this “Inflation Protection Plan” is that it goes a long way toward getting people out of the “obsessing over predictions” business.

Once you start investing and following the financial news, you’re sure to come across dozens of different financial predictions made by people with impressive credentials.

Some of these predictions will be wildly optimistic… like “DOW 100,000!”

Some of these predictions will be wildly pessimistic… like “Next Great Depression Ahead!”

If you’re a dedicated reader of financial news and research, you’ll come across hundreds of big predictions in a given year. It’s enough to make an amateur investor’s head spin. (It’s also enough to make a longtime professional investor’s head spin.)

I’m in the business of selling investment research… so allow me to take you behind the curtain of the financial industry: We know the louder and more audacious a prediction is, the more people will pay attention to it.

That’s how the world works. That’s why the hundreds of big predictions you hear each year can create brain overload. It can cause people to lose sleep at night, obsessing over something they read online. People can worry themselves straight into “analysis paralysis.”

When you put an inflation protection plan into practice, you don’t need to worry about inflation going up or down.

Moreover, you don’t need to worry about the next 15% move in the stock market. You don’t need to worry about rising interest rates. You don’t need to worry about bull and bear markets.

Of course, inflation and all sorts of other market and economic events can affect the value of your portfolio in the short term. But you can sleep easy at night knowing you have a robust, diversified portfolio that safely grows in value over time through inflation… and through bear markets, wars, bull markets, booms, recessions, crashes, and all the rest.

Sitting on top of your Inflation Protection Plan, you may wish to entertain wildly optimistic and wildly pessimistic predictions. You may wish to spend hours reading detailed forecasts or watching financial news.

But you can do it for entertainment and education… and not in the pursuit of worrying or frantically trading in and out of stocks.

You can get out of the obsessing over predictions business and get on with your life.

When the stock market goes through a big drop and your portfolio’s value is going lower and lower, it can be difficult to know what to do.

It’s an emotional time and mistakes are common when we are feeling pressure.

What about my retirement?

My kid’s college education?

My dreams of financial independence?

Well, when the market takes a nosedive there are some things you should do, and also some things you absolutely, positively SHOULD NOT do.

And we can learn a lot by looking at one of the biggest business stories of the past 100 years…

Amazon.

If you were asked to name some of the biggest stock market winners of the past century, there’s a good chance Amazon would come to mind.

After all, Amazon has gone from a small online bookseller to one of the world’s largest, most powerful companies. In 2020, the company’s market value reached a massive $1 trillion.

Amazon now sells virtually everything… and its founder, Jeff Bezos, is one of the world’s richest men.

As result, Amazon’s shareholders have enjoyed one heck of a ride…

Amazon’s market value has increased more than 120,000% since its IPO in 1997. That kind of gain turns every $10,000 invested into a stunning $12 million.

You probably also know why Amazon achieved such huge success. Its Prime membership program was a big hit. Its mastery of logistics lowered the price of almost everything. Its cloud computing business generated billions of dollars in annual revenue.

What you probably don’t know is what the Dow Jones Industrial Average did on March 4, 2015… or what the Dow did on October 18, 2013… or what the Dow did on ANY specific day of Amazon’s incredible rise.

You also probably don’t know what mortgage rates were on December 12, 2003… or where the Federal Reserve had short-term interest rates set at on July 27, 2011.

That’s because what the stock market and interest rates were doing on those days didn’t amount to a hill of beans compared to what Amazon’s business was doing.

Recessions, bear markets, and stock market corrections made a lot of headlines but proved to be tiny speedbumps on Amazon’s path to success.

What the market did or what made headline news on any specific day is meaningless compared to the power of Amazon’s business model, the massive online shopping trend it rode to success, and the moves its management made.

What really mattered to Amazon shareholders wasn’t the broad market, interest rates, or presidential elections. What really mattered was that Amazon constantly innovated, delivered value to its customers, and outperformed its competition.

The same goes for every innovative, successful company you can think of: Apple. Disney. Starbucks. Google. Tesla. Visa. Home Depot. Nike. Chipotle. Netflix. Hershey. Microsoft. McDonalds. Costco. Airbnb. Lululemon. The list goes on and on and on.

What interest rates or the stock market did during the ascent of these companies didn’t matter at all. Even recessions, bear markets, and stock crashes didn’t matter. Who was president didn’t matter.

What mattered was innovation, massive industry trends, delivering value to customers, and smart business models.

Here’s why this is so important to you as an investor…

If you invest in stocks for the long-term, you are guaranteed to live through bear markets, recessions, and corrections.

These declines – even if they are in the modest 15% range – will scare you.

They will make you question the idea of owning stocks.

If you invest in stocks for the long-term, you’re sure to come across tons of “bearish” news and predictions.

There’s a whole industry of journalists and financial analysts who constantly predict the fall of America, runaway inflation, the next Great Depression, and a host of other calamities.

These folks are born pessimists. No amount of positive things can shake them from thinking things are about to go to hell in a handbasket soon.

And you know what?

We listen to them!

Humans are hardwired to pay close attention to potential dangers.

A hundred thousand years ago, it’s how we survived. Constantly worrying that a tiger or bear could be around the corner was a valuable instinct.

These days, we don’t have much to fear from bears or tigers.

However, our instincts make us pay close attention to potential dangers… both real and imagined. So, our subconscious minds compel us to click on bearish headlines, fixate on disasters, worry about elections, buy magazines with gloomy forecasts on their covers, and fret over 15% stock market corrections.

Or as media insiders like to say, “Fear sells” and, “If it bleeds, it leads.”

I encourage you to let common sense and the facts shape your actions instead of leaving it up to caveman thinking.

You’ll be far more successful investor if you do.

Why do I say that? And what are the facts?

Well, just consider that the stock market has averaged a positive annual return of 10% for the past 100 years. This is because the trend of increasing prosperity that is powered by free markets and free enterprise is one of the strongest trends in human history.

And here’s another important fact…

During the 20th century, stocks appreciated in value by 1,500,000%.

A 1,500,000% return turns every $100 invested into $1.5 million.

But wait…

Wasn’t the 20th century filled with wars and recessions and other awful things?

Yes.

There were two huge world wars, which killed tens of millions of people and devastated large portions of the world.

You also had the Great Depression… the Korean War… the Cuban Missile Crisis… the Watergate scandal … the inflation of the 1970s… the Arab oil embargo… the Vietnam War… and the savings and loan crisis of the 1990s.

You also had more than a dozen recessions and five horrible bear markets.

Despite all these horrible things, U.S. stocks appreciated in value by 1,500,000% during the 20th century.

Despite something bad happening every decade, incredible wealth was created by innovative businesses like Coca-Cola, Ford Motor, Apple, Hershey, Intel, Disney, General Electric, McDonald’s, Proctor & Gamble, Wrigley, Tootsie Roll, Pfizer, Microsoft, Walmart, Starbucks, and thousands of others.

We all know there are problems in America… like debt, poverty, and inequality.

These topics are covered daily in the news. They are the subjects of best-selling books. They have many people paralyzed by fear.

But if you know your history and know how powerful American innovation is, you know this is no cause to sell your stocks and crawl into a hole.

You know that for every ONE problem in America, there are THOUSANDS of brilliant people working on innovative solutions. They are developing amazing products and services that will make our lives better.

These are the types of people who invented the light bulb… the television… the pacemaker… the airplane… and the iPhone.

They are people who have the brains and worth ethic to create incredible businesses like Starbucks, Facebook, Amazon, Whole Foods, Apple, Nike, and Google.

These companies have provided good jobs to millions of people… they provided goods and services to thankful customers… and they produced hundreds of billions of dollars in wealth for their shareholders. All by creating and innovating.

Even better, these kinds of folks work in America. Despite what some Debbie Downers like to say, the legendary investor Warren Buffett is right: America is still the greatest place in the world to do business.

We have deep and liquid capital markets.

We have rule of law.

We have excellent accounting standards, which creates transparency.

We encourage and foster innovation.

We respect property rights.

We have an excellent transportation network (if you’ve fallen for the myth that U.S. infrastructure is terrible, I urge you to visit a third world country for comparison).

We have a huge population of well-to-do consumers ready to buy great products and services.

The advances made by American entrepreneurs allow today’s average American to live better than a king did 100 years ago.

Even people in America’s “low income” bracket have better medical care, better food, better transportation, and better access to information than anyone did in 1919, no matter what their level of wealth.

In other words, free markets, innovation, and productive enterprise has allowed mankind to achieve incredible progress despite wars, recessions, and bear markets.

It’s been that way for centuries… and it will continue to be that way in the future.

Below is a chart of the Dow Jones Industrial Index from post-World War II through 2021

Incredible, right?

The stock market declines of 1987, 2000, and 2008 – while painful at the time – are just speed bumps on the long-term chart. And the takeaway is clear: Over time, American prosperity rises and the stock market goes up.

With this picture in mind, my advice is to “make the trend your friend” and ignore the naysayers. Don’t panic over a market correction and don’t let the fear-stoking headline of the hour scare you out of your holdings of high-quality innovative companies that are poised to change the world.

During stock market corrections, I ask you to focus on what really matters: progress, transformational industry trends, creating value for others, and innovation.

Remember that despite all the negative occurrences of the past 100 years, shareholders of innovative companies that serve their customers have made fortunes.

It’s been the surest way to get rich in America for more than 100 years. It will be that way for at least 100 more. That’s why staying bullish on human progress and innovation is at the foundation of what we do at InvestorPlace.

It’s also why, when our subscribers write in to ask if we have “bear market survival” plans, we send them this essay.

Our “bear market survival” plan consists of reviewing the facts above, thinking long-term, and looking to buy high-quality stocks at discount prices.

Our “bear market survival” plan does not consist of selling stocks in a panic.

I believe that when an investor can “deprogram” themselves from obsessing over “the market” and interest rates – and instead focus on the things above – the things that history has shown really matter – that investor ascends to a higher level of understanding when it comes to money and investing.

It’s one of the most important milestones on the journey to mastering money.

The Next Time You’re Tempted to Panic, Look at These Eight Charts

Since 1928, there have been 26 bear markets in the benchmark S&P 500 stock index. After each and every one of them, stocks went on to reach all time highs. The track record here is perfect.

Recent history has eight outstanding examples of why a smart “bear market strategy” consists of keeping the facts in mind, thinking long term, and not getting scared out of stocks.

We like to think these eight charts are an antidote to a harmful financial disease we call “Short-Term-itis.”

For example, during the famed 1987 “Black Monday” crash, the stock market dropped 33.5% in a single day. It caused a short-term global financial panic.

However, less than two years later, the stock market reached an all-time high.

Then you have the big stock market decline of 1990, which was created by worries over a U.S. recession and the Gulf War. Stocks fell 19.9% during this decline. However, stock recovered and hit a new all-time high less than a year later.

Then you have the big 1998 market decline. Stocks fell 19.3% over the span of a few months. Stocks quickly recovered and reached a new all-time high by early 1999.

Then you have the 2000-2002 bear market. This crash came after the dot.com reached its frenzied peak in March 2000. Although this was one of the worst market downturns in U.S. history, stocks went on to recover and reach new all-time highs in 2007.

Next you have the stock bear market that accompanied the Great Financial Crisis of 2008. Stocks fell an incredible 56% during the decline. However, stocks went on to recover and entered a historic bull market that lasted a decade. Fortunes were made during the recovery and the market reached a new all-time high in 2013.

In the midst of the decade-long recovery that followed the 2008 crash, the market saw a decline of about 19% in late 2011. Stocks recovered and reached a new all-time high by early 2012.

In 2018, the market suffered a gut-wrenching decline of 19%. But by the summer of the following year, stocks had recovered and reached another new all-time high.

Then there is the covid-19 related stock market drop and recovery of 2020. When the world realized covid-19 was a serious worldwide problem, the market fell 53% in less than two months. However, government stimulus helped the market recover and stocks reached a new all-time high by the end of the year.

Summing Up

You’ve just gone on a tour of the biggest financial disasters of the past 60 years.

You’ve reviewed the most famous, most horrible bear markets and stock crashes in history… like the Black Monday crash of 1987… the dot-com crash of 2000… and the Great Financial Crisis of 2008.

You’ve also seen the track record here is perfect. Each period of rough times was followed by all-time highs.

These recent recoveries highlight a very long trend…

Every major stock market correction, every crash, every bear market in American history has been followed by new all-time highs.

That’s why we state once again… FOR EMPHASIS…

During stock market corrections, focus on what really matters: progress, transformational industry trends, creating value for others, and innovation.

Remember that despite all the negative developments of the past 100 years, shareholders of innovative companies that serve their customers have made fortunes.

Remember that it pays to bet on America.

Remember that a wise “bear market survival” plan consists of reviewing the facts above, thinking long-term, and staying long stocks.

Regards,

Brian Hunt

New tariffs from Trump roil the market (again)… the case for a bullish bounce… a key bearish line-in-the-sand… our experts are buying… a critical perspective

This morning, President Trump ratcheted up the tariff war, ordering tariffs on Canadian steel and aluminum to be increased another 25%, taking the full duty to 50%.

The policy goes into effect tomorrow morning.

Here’s Trump on Truth Social explaining why:

Based on Ontario, Canada, placing a 25% Tariff on “Electricity” coming into the United States, I have instructed my Secretary of Commerce to add an ADDITIONAL 25% Tariff, to 50%, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA, ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD.

In response, Ontario Premier Doug Ford threatened to shut off electricity to U.S. customers.

This is what trade wars look like.

Before this morning’s news, stocks appeared to be attempting to form a base. After 30 minutes of trading, the S&P 500 was flat, the Dow Jones Industrial Average was modestly lower, and the Nasdaq Composite was up about 0.70%.

But within minutes of Trump’s tariff announcement, all three major indexes fell into the red. As I write, the Nasdaq has clawed back to a small gain. Who knows where we’ll end the day?

Stepping back, let’s look squarely at this volatility.

What’s the potential for a bounce? How bad might it be if we keep falling? And how do our experts assess this pullback overall?

Let’s begin with the bull case.

Are we nearing technical exhaustion?

Let’s begin by looking at the S&P 500’s Relative Strength Index (RSI) indicator.

For newer Digest readers, the RSI is a momentum indicator that measures the extent to which an asset is overbought or oversold.

A reading over 70 suggests an asset is “overbought” (and likely poised to pull back as traders take profits) while a reading below 30 means it’s “oversold” (and poised for gains as bargain-hunters step in and buy).

As I write Tuesday, the S&P’s RSI is 28 – officially “oversold.”

As you’ll see below, in the last two years, there have been four times when it reached this general level. In each of those times, stocks jumped higher in the following days, though the ensuing bullishness had differing durations.

This doesn’t guarantee that we’re in for a bounce, but it increases those odds.

We get a similar takeaway from the S&P’s Moving Average Convergence/Divergence (MACD) indicator. It reflects changes in a price trend’s strength, direction, momentum, and duration.

It’s now at its lowest level since 2022’s bear market low.

Source: TradingView

It’s hard for such extremes to remain for long.

You might think of it like a rubber band. The greater this MACD (and RSI) stretches, the farther/faster the ensuing snapback rally often is when the tension eventually releases.

So, if a reversion rally is in the cards, how high might we go?

The case for an 8%+ bounce

To help us with this analysis, we’re going to master trader Jeff Clark.

For newer Digest readers, Jeff is a market veteran with more than four decades of experience. In his service, Jeff Clark Trader, he profitably trades the markets regardless of direction – up, down, or sideways.

Over the last few days, one of Jeff’s indicators has been flashing a “bull” signal. From Jeff this past Friday:

The Volatility Index (VIX) just generated its third broad stock market “buy signal” of 2025. All three occurred within the last 10 days.

The first two signals reversed immediately. So, bullish traders are hoping this third time will be the charm.

As a quick reminder, VIX buy signals occur when the index closes above its upper Bollinger Band and then closes back inside the bands.

Jeff notes that while this indicator’s track record is excellent, it’s not perfect. Sometimes, instead of rallying immediately after the indicator triggers, the stock market falls. This pushes the VIX above its upper Bollinger Band again, negating the buy signal.

As Jeff just noted, the VIX Indicator has given us two false positives in the last two weeks. This is highly unusual.

Back to Jeff:

It is [incredibly rare] to get two failed VIX buy signals back-to-back – thereby setting the stage for a “triple” VIX buy signal. That is, however, what the market is set up for right now…

When it happens, it leads to “V” shaped rallies.

For example, last July/August we got a cluster of three VIX buy signals in about a two-week period. The first two signals failed.

Following the third signal, though, the S&P 500 rallied 400 points (8%) in about 10 days.

A similar move this time around would have the S&P 500 challenging the top of its recent trading range – near 6100 – by St. Patrick’s Day.

Our hypergrowth expert Luke Lango just ran a study suggesting a bullish move could go even higher

As usual, historical data and market history underpin Luke’s analysis.

This time, he ran a study on the Nasdaq-100. Luke prefers the Nasdaq-100 because we live in a tech-based economy, and this index includes the world’s largest 100 tech companies.

Luke evaluated what happened after the Nasdaq-100 closed below its 200-day moving average (MA), which it did earlier this week for the first time in more than a year.

Here’s Luke:

[The Nasdaq-100] has crossed below its 200-day moving average precisely 11 times before since 1990.

All 11 times, the market was either on the cusp of a big rebound or big breakdown – and which way it went depended on how the market acted in the subsequent two weeks.

Per Luke, if the Nasdaq-100 can remain within 4% of its 200-day MA, stocks always rebounded over the next 12 months, with average gains of over 25%.

Given this, Luke issued five “buy” alerts in his service Innovation Investor yesterday.

From Luke:

We view the odds of an economic recovery as being significantly greater than the odds of an economic recession…

And we therefore believe the odds of stocks soaring over the next year – and this being a great buying opportunity – as being significantly higher than the odds of stocks crashing over the next year.

So… let’s get aggressive here.

Regular Digest readers see me reference the following quote regularly, but this is a great time to highlight it. From billionaire Rob Arnott, founder and chairman of the board of Research Affiliates:

In investing, what is comfortable is rarely profitable.

But what happens if the Nasdaq-100 fails to hold within 4% of its 200-day MA?

That brings us to the potential downside of this recent selloff.

Let’s return to Luke:

[In our case study analysis,] if the Nasdaq-100 didn’t play strong defense and fell more than 4% below its 200-day moving average over the subsequent two weeks, stocks always slumped into a bear market.

This happened in early 1990 (right before the ’90s recession), mid-2000 (right before the dot-com crash), early 2008 (right before the 2008 financial crisis), and early 2022 (right before the inflation crash).

As I write on Tuesday, the 200-day MA sits at 20,323 while the index trades at 19,452, which means it’s just a shade over 4% lower.

We’re holding the line…barely. Clearly, we want to see some bullishness soon.

But if this market continues dropping, let’s maintain perspective

I’m in regular communication with many of InvestorPlace’s analysts… and I can tell you that, while cautious, they’re seeing opportunity.

We just highlighted how Luke put his money where his mouth was yesterday, recommending five new stocks.

He wasn’t the only one. On Friday, our global macro expert Eric Fry, editor of Fry’s Investment Report, made a new recommendation. Given the volatility, he wrote:

Anyone who [buys] shares of [this recommendation] today might not be happy about that purchase one week from now, or even one month from now, but I believe they [will] be very happy about it one year from now.

And we can throw legendary investor Louis Navellier into the mix.

As we’ve been highlighting in recent days, Louis is holding a live event this Thursday at 1 p.m. Eastern to prep investors for Nvidia Corp.’s (NVDA) “Q-Day,” which takes place one week from Thursday.

Here’s Louis explaining what’s behind the upcoming briefing:

In the third week of March, we’re going to have the big NVIDIA Corporation annual conference – the developers conference.

I expect Nvidia to announce a new breakthrough technology that could light a fire under the shares of one of its “Q” partners… a stock 1,000 times smaller than Nvidia.

It’s my top quantum pick, a small-cap stock protected by 102 patents with close ties to NVIDIA.

Though I don’t know all the details of Louis’ presentation, my hunch is that this broad market pullback has just made his preferred quantum stocks even more attractive from an entry valuation perspective. What I know for sure is that Louis has been banging the drum on this opportunity.

To learn more about his event and register for free, click here.

Finally, let’s wrap up with big-picture perspective

For this, we’ll turn to InvestorPlace’s CEO, Brian Hunt.

As longtime Digest readers know, beyond helming InvestorPlace, Brian is an accomplished trader/investor who loves teaching/writing about the topic.

In 2022’s bear market, Brian wrote an essay that’s critical for investors to remember as markets sell off. I encourage you to read the entire piece right here. But to prevent us from running too long, I’ll excerpt its takeaway to wrap us up today:

When the stock market goes through a big drop and your portfolio’s value is going lower and lower, it can be difficult to know what to do.

It’s an emotional time and mistakes are common when we are feeling pressure.

What about my retirement?

My kid’s college education?

My dreams of financial independence? …

These declines – even if they are in the modest 15% range – will scare you.

They will make you question the idea of owning stocks…

During stock market corrections, I ask you to focus on what really matters: progress, transformational industry trends, creating value for others, and innovation.

Remember that despite all the negative occurrences of the past 100 years, shareholders of innovative companies that serve their customers have made fortunes.

It’s been the surest way to get rich in America for more than 100 years. It will be that way for at least 100 more. That’s why staying bullish on human progress and innovation is at the foundation of what we do at InvestorPlace.

It’s also why, when our subscribers write in to ask if we have “bear market survival” plans, we send them this essay.

Our “bear market survival” plan consists of [remembering the long-term strength of the stock market], thinking long-term, and looking to buy high-quality stocks at discount prices.

Our “bear market survival” plan does not consist of selling stocks in a panic…

It’s one of the most important milestones on the journey to mastering money.

Have a good evening,

Jeff Remsburg

There’s no way to sugarcoat it. The market’s a disaster right now, folks.

The tariffs on Canada and Mexico, as well as the 20% tariffs on China, have sent the stock market spiraling lower in March. Even though President Trump backpedaled and postponed some of the tariffs on Canada and Mexico until April, it was too little, too late for many investors.

The S&P 500, Dow and NASDAQ have all erased their post-election gains. In fact, in the first six trading days of March alone, all three indices fell more than 4%.

Breaking news keeps jerking the market around, too. The markets fell this morning after President Trump announced even bigger tariffs on Canadian aluminum and steel – only to stage a rebound as news broke that Ukraine agreed to a 30-day ceasefire negotiated by the United States if Russia accepts the plan.

But believe it or not, a future billionaire is making their first move today.

George Washington once said that when you have a people who are “possessed by the spirit of Commerce,” they can achieve anything.

I don’t think our first president would realize just how true those words were.

Consider Jeff Bezos. At 30 years old, he quit a cushy Wall Street job to sell books online – at a time when most people barely used the internet.

Now, Amazon.com, Inc. (AMZN) dominates global commerce… and Bezos has a $215 billion net worth.

Or Bill Gates. He dropped out of Harvard to build software. Most people didn’t even own a computer back then.

Today, Microsoft Corporation (MSFT) is a $3 trillion giant… and Bill Gates is worth about $108 billion.

Mark Zuckerberg… Elon Musk… I could go on.

These guys weren’t lucky. They didn’t become billionaires overnight. They were talented, worked hard, and took advantage of life-changing opportunities whenever circumstances (or fate) came along.

They are the epitome of the American dream.

Now, I am no Bill Gates or Jeff Bezos. Frankly, I am also more of a “car guy” than a “rocket ship guy.”

However, I do like to say that my life story is also the embodiment of the American dream.

I wasn’t born with a silver spoon in my mouth. I’m the son of a stone mason and the first in my family to go to college. Today, I live a lavish lifestyle – and it’s all thanks to the market-beating system I created over four decades ago.  

Believe it or not, I stumbled onto this system by accident when I “failed” a specific assignment at Cal State Hayward in the late ’70s.

So, in today’s Market 360, I want to tell you about the failed assignment that started it all for me. I’ll explain how it led me to create a system that would find some of the market’s biggest winners over the past few decades.

In fact, it helped me find NVIDIA Corporation (NVDA) when it was trading at just $1 (split-adjusted) in 2016. We all know what happened after that – the stock went up by more than 7,000% at its peak.

Then, I’ll wrap things up by telling you about the 50X profit opportunity my system is alerting me to today… and where you can learn more about it.

Editor’s note: “How an Elon Musk Venture May Offer Security in the Meltdown” was previously published in February 2025 with the title, “The Best Elon Musk Venture for Unlocking 2025 Gains.” It has since been updated to include the most relevant information available.

We won’t sugarcoat it; the stock market is in turmoil right now.

Yesterday – Monday, March 10 – the Dow Jones lost almost 1,000 points. The S&P 500 dropped nearly 3%, while the Nasdaq crashed 4%. 

It was one of the worst days on Wall Street since September 2022. And it continues what has been a horrible few weeks for stocks.

The S&P has sunk 9% from its recent highs in February, essentially matching its largest correction since 2022.

The Nasdaq has crashed almost 14%, its largest correction since 2022.

The Russell 2000 has collapsed more than 17%, also matching its largest correction since 2022.

Collectively, the “Magnificent 7” tech stocks have slumped over 20%, slipping into their first bear market since – you guessed it – 2022.

This is, by most metrics, the worst stock market selloff in more than two years.

But that may also mean it’s the best buying opportunity we’ve seen in that time, too…

Be Greedy When Others Are Fearful

As Wall Street legend Warren Buffett says, it’s best to be greedy when others are fearful. 

Historically speaking, this rings true.

According to the weekly American Association of Individual Investors (AAII), investor sentiment is currently as bearish as it’s basically ever been. Since the 1980s, every time investor sentiment was as bearish as it is today, stocks always soared over the next 12 months for an average gain of nearly 30%.

Meanwhile, the Nasdaq 100 has dropped below its most important technical support line – the 200-day moving average – for the first time in over a year. It has done the exact same thing precisely 11 times before since 1990.

Every time the market played strong defense at these levels and stayed within 4% of its 200-day moving average over the subsequent two weeks, stocks always rebounded over the next 12 months, with average gains of over 25%. This happened in early 1992, early 1996, late 1997, early 2004, mid-2010, late 2014, and late 2018.

So… while stocks are in turmoil right now… the data is saying that this may end up being a great buying opportunity.

Taking a Cue From Elon Musk

To help us find the best stocks to buy amid this market meltdown, we are setting our sights on someone who probably knows more about making money than anyone else – the world’s richest man himself, Elon Musk.

Long gone are the days when Elon Musk was merely ‘the Tesla guy.’

The billionaire entrepreneur has brought electric cars to the mainstream and reimagined rocket launches and space travel. He’s working to develop brain implant technology that allows humans to control devices with their thoughts. He aims to reinvent social media with X and introduce fully autonomous humanoid robots via Tesla’s (TSLA) Optimus.

And now Musk is taking on his boldest mission yet—tackling government waste as President Trump’s head of Department of Government Efficiency (DOGE).

As if he wasn’t already powerful enough, the world’s richest man has become infinitely more influential since Donald Trump won the White House. 

A lot of investors are saying that’s a good thing for Tesla stock. And it could be. But we think investors focused on TSLA are considering the wrong Musk company for 2025. 

Of all of his ventures, Tesla is not the one positioned for the most success this year. 

That would be xAI, his AI startup. 

xAI: A Brief Overview

Founded about two years ago, xAI was created to develop foundational AI models to rival that of OpenAI’s ChatGPT and Google’s Gemini. In that time, xAI has launched several models, the latest of which – Grok-3 – just debuted in late February. And from the looks of it, the AI is quite capable.

It was developed using over 10 times the computing resources of its predecessor, Grok-2, leveraging a massive data center equipped with approximately 200,000 GPUs. The model introduces sophisticated reasoning features, which allow it to deconstruct problems into manageable components and perform self-fact-checking to ensure accuracy before providing solutions. And it also includes a new Deep Search feature – an integrated AI-powered search engine designed to reduce the time users spend hunting for information by providing detailed explanations for its responses. 

According to xAI, Grok-3 outperforms other incumbent AI models like ChatGPT, Gemini, and DeepSeek in areas such as mathematics, science, and coding. 

It seems to be a new landmark model.

And thanks to this rapid success, xAI is currently in talks to raise up to $10 billion from multiple investors at a $75 billion valuation… 

Meaning that, less than two years after it was launched, xAI is already worth more than 70% of the companies in the S&P 500. 

But this may still be just the beginning for the startup. 

Editor’s Note: On Saturday, we sent you the first part of a brand-new report from InvestorPlace CEO Brian Hunt, titled What to Do When the Stock Market Drops. Today, we’re going to share the conclusion. We hope you enjoy it – stay safe out there, and don’t lose heart. 

Hello, Reader.

If you haven’t had the chance yet to read up on the first part of this article, please go here now. There is critical information about bear markets that you can’t miss.

Now, you know that for every ONE problem in America, there are THOUSANDS of brilliant people working on innovative solutions. They are developing amazing products and services that will make our lives better.

These are the types of people who invented the light bulb… the television… the pacemaker… the airplane… and the iPhone.

They are people who have the brains and worth ethic to create incredible businesses like Starbucks, Facebook, Amazon, Whole Foods, Apple, Nike, and Google.

These companies have provided good jobs to millions of people… they provided goods and services to thankful customers… and they produced hundreds of billions of dollars in wealth for their shareholders. All by creating and innovating.

Even better, these kinds of folks work in America. Despite what some Debbie Downers like to say, the legendary investor Warren Buffett is right: America is still the greatest place in the world to do business.

• We have deep and liquid capital markets.
• We have rule of law.
• We have excellent accounting standards, which creates transparency.
• We encourage and foster innovation.
• We respect property rights.
• We have an excellent transportation network (if you’ve fallen for the myth that U.S. infrastructure is terrible, I urge you to visit a third world country for comparison).
• We have a huge population of well-to-do consumers ready to buy great products and services.

The advances made by American entrepreneurs allow today’s average American to live better than a king did 100 years ago.

Even people in America’s “low income” bracket have better medical care, better food, better transportation, and better access to information than anyone did in 1919, no matter what their level of wealth.

In other words, free markets, innovation, and productive enterprise has allowed mankind to achieve incredible progress despite wars, recessions, and bear markets.

It’s been that way for centuries… and it will continue to be that way in the future, despite any bear market fluctuations.

Below is a chart of the Dow Jones Industrial Index from post-World War II through 2021.

Incredible, right?

The stock market declines of 1987, 2000, and 2008 – while painful at the time – are just speed bumps on the long-term chart. And the takeaway is clear: Over time, American prosperity rises and the stock market goes up.

With this picture in mind, my advice is to “make the trend your friend” and ignore the naysayers. Don’t panic over a market correction, and don’t let the fear-stoking headline of the hour scare you out of your holdings of high-quality innovative companies that are poised to change the world.

During stock market corrections, I ask you to focus on what really matters: progress, transformational industry trends, creating value for others, and innovation.

Remember that despite all the negative occurrences of the past 100 years, shareholders of innovative companies that serve their customers have made fortunes.

It’s been the surest way to get rich in America for more than 100 years. It will be that way for at least 100 more. That’s why staying bullish on human progress and innovation is at the foundation of what we do at InvestorPlace.

It’s also why, when our subscribers write in to ask if we have “bear market survival” plans, we send them this essay.

Our “bear market survival” plan consists of reviewing the facts above, thinking long-term, and looking to buy high-quality stocks at discount prices.

Our “bear market survival” plan does not consist of selling stocks in a panic.

I believe that when an investor can “deprogram” themselves from obsessing over “the market” and interest rates – and instead focus on the things above – the things that history has shown really matter – that investor ascends to a higher level of understanding when it comes to money and investing.

It’s one of the most important milestones on the journey to mastering money.

The Next Time You’re Tempted to Panic About a Bear Market, Look at These Eight Charts

Since 1928, there have been 26 bear markets in the benchmark S&P 500 stock index. After each and every one of them, stocks went on to reach all-time highs. The track record here is perfect.

Recent history has eight outstanding examples of why a smart “bear market strategy” consists of keeping the facts in mind, thinking long term, and not getting scared out of stocks.

We like to think these eight charts are an antidote to a harmful financial disease we call “Short-Term-itis.”

For example, during the famed 1987 “Black Monday” crash, the stock market dropped 33.5% in a single day. It caused a short-term global financial panic.

However, less than two years later, the stock market reached an all-time high.

Then you have the big stock market decline of 1990, which was created by worries over a U.S. recession and the Gulf War. Stocks fell 19.9% during this decline. However, stock recovered and hit a new all-time high less than a year later.

Then you have the big 1998 market decline. Stocks fell 19.3% over the span of a few months. Stocks quickly recovered and reached a new all-time high by early 1999.

Then you have the 2000-2002 bear market. This crash came after the dot.com reached its frenzied peak in March 2000. Although this was one of the worst market downturns in U.S. history, stocks went on to recover and reach new all-time highs in 2007.

Next you have the stock bear market that accompanied the Great Financial Crisis of 2008. Stocks fell an incredible 56% during the decline. However, stocks went on to recover and entered a historic bull market that lasted a decade. Fortunes were made during the recovery and the market reached a new all-time high in 2013.

In the midst of the decade-long recovery that followed the 2008 crash, the market saw a decline of about 19% in late 2011. Stocks recovered and reached a new all-time high by early 2012.

In 2018, the market suffered a gut-wrenching decline of 19%. But by the summer of the following year, stocks had recovered and reached another new all-time high.

Then there is the COVID-19 related stock market drop and recovery of 2020. When the world realized COVID-19 was a serious worldwide problem, the market fell 53% in less than two months. However, government stimulus helped the market recover and stocks reached a new all-time high by the end of the year.

Summing Up Famous Bear Markets

You’ve just gone on a tour of the biggest financial disasters of the past 60 years.

You’ve reviewed the most famous, most horrible bear markets and stock crashes in history… like the Black Monday crash of 1987… the dot-com crash of 2000… and the Great Financial Crisis of 2008.

You’ve also seen the track record here is perfect. Each period of rough times was followed by all-time highs.

These recent recoveries highlight a very long trend…

Every major stock market correction, every crash, every bear market in American history has been followed by new all-time highs.

That’s why we state once again… FOR EMPHASIS…

During stock market corrections, focus on what really matters: progress, transformational industry trends, creating value for others, and innovation.

Remember that despite all the negative developments of the past 100 years, shareholders of innovative companies that serve their customers have made fortunes.

Remember that it pays to bet on America.

Remember that a wise “bear market survival” plan consists of reviewing the facts above, thinking long-term, and staying long stocks.

Regards,

Brian Hunt

Editor’s Note: The market may be turbulent, but innovation never stops — and that’s exactly why InvestorPlace Senior Analyst Louis Navellier remains confident. Just days ago, Amazon unveiled Ocelot, its first quantum computing chip, joining Microsoft and Google in a race to dominate this emerging tech frontier… and the next big investing opportunity.

But let’s be honest — quantum computing is complex, and understanding its real impact on the market can be challenging. That’s why Louis Navellier is holding an urgent briefing on Thursday, March 13, at 1 p.m. ET… just one week before Nvidia’s big “Quantum Day” announcements. Click here now to register your spot for this free event.

Further, Louis and his team have put together a special series on quantum investing for his own e-letter… and he’s agreed to let us run one of those pieces here today.

Additionally, the markets are experiencing a sharp sell off this morning over fears of a potential recession caused by President Trump’s recent tariffs on Canada, Mexico, and China. We will continue to cover this story in here in Smart Money later in the week. If any immediate action needs to be taken in any of our services, we will let you know.

There’s a crazy thing about innovation.

Tech revolutions often happen at a snail’s pace at first…

And then, one day you wake up and the world looks completely different from what you remember.

Consider electricity.

For thousands of years, people saw this “magical” force streak across the sky as lightning. But no one knew what to do with it.

Progress was slow at first. It took people until the 1600s to start experimenting with static electricity. And it wasn’t until 1871 that the phenomenon became commercially useful with the invention of the first electric motor.

It would take another 76 years for transistors to unlock electricity’s full potential.

But since then, the humble transistor has changed the world. The computers enabled by this technology have helped us fly people to the moon… communicated with satellites millions of miles away… even mapped the number “pi” to 105 trillion digits.

And it’s all thanks to understanding how to tame this “magical” power of electricity to power the millions of logic gates that build the modern microprocessor.

Quantum computing is on the same path.

In 1955, physicist Louis Essen switched on the world’s first working quantum machine, the cesium atomic clock.

By blasting finely tuned microwaves at a stream of cesium atoms, Essen and his team forced these atoms into a “superposition” state, where they were in more than one energy state at once… a “quantum state” where they are both grounded and excited. This was perhaps the “electric motor” moment of quantum mechanics – another “magical” force first described by German physicist Max Planck in 1900.

Quantum’s “transistor moment” is now at our doorstep.

Indeed, I’m sure you’ve noticed that three top Big Tech companies have made a big deal about their new “quantum chips” in the past couple of months:

• Alphabet Inc. (GOOG)
• Amazon.com Inc. (AMZN)
• Microsoft Corp. (MSFT)

But which of these companies will actually create the first working “quantum transistor”? And where should investors be putting their money?

In this article, we’ll take a closer look at all three of these new quantum chips. We’ll do a little comparing and contrasting in order to figure all that out.

Some of this is going to get pretty technical… but we need to know this stuff to help guide our quantum investing decisions today.

Plus, once you finish reading this, you’re going to have a pretty good idea of why I’m making a certain quantum recommendation… one that could even beat these three heavyweights at their own game.

But first, here’s what I can tell you about these three quantum chips…

The Workhorse of Quantum: Alphabet

In 1999, a team of Japanese researchers developed the “charge qubit,” a relatively simple circuit that paired a capacitor and inductor to create a quantum-like oscillation. This allowed scientists to create quantum behavior on a circuit board.

A more advanced version came several years later, in 2007, after Yale researchers developed the “transmon qubit.” This new circuit used a complex series of capacitors to protect qubits from outside charge noise. This allowed qubits to be stored for longer periods and reduced error rates to roughly 1 in 500. Below is a simplified circuit diagram of this innovation.

Source

Transmon qubits have since become the “workhorse” of quantum chips. They are considered the most reliable way of creating quantum states in a controlled environment and are preferred to older methods that use physical atoms like an atomic clock does. The challenge is now to bring their 1-in-500 error rates low enough for transmons to do calculations.

The leader of this race is Alphabet.

In 2019, the search giant made a splash after launching its Sycamore quantum chip – the first to pile 54 of these transmon qubits onto a single board. And on December 9, the firm followed up with Willow, a chip with 105 qubits that can maintain coherence for as long as 68 microseconds – a 5X improvement over previous generations.

Alphabet’s Willow chip isn’t perfect yet either. The 105-qubit chip can only handle around three errors at a time, which is still too low for practical applications. In addition, experts estimate that millions of qubits will be needed to tackle complex, real-world problems like encryption breaking; packing that many qubits together is a logistical challenge, since Willow’s superconducting qubits need near-zero temperatures to operate.

Still, Alphabet’s 105 transmon qubit chip represents one of the greatest advances yet in quantum. They’re beginning to tackle the scaling issue of error rates, and it’s perhaps only a matter of time for larger chips to emerge.

The Experimental Play: Amazon

Amazon made its own splash with the Ocelot quantum chip on February 27. This experimental model uses five “cat qubits,” a newer qubit technology that stores quantum information inside a microwave cavity, rather than on superconducting circuit as a transmon qubit does.

Its feline name comes from the famous Schrödinger cat, a thought experiment suggesting a cat in a box can be both dead and alive until someone looks inside. Cat qubits store information in a similarly confusing quantum state.

I must emphasize that cat qubits are still experimental… and they’re not guaranteed to work at larger scales.

But their potential is enormous.

That’s because cat qubits have far lower error rates than traditional qubits. Bit-flip errors (where a qubit accidentally flips from “0” to “1”) can be as low as 1 in 100,000. Think of bit-flip errors as flipping a coin from heads to tails.

These cat qubit systems can also maintain “coherence” for as long as 1 millisecond, since microwave cavities are naturally better at protecting data from the outside environment.

However, cat qubits are not good at preventing phase-flip errors, where the relative phase between qubits is confused. In my previous coin example, this is like keeping the coin on heads, but swapping “heads = good” with “heads = bad.”

To overcome this problem, Amazon’s Ocelot chip uses four transmon qubits (the same established technology Alphabet uses) to help monitor cat qubits. This creates a web of error-correcting qubits that help bring accuracy up to a more acceptable level.

Source

Another issue is that microwave cavities are even harder to pack into the ultra-cold cryogenic environment required by transmon qubits. Microwaves can create thermal noise that can destroy cat states, and tightly packed cavities risk creating cross-talk. Transmon qubits have had over a decade of development and refinement, while cat qubits are still barely out of the gate.

Still, Amazon’s higher-risk, higher-reward wager may pay off. Its prototype has managed to reduce error rates by as much as 90%, and time will tell if this hybrid cat/transmon approach works.

The Dark Horse: Microsoft

Finally, Microsoft has taken the greatest “high-risk, high-reward” approach with its Majorana 1 chip, which was released February 19.

Microsoft’s Majorana 1 uses a “topological qubit,” a special surface that can hold quantum data in a spread-out way. The theory is that a surface would make it easier to scale from several dozens of qubits to several millions of them because you only need to add more surface area to add more qubits. They would also be more error-resistant because quantum information is spread out.

In Microsoft’s case, Majorana 1’s “special surface” consists of semiconductor wires made from indium antimonide (InSb) and indium arsenide (InAs), two materials with favorable properties for storing an electron’s spin. These are then wrapped in a thin aluminum shell, creating a superconductor required for quantum states to form.

It’s crucial to note that Microsoft faces even greater hurdles than Alphabet or Amazon because topological qubits have not yet been proven to work. The Majorana 1 chip, as submitted to the journal Nature, wasn’t a working model of quantum computing. Instead, it only addressed a tiny sliver of the problem ahead.

You see, one of the challenges of topological qubits is how to “read” the information stored across these special surfaces. Information is no longer localized in a single spot, and so the entire system must be analyzed. In addition, the action of reading data from these surfaces can destroy the state. It’s much like having a secret message written in smoke. Open the door too quickly to read it, and even the slightest breeze will change what you see.

The Nature paper on the Majorana 1 chip now describes a new measurement technique to read data on topological surfaces in a single shot. Rather than doing repeated measurements to get an answer (which can introduce error and noise), the system can now read data in one go.

This is an incredible step forward… but also illustrates how far Microsoft has to go in its quantum ambitions. Time will tell whether Microsoft’s approach is the right one.

What Does This Mean for Your Wallet?

Now here’s the thing: The three tech giants aren’t the only companies working on next-generation qubits.

In fact, they might not even become the ultimate winners of the race to a viable quantum computer.

That’s because chipmakers like NVIDIA Corporation (NVDA) know that quantum computing is an existential threat to their dominance. Traditional electricity-based chips have trouble with complex tasks like 3D modeling and encryption. Quantum chips might solve these problems in the blink of an eye.

That’s why firms like NVIDIA are quietly funneling billions of dollars into quantum computing startups. They realize they can’t afford to miss out on the world’s next greatest technology… and neither can you.

That’s why I want you to mark your calendar for NVIDIA’s “Q Day,” Thursday, March 20, at 1 p.m. Eastern.

At that event, NVIDIA is poised to ignite the next phase of the quantum investing cycle. I expect the AI chipmaker to announce a new breakthrough technology that could light a fire under the shares of one of its “Q” partners… a stock 1,000 times smaller than NVIDIA.

To tell you all about it, I’m hosting an urgent summit on Thursday, March 13, at 1 p.m. ET… exactly one week before NVIDIA’s announcement… because I want to get you ahead of the crowd.

Click here now to register your spot.

During this free event, I’ll tell you the story of this tiny small-cap company positioned to be crucial to NVIDIA’s anticipated “Q Day” reveal, thanks to technology protected by 102 patents.

I also want you to know that this isn’t the first time I’ve made this sort of prediction. In fact, I made similar call on NVIDIA itself. So during this free event, I’ll show you how one of my readers held on and made 50X their money from my NVIDIA call all the way back in 2016.

This could be your first shot on the quantum revolution.

Click here to sign up and get all the details.

Sincerely,

Louis Navellier

Louis hereby discloses that as of the date of this email, Louis, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

NVIDIA Corporation (NVDA)

Assessing the “fairness” of tariffs … Bitcoin keeps falling; the level to watch … why the Strategic Bitcoin Reserve didn’t help … a spat among the Mag 7s

As I write Monday mid-afternoon, the markets are a sea of red. The Nasdaq leads the way, down more than 4%.

Behind the crash is the fear of a recession triggered by President Trump’s tariff policy.

Here’s The Wall Street Journal:

President Trump over the weekend refused to rule out the U.S. entering a recession this year, telling Fox News there will be a “period of transition, because what we’re doing is very big.”

Now, though Commerce Secretary Howard Lutnick said, “There’s going to be no recession in America,” investors don’t feel reassured.

Tariffs are at the heart of Trump’s economic plans…and the market’s bewilderment

For an illustration, let’s go to Trump last Friday:

Canada has been ripping us off for years on tariffs for lumber and for dairy products. 250% — nobody ever talks about that — 250% tariff — which is taking advantage of our farmers.

So that’s not going to happen anymore.

Trump went on to say that he may soon implement reciprocal tariffs on Canadian lumber and dairy products.

Back to Trump:

They’ll be met with the exact same tariff unless they drop it, and that’s what reciprocal means.

And we may do it as early as [last Friday], or we’ll wait till Monday or Tuesday, but that’s what we’re going to do. We’re going to charge the same thing. It’s not fair.

This brings up something we should wrestle with…

What “fair” means

If tariffs are placed on Canadian lumber and dairy, it will make those imports more expensive.

U.S. producers can take advantage by selling their goods at higher prices (though still lower than Canadian prices) without as much competition from cheaper Canadian products.

This is great for U.S. dairy and lumber manufacturers – not so great for the U.S. consumers who are now paying higher prices.

Is that fair?

Remember, the U.S. consumer is responsible for about 70% of our GDP. Meanwhile, my back-of-the-napkin calculation of the size of the U.S. dairy and lumber industries clocks in at less than 4% of our GDP.

Perhaps the better question isn’t “what is fair?” but rather “to whom do we want to be fair?”

The economic risk of “cutting off our nose to spite our face”

A leading political/economic theory holds that beneath Trump’s bluster, he’s using tariffs purely as a negotiating tool to force other countries to bring down their levies on U.S. exports.

If this is the case, great. Let’s use them selectively, briefly and then be done with it.

But as we noted in Friday’s Digest, the longer that Trump uses, or even threatens to use tariffs, the greater the risk of stagflation.

Trump’s on-again-off-again tariffs makes it difficult for corporate planners, so they’re pushing off capital investments and hiring decisions. This slows the economy and the velocity of money, threatening low/no-growth (i.e., the “stagnant” part of stagflation).

Trump appears unmoved by C-suite managers asking for clarity. Here’s CNBC from this morning:

President Donald Trump has dismissed the growing chorus of CEOs, investors and policymakers who are pleading with the White House for greater clarity about his sweeping tariff agenda.

“They always say that. ‘We want clarity,’” Trump said in a Fox News interview that aired Sunday.

“They have plenty of clarity.” 

As to the “inflation” part of stagflation, consumers appear to be increasingly worried about the impact of tariffs on prices.

Here’s the Federal Reserve Bank of Richmond last week:

In February 2025, households’ inflation expectations over the next 12 months rose for the third straight month. They now sit at 4.3 percent, which is the highest mark since November 2023…

Worryingly, longer-run inflation expectations rose to 3.5 percent in February, the highest mark in nearly 30 years (April 1995).

Inflation fears risk fueling the attitude of “buy it now before the price rises!” which, unfortunately, serves as a self-perpetuating feedback loop, creating the exact higher prices that are feared.

Meanwhile, there’s a lurking question…

What if Trump’s tariffs don’t prompt the desired foreign tariff reductions, but instead, stoke indignant tariff increases? (Which, so far, has been the case.)

Then we enter a game of economic “chicken” between Trump and foreign leaders with the respective economies as potential collateral damage.

Trump claims tariffs are already having the desired result, spurring new manufacturing jobs. From Trump:

We created almost 9,000 new jobs in the auto production field. And the reason for that is largely they think things are happening so they’re already geared up.

While this is great for the individuals who land those 9,000 new jobs, if the cost of that job creation is higher auto prices for the tens of millions of American consumers – and a recession – is that fair?

Bottom line: We’d love to see a more balanced trade deficit, but not if the cost is a recession and a bear market.

On that last note, as noted at the top of today’s Digest, the market is deep in the red as I write Monday near lunch. For investors hoping that Trump might see this and course correct, this appears unlikely.

Among his comments in recent days, Trump had the following to say about stocks:

Look, what I have to do is build a strong country. You can’t really watch the stock market.

If you look at China, they have a 100-year perspective. We go by quarters. And you can’t go by that.

Despite this, the chances of a bullish mean reversion rally are growing. We’re going to dive into that in tomorrow’s Digest.

But in the meantime, stick with your investment plan. That means abiding by your pre-appointed stop-losses…yet also looking for great buying opportunities that are on sale as other investors panic.

Crypto investors are feeling deflated

Last Friday, President Trump signed an executive order to create a Strategic Bitcoin Reserve. Funding this reserve will be Bitcoin seized in criminal and civil forfeiture cases.

The executive order also establishes a U.S. Digital Asset Stockpile which will hold other confiscated cryptocurrencies. In a post on Truth Social, President Trump wrote that this stockpile will include ether, XRP, Solana’s SOL token, and Cardano’s ADA token.

So, why isn’t the market more bullish?

Because many in the crypto community wanted a more ringing endorsement from the government.

Here’s TD Cowen’s Jaret Seiberg:

We view this as a compromise.

The government is not spending taxpayer dollars to acquire new digital assets. It is simply not selling the ones that it seizes …

We are dubious that government will be acquiring additional bitcoin for the reserve despite the President’s instructions as we believe it will be politically tough to show how purchases are budget neutral and do not impose incremental costs of taxpayers.

To clarify, Trump’s order keeps open the possibility of the government buying Bitcoin. However, according to a factsheet from the White House, such purchases must be “budget-neutral” and “impose no incremental costs on American taxpayers.”

With the market now recognizing that the U.S. government isn’t about to go on a Bitcoin shopping spree, this leaves Bitcoin lacking a new bullish catalyst.

This gives bears room to drive Bitcoin lower, which they’re doing. As I write, the crypto is struggling to hold $80,000.

From a technical perspective, we’re nearing a “must hold” level

Last week, when Bitcoin traded below $85,000, our crypto expert Luke Lango wrote the following to his Crypto Trader subscribers:

Right now, Bitcoin is caught between two major technical levels:

• It’s holding its 50-week moving average—historically, the final line of defense in past boom cycles.
• It has lost its 25-week moving average—a warning sign seen before previous tops.

If Bitcoin reclaims $85,000, the bull market could surge back with a vengeance.

If Bitcoin breaks below $75,000, it could signal the start of a new crypto winter.

Since then, Bitcoin briefly retook $85,000, but as just noted, it’s now threatening to lose $80,000.

For now, Luke recommends just watching. This is neither the time to bail or buy. As he writes to his subscribers, “we’ll let the market tell us what’s next.”

To join Luke in Crypto Trader for timely updates as well as the specific altcoins he’ll recommend if/when bullish spirits return, click here.

Finally, there’s some trash talk breaking out between the AI big dogs

In February, Microsoft announced it created a new state of matter (as Big Tech races toward creating quantum computing).

Amazon isn’t having it.

From Quartz:

Amazon’s head of quantum technologies, Simone Severini, told chief executive Andy Jassy that the company’s scientific paper “doesn’t actually demonstrate” its claims — only that the new chip “could potentially enable future experiments,” Business Insider reported, citing a copy of Severini’s email obtained by the publication.

Severini also reportedly told Jassy that Microsoft has had “several retracted papers due to scientific misconduct” in quantum computing, and that the company has previously had to withdraw some of its research.

To be fair, Amazon isn’t an impartial bystander. It’s also pursuing quantum computing leadership.

Here’s legendary investor Louis Navellier with more details:

Amazon made its own splash with the Ocelot quantum chip on February 27.

This experimental model uses five “cat qubits,” a newer qubit technology that stores quantum information inside a microwave cavity, rather than on superconducting circuit as a transmon qubit does.

Its feline name comes from the famous Schrödinger cat, a thought experiment suggesting a cat in a box can be both dead and alive until someone looks inside. Cat qubits store information in a similarly confusing quantum state.

I must emphasize that cat qubits are still experimental… and they’re not guaranteed to work at larger scales.

But their potential is enormous.

If this all reads like Greek, don’t worry. We’re not about to dive into the details of quantum physics. But there is a budding investment opportunity emerging in quantum computing that’s important to highlight.

As we’ve been covering in the Digest over the last few days, this Thursday at 1 PM Eastern, Louis is holding an exclusive briefing: The Next 50X NVIDIA Call.

He’s going to dive into why quantum computing is an AI gamechanger on a scale we haven’t seen yet – both from a technological and wealth-building perspective.

He’ll also tell you more about his top quantum pick; it’s a small-cap stock protected by 102 patents with close ties to NVIDIA.

Now, we should quickly answer an obvious question – with NVIDIA being mentioned, why not just invest in it to ride quantum computing?

Well, Louis is doing that. But not just that.

Here he is explaining:

Chipmakers like Nvidia Corp. (NVDA) know that quantum computing is an existential threat to [chipmakers’] dominance. Traditional electricity-based chips have trouble with complex tasks like 3D modeling and encryption. Quantum chips might solve these problems in the blink of an eye.

That’s why firms like Nvidia are quietly funneling billions of dollars into quantum computing startups. They realize they can’t afford to miss out on the world’s next greatest technology.

On Thursday, Louis will dive into all these details, as well as prep you for NVIDIA’s first ever “Quantum Day,” or “Q Day,” as Louis calls it.

Q-Day comes one week from Thursday on March 20. Here’s Louis with the significance:

At that event, Nvidia is poised to ignite the next phase of the quantum investing cycle.

I expect them to announce a new breakthrough technology that could light a fire under the shares of one of its “Q” partners… a stock 1,000 times smaller than Nvidia.

To tell you all about it, I’m hosting an urgent video briefing on Thursday, March 13, at 1 p.m. ET… exactly one week before Nvidia’s announcement… because I want to get you ahead of the crowd.

To join Louis, click here to register.

We’ll keep you updated on all these stories here in the Digest.

Have a good evening,

Jeff Remsburg

Editor’s Note: If you’re a regular Market 360 reader, you probably know I usually share my latest MarketBuzz YouTube video from the previous weekend on Mondays. But in light of today’s turbulent market activity, we’re doing something different today. Instead, I’m going to share the transcript of a Special Market Podcast that I sent to my premium readers earlier this afternoon.

Now, usually, my podcasts are reserved for my paid-up subscribers only. But given today’s selloff, I’m making an exception…

Editor’s note: “Beyond the Ups and Downs: Building Wealth in a Volatile Stock Market” was previously published in February 2025 with the title, “How to Find Success in Today’s Volatile Stock Market.” It has since been updated to include the most relevant information available.

Another day, another crazy roller-coaster ride for the stock market…

This has been the trend since Halloween. 

That is, in November, the S&P 500 rose 5.73%, achieving one of its best months in a year on optimism about potential deregulation and tax cuts under the Trump administration.

Then, as investors began to fear that the U.S. Federal Reserve wouldn’t cut interest rates anymore, stocks crashed 2.5% in December. It turned out to be one of their worst months in a year. 

As we moved into 2025, stocks rebounded throughout January and early February thanks to renewed economic optimism… 

But they’ve since crashed over the past few weeks as uncertainty about tariffs, federal spending cuts, and an economic slowdown weighs heavy on Wall Street. Indeed, since Feb. 10, the S&P has slid more than 6%. 

Stocks have swung violently higher and lower many times over the past several months, all for the S&P 500 and the Nasdaq to be basically flat.

Is this intense volatility Wall Street’s ‘new normal’?

It may be… 

A Bumpy Ride Higher?

Don’t get me wrong; I still think stocks are going higher in 2025. 

Despite renewed concerns about inflation and a consumer spending slowdown, the economy still appears to be on stable footing. It should benefit from deregulation and maybe even tax cuts over the next few months. Plus, the AI Boom remains alive and well, which should continue to create growth through the economy. 

Additionally, the fourth-quarter earnings season has come to an end; and broadly speaking, it was a strong one. 

As FactSet reported, “nine of the eleven sectors are reporting year-over-year earnings growth for Q4. Six of these nine sectors are reporting double-digit growth: Financials, Communication Services, Consumer Discretionary, Information Technology, Health Care, and Utilities.”

Meanwhile, the blended earnings growth rate is nearly 17%, which marks the index’s highest profit growth rate since 2021.

And trends are expected to stay strong for the foreseeable future. That is, next quarter, earnings are projected to rise about 8%, then another 9% in Q2. They are expected to rise almost 15% in the third quarter and about 13% in the fourth.

In other words, corporate earnings should keep rising for the rest of the year. Stock prices should follow suit. 

However… I don’t think it’ll be a smooth ride higher…  

Largely because of U.S. President Donald Trump.