The Weekend Edition is pulled from the daily Stansberry Digest. We're Witnessing the 'Running of the Stock Market Bulls' By Corey McLaughlin The rough ride continues... Another day, another sea of red and multipercent declines across each of the major U.S. stock market indexes. The tech-heavy Nasdaq Composite Index led the way down this past Monday, off more than 4%... the benchmark S&P 500 Index finished down more than 3%... and the sturdy Dow Jones Industrial Average was off 2%. Bonds continued their tumble, too. The yield on the 10-year Treasury note hit 3.17% intraday this past Monday, its highest level since November 2018. Remember, yields trade inversely to prices. In other words, if you've been relying on the conventional 60-40 stock-bond allocation in your portfolio, you're getting hammered. In fact, the benchmark 60-40 measure we use is down roughly 16% in 2022... And more people are starting to notice... Someone asked me over the weekend, "Stocks can't keep going down, right?" Well... Stocks, generally speaking, can keep going down. I can't say for sure if they will, or for how long they will if they do. But it's wise to prepare for the possibilities rather than using a "hope for the best" investment strategy. This is why we've been urging you to consider the alternatives to conventional market wisdom... For decades, many people have just assumed that bonds are supposed to always go up when stocks go down. I can't blame them... This strategy of balancing riskier stocks with safer bonds has worked for a lot of people. But when "safe" bonds – after trillions of dollars of money-printing amid a pandemic and a burgeoning global war – yield a rate lower than inflation, investors don't see the logic in owning them anymore... so prices fall. And when economic growth slows for any number of reasons – like it did in the first quarter of 2022 by 1.4% as measured by gross domestic product ("GDP") – and when folks expect slower growth in the future, forward-looking stock prices tend to fall, too. Today, inflation is raging. Orange juice – yes, orange juice – was the best-performing commodity last week, up 10%. The national average for a gallon of gas hit $4.40 as of Wednesday, up 29 cents from a month ago and $1.42 from this time last year, according to AAA. But there's a "bright" side to this struggling financial environment... We're starting to see more mainstream media outlets report on the now four-month-long sell-off in the markets in 2022. This is a social behavior that tells us the path might be getting closer to the finish than the start... On May 5 – after stocks' worst day of 2022 – CNBC ran blood-red, anxiety-inducing "Markets in Turmoil" graphics, which might be as good of a contrarian indicator as there is. And late last week, "401k" was trending on Twitter (TWTR). Commenters were wondering why their account balances were down sharply, as if they are always supposed to go up... The reality is, stocks don't always go up. Has anyone checked on Dave Portnoy? More people might be slipping into panic mode... These are the kind of anecdotes that begin to show us we might be inching closer to a "bottom" rather than a top. Importantly, however, it doesn't appear we're quite there yet. If you're worried about your portfolio today, you're not alone. The Nasdaq is in mainstream bear-market territory already – down 27% from previous highs in November. And the S&P 500 is following the same trajectory, down 16% from its highs at the start of 2022. That said, I hope you are not among those panicking today. If you're finding it difficult to look at your portfolio today because of what's going on in the markets... take that as a sign that you're taking on more risk than you're comfortable with. If it coincides with your financial goals, there's no shame in raising and preserving cash today so you can use it when great buying opportunities present themselves down the road. In fact, our team is seeing some crop up today... Cash could be your best friend in a bear market. We don't think we can share this excerpt from our Stansberry's Financial Survival Program often enough. As Dr. David "Doc" Eifrig said... During a bear market, nothing is more important than cash. And it's not hard to understand the basics of why... In fact, you could define a bear market as the rising value of the U.S. dollar versus financial assets. Likewise, when commodities... or real estate... or foreign currencies... go through a bear market, what you're really seeing is the rising value of the U.S. dollar as compared with those other assets. The most important factor in determining how successful you can be as an investor during a bear market is simply how much cash you have (and can raise) as asset prices fall. As for how much cash you should have... that depends on your individual situation. If you're in or nearing retirement, you might want more of your portfolio in cash. You might want less cash if you still have 10-plus years left to play the markets. We suggest a two-pronged plan to survive the coming bear market... When seemingly every financial asset priced in dollars is falling in value and everything at the store is going up in price, you want to own assets today that will hold their value as much as possible. In a down market, that's cash or hard assets such as gold. In today's world of high inflation, geopolitical conflicts, and major supply-chain issues, certain commodities fit the bill, too. As individual investors, we can attack this bear market head on. We can buy for the long term when everyone else is scared... or when folks are overleveraged and need liquidity, like institutional investors can be. We also have the freedom to make smart options bets that take advantage of other traders' fears. These are the kinds of opportunities that clear thinking, financial goals, and a fundamentally sound, well-balanced portfolio can present to you. And it's essentially the same reason why some of the world's best investors end up making their greatest returns in times of turmoil. You can too... This past Monday, our colleague and Ten Stock Trader editor Greg Diamond closed out a trade for a 100% gain... With the recommendation initiated on April 22, Greg's subscribers notched a "double" in just 11 trading days. Considering how volatile the markets have been, that's a huge win. (The next day, subscribers locked in a 60% gain in less than a week on a different trade.) And Greg shared recently that he's eyeing more bets on lower prices... because he still doesn't see the bottom of this sell-off yet. On the contrary, Greg believes "the bull market is dying slowly"... Greg wrote to subscribers in his May 9 Weekly Market Outlook and reiterated a point he made in Module 4 of our Financial Survival Program: Many folks might be getting caught unaware. As he wrote... It might not feel like a panic right now. It's not like 2020, when stocks crashed more than 30% in one month as COVID-19 swept the globe... No major bank has gone belly-up like Lehman Brothers back in 2008... And there aren't any bread lines like during the Great Depression back in the 1930s... But as I described in the [Financial Survival Program], every bear market has a different "why," but they all follow the same pattern in regard to price. Right now is no different. It's just more painful since it isn't happening that fast. Think about it... The Nasdaq is down more than 20% this year, but only last week did CNBC deploy its "Markets in Turmoil" warning graphic. Up until the last two weeks, the selling has been rather orderly... The volatility started slow and has grown in scale as the year has gone on... like the activity on a Richter scale, which measures the magnitudes of earthquakes. And similar to the bulls running through crowds during the famous "running of the bulls" in Pamplona, Spain – an event Greg attended in 2012 – stock market bulls are suffering a slow death before the final blow... Sword swipes and stab wounds in the form of inflation, the Federal Reserve, supply-chain constraints, and slowing economic growth will be the downfall of many investors. But you don't have to fall with them. Knowing the safest places to put your money today... and how to spot the right investment opportunities... will help you stand your ground when the bear rears its head. Good investing, Corey McLaughlin Editor's note: Greg says a massive "aftershock" could hit the markets on May 25. But if you use this strategy of his in the coming weeks and months ahead, you could pocket massive gains while others are sent scrambling – without touching a single stock. What's more, Greg is offering his research for a steep discount, as well as a FREE special report to help you prepare for what's ahead. Click here for more details. Tell us what you think of this content
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