FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

posted on 25 April 2016

How To Invest For The Recession That's Already Here

by Keith Fitz-Gerald, Money Morning

Money Morning Article of the Week

In a meeting with The Washington Post's editorial board earlier this month, GOP presidential primary candidate Donald Trump said the economy was so dicey that the United States was headed for "a very massive recession."

As I noted on FOX Business' "Varney & Co.," I think we're already there, even if the Fed doesn't realize it yet.

Here's the thing - the measures the Fed uses to judge economic activity are based on a manufacturing economy that we enjoyed more than 100 years ago. They simply don't reflect the services-based system we live in presently.

The hard truth is millions of American families are living paycheck to paycheck. The economic "recovery" that the Fed and legions of economists are so proud of having engineered doesn't exist - and hasn't for a very long time.

Here's the real state of American prosperity - and what you can do to ensure you're not left behind...

Your Economic Future Doesn't Have to Be This Grim

Look at income, for example. Incomes have grown by less than inflation in 28 states since 2007, according to Yahoo! Finance. Manufacturing activity has fallen off a cliff, dropping in 44 states over the same time frame. Median household income is still lower than it was in 2000, according to Sentier Research and BLS data.

Long story short: Many families are earning less than they did 16 years ago.

Never mind what the "official" definition is. That's a real recession - one that's leaving millions of families in the lurch.

Obviously, I don't want you to be one of them.

In fact, I want you to have the retirement of your dreams no matter what the Fed does next, no matter what happens this election cycle, and no matter how Wall Street tries to hijack your money.

Right now, that means paying attention to the data.

History shows that individual investors don't usually do that very well. In fact, they do it very poorly on average - selling when they should be buying and buying when they should be selling.

Consider what happened from September 2008 to January 2016. Over that period, Domestic Equity, Long-Term Mutual Fund Flows experienced monthly withdrawals totaling more than $875 billion versus $129 billion of additions - and over that time, the S&P 500 rose by a 51.8%.

Ergo... they sold low and bought high.

How Investors Are Walking Away from Big Gains

Right now you're seeing the same thing... again.

According to the TDAmeritrade Investor Movement Index (IMX), a proprietary behavior-based index tracking individual investor sentiment, the markets are drifting sideways to up even as individual investors are backing away.


That tells me the risk of being left far behind is rising... again!

I say that because traders are warming up to the idea that central bankers may try to manipulate their way higher in response to increasingly challenging deflationary inputs around the world.

We all know that's terrible from a macroeconomic standpoint, but that doesn't change the fact that they're going to try anyway.

And that means you've got to be on board even if you don't want to be.

Let me prove it to you.

Take the 10 years from 1994 to 2004. The markets rose and fell, but ultimately you would have earned 6.5% a year over that time frame. However, if you missed out on just the 10 best days of that tumultuous time, your annual return would have been... wait for it... a whopping 0%. As in zero, zilch, nada, bupkis.

Yes, you read that correctly: You would have earned all your money in just 10 days... out of 3,827 total.

So if you're tempted to run for the hills like a lot of people at the moment, ask yourself if you can afford to throw that kind of potential away.

The vast majority of investors can't.

But obviously, investing blindly won't cut it. I believe the best returns in this market are going to come from just six "Unstoppable Trends:" Demographics, Scarcity/Allocation, Medicine, Energy, Technology, and War, Terrorism & Ugliness.

In fact, I'm willing to bet that every dime you'll make over the next ten years will come from one or more of these trends. They've created more billionaires than any trend not on the list above in history.

Right now, this means buying companies like Raytheon Co. (NYSE: RTN), American Water Works Co. Inc. (NYSE: AWK), and NextEra Energy Inc. (NYSE: NEE). Each of these companies has rock-solid potential right now, and of course they're all "powered" by Unstoppable trends like War, Terrorism & Ugliness, Scarcity/Allocation, and Energy.

The gains they provide aren't about to be stopped by any recession, either, even if the Federal Reserve and the government never get around to admitting we're in one.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Investing Post Listing

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.

You can also comment using Facebook directly using he comment block below.

Econintersect Investing


Print this page or create a PDF file of this page
Print Friendly and PDF

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Take a look at what is going on inside of
Main Home
Analysis Blog
A Short Note on a Connection Between Marginalist Economics and Folk Medicine
Run A High Pressure Economy? Janet Yellen Does Not Understand the Problem
News Blog
Early Headlines: Asia Stocks Mixed, Huge Antarctic Marine Park, Can Trump Get To 270?, US Workers Gaining, UK Inflation, France GDP, India Savings Lag And More
Why Amazon Gives So Many Perks To Prime Members
Where Workplace Trust Is Strongest
How A Lack Of Sleep Affects Your Brain - And Personality
How Accurate Are Final US Election Polls
What We Read Today 27 October 2016
A Pony And His Beloved Teddy Bear Reunite After Being Apart For 3 Years
October 2016 Kansas City Fed Manufacturing Remains In Expansion
September 2016 Median Household Income Not Statistically Different Than The Previous Month
September 2016 Pending Home Sales Index Improves
22 October 2016 Initial Unemployment Claims: Rolling Averages Marginally Worsen
Durable Goods New Orders Marginally Declined in September 2016
Infographic Of The Day: 41 Interesting Facts About Tesla Motors
Investing Blog
Technical Thoughts: Looking For The Rebounds
Gold That Pays Dividends
Opinion Blog
Global Debt Investors: The Silence Of The Lambs
A Hard Brexit And Reduced Migration Won't Benefit UK Workers
Precious Metals Blog
Inflation Surging As Platinum Signals Stock Market Decline
Live Markets
27Oct2016 Market Close: Wall Street Closes Fractionally Lower, Interest-Rate Stocks Outweighed Gains In Healthcare, Market Indicators Bearish
Amazon Books & More

.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Middle East / Africa
USA Government

Crowdfunding ....



Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved