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Vindication!

By Dr. Steve Sjuggerud
Thursday, October 3, 2013

For years, I have been alone...
 
I've had this "working script" for the markets...
 
Most people haven't believed it. But if I'm right, you could potentially get very rich.
 
At its most basic, my thesis goes something like this:
 
Stock prices and home prices can soar higher than most anyone can imagine, as the Federal Reserve keeps interest rates artificially low for longer than most anyone can imagine.
 
Again, for the most part, I have been alone... an extreme voice, far from the mainstream on this one.
 
But importantly... I have been right!
 
Now, someone agrees with me about the Federal Reserve...
 
It's not just any someone, it's the most important man in the interest-rate world outside of the Federal Reserve. I'm talking about the Bond King – Bill Gross.
 
Bill may be the most successful bond investor in history. Today, his firm is responsible for roughly $2 trillion of investor money, which is mostly invested in bonds.
 
In his most recent "Investment Outlook," Bill wrote:
 
If you want to trust one thing and one thing only, trust... that Fed Funds [interest rate] will stay lower than expected for a long, long time.

Right now, the market (and the Fed forecasts) expects the Fed Funds [interest rate] to be 1% higher by late 2015, and 1% higher still by December 2016. Bet against that.

According to Bill, you shouldn't expect the Fed to start quickly raising interest rates. He thinks that the Fed's plans could mean "abnormally low interest rates for a long, long time."
 
How long? Bill says the world may need to get used to these low interest rates "for decades to come."
 
This is terrible news for retirees and savers if he's right. (And you don't become the Bond King by being wrong a lot.)
 
If you're retired now, and you've been thinking interest rates HAVE to go up SOME DAY, you need a new plan.
 
You can't live on interest today. And if Bill and I are right, you won't be able to live on interest income... for years to come.
 
With zero-percent interest rates, the Fed is trying to get money out of cash and into assets. It will end up in the stock market and in the real estate market.
 
So if you want to make money in the coming years, you have to beat everyone else to the punch. Get your money out of cash and into stocks and real estate... NOW.
 
Good investing,
 
Steve




Further Reading:

"As I've said many times over the last three years, I expect asset prices could go higher than anyone can imagine in this boom," Steve writes. "The problem is, it's a false boom... And a bust is inevitable." When that happens, Steve says this asset can preserve your wealth.
 
DailyWealth Classic: Last year, everyone believed U.S. interest rates HAD to go up. But Steve predicted the opposite would happen. "History says rates could stay this low for a long time. And possibly fall even lower in the next few years. Let me explain..."

Market Notes


IT'S A BULL MARKET IN EXPENSIVE ART!

Today's chart shows folks aren't just playing the tables and the stock market... they're also buying expensive art.
 
Over the last couple weeks, we've shown you how the government's "E-Z Credit" policy has lots of folks feeling richer. It's led them to hit the tables at casinos and to engage in "online gambling" with the stock market. Casino stocks and brokerage stocks are soaring.
 
Another soaring stock is Sotheby's (BID). Sotheby's is one of the world's largest art dealers. The company sells $40 million paintings to billionaires.
 
As you can see in the chart below, selling expensive art is a good business right now. Sotheby's is selling high volume at high prices. This has propelled shares to a 77% gain from their November lows. Just this week, shares struck a 52-week high. Whether it's slots, stocks, or art, people are speculating... And it's showing up in the share prices of the companies that serve them.
 

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