A Generational Opportunity for Long-Term Investors

Across my publications, I've said it multiple times so far in 2022: This stock market sucks! However, after several years of outsized returns and some seriously unusual stuff in both the economy and world, it shouldn't be surprising that we're going through a "correction" period. So in today's essay, let's spend a little time talking […] Not rendering correctly? View this e-mail as a web page [here](. [Empire Financial Daily] A Generational Opportunity for Long-Term Investors By Enrique Abeyta --------------------------------------------------------------- [Billions Pouring into the Next Big Industry]( Major investors are taking note – and the legend who bought Amazon at $48 and Apple at $0.35 is [pounding the table on one $4 stock](. --------------------------------------------------------------- Across my publications, I've said it multiple times so far in 2022: This stock market sucks! However, after several years of outsized returns and some seriously unusual stuff in both the economy and world, it shouldn't be surprising that we're going through a "correction" period. So in today's essay, let's spend a little time talking about some perspective to have in a bear market. The first question is, how does this current one look compared with previous bear markets? Well, here's a good table showing the broad market decline during previous bears since the 1940s... Since the peak on January 3, the S&P 500 Index is down about 25%. That's not nearly as much as it was down in the three most recent crises, but it's similar to what it was down during previous bear markets. While we clearly don't know if we have hit the bottom, this makes some sense to us, since – for right now – this bear market is different than the last few examples. How so? First, those most recent bear markets were all characterized by a large economic shock that drove the market from its steady downward trend toward a violent capitulation. Younger investors likely think of the tech bubble in 2000, but they forget that the bottom wasn't reached until 2002 and only after the horrific events of 9/11. Likewise, the housing crisis precipitated the global financial crisis of 2008, but the bottom wasn't reached until about six months after Lehman Brothers went bankrupt. For the 2020 bear market, we don't really need to explain what happened, as we're sure every reader here remembers the pandemic. Second, the current bear market is also characterized by a very mixed bag of conflicting economic signals. The most recent bear markets were all coincident with shrinkage in economic growth and recessions. While we may still fall into a recession here in the U.S., for the time being employment remains strong and the overall economy is hanging in there. In this context – mixed signals and a lack of a big economic shock – the current bear market decline makes a lot of sense relative to historical bear markets. --------------------------------------------------------------- Recommended Link: [Legendary financial researcher goes on record]( Legendary financial researcher Herb Greenberg just went on record with something that few people understand is available to them. It's a unique "savings account" that can pay you up to 50% on your money, starting today. It could be the best money move you'll make this year. [Check out everything right here](. --------------------------------------------------------------- Now, here's the thing about stock market downturns and bear markets: They are going to happen... In order to create real wealth in the stock market – either via trading or long-term investing – you need to stay in the game. By definition, therefore, you are going to be involved in a bear market. Looking at the list above, I have been alive for six of these stock market crashes and an active investor in four of them. Throw in a couple of shallower declines like in 1994 and the Long-Term Capital Management crisis in 1997, and I have lived through a half dozen in my 25-year-plus investing career. Every one of these is different in its own way... but there are still some "rules of physics" that will apply to every bear market. One of those is the feelings it drives in investors: panic and despair. This type of stock market environment will make you question your entire investing game plan – especially for long-term investors. Let's get back to what we started with: These types of stock markets suck! However, there are some silver linings in this stormy environment, especially for those long-term investors... First, the excesses of the COVID period are rapidly being burnt off, both in the asset markets as well as the economy. This is a healthy reset for the world financially. Second, stocks are a lot cheaper than they were at the start of 2022. With a long-term view, this is a 25%- to 75%-off sale on many companies that will go on to become great investments. Third – and this is something we seldom talk about – how about bonds? There is finally some yield out there! A 4% yield on a U.S. Treasury bond isn't a lot... But considering rates have hovered around zero for a decade, it's a good start. Remember that the big returns are always driven out of periods of distress – not at the tops of bull markets. If you're a long-term investor and are making regular contributions to your retirement account, you should be feeling excitement, not despair. That may seem contradictory, since high inflation, stocks getting crushed, and rates skyrocketing makes everyone feel terrible. But if you can ignore this noise and focus on making consistent contributions to your long-term investments, you'll likely look back on this as one of the best periods for your investment portfolio. The stock market may go lower before it goes higher – but for long-term investors, this is the kind of stock market where real money is made. Accordingly, that's why my colleague Herb Greenberg just launched his brand-new []Empire Real Wealth publication... In it, Herb has built a portfolio of nine world-class businesses that are screaming "buys" right now. These are stocks to hold for the long term – ones that can help you build a foundation for wealth for your grandkids and their grandkids in the years to come. The worst thing you could do is ignore this opportunity. A few years from now, we'll look back at it as a generational opportunity to buy some of the best businesses in the world. And right now, you can gain access to all of the names in Herb's Empire Real Wealth portfolio for just $49. Plus, it comes with a 60-day, 100% money-back guarantee. If you don't like it for any reason, you can cancel and get all of your money back, no questions asked. You have nothing to lose and everything to gain... so why not take advantage? [Get started here](. Regards, Enrique Abeyta October 11, 2022 --------------------------------------------------------------- If someone forwarded you this e-mail and you would like to be added to the Empire Financial Daily e-mail list to receive e-mails like this every weekday, simply [sign up here](. © 2022 Empire Financial Research. All rights reserved. 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