Prepare Now for the Coming Cash Tsunami

[Inside Wall Street with Nomi Prins]( Welcome to Inside Wall Street with Nomi Prins! It’s the only daily newsletter featuring the insights of renowned author and former Wall Street insider, Nomi Prins. Every day, Nomi shines a light on a massive wealth transfer she calls The Great Distortion. That’s the true cause of the permanent disconnect she sees between the markets and the real economy. And she shares ways you can come out ahead, if you know where the money is flowing. You’ll find all Nomi’s Inside Wall Street issues [here](. If you have questions or comments, send Nomi a note anytime [here]( or at feedback@rogueeconomics.com. Maria’s Note: Maria Bonaventura here, Nomi’s senior managing editor. Please note, the markets and our offices will be closed tomorrow, November 24, in observance of Thanksgiving Day. We’ll resume our normal publishing schedule on Friday. From all of us at Rogue, we wish you a very Happy Thanksgiving. --------------------------------------------------------------- Prepare Now for the Coming Cash Tsunami By Nomi Prins, Editor, Inside Wall Street with Nomi Prins Before I dive into today’s essay, I need to tell you about an urgent announcement that just came across my desk. It’s from a trusted colleague, Marc Chaikin. Marc called the bear market in tech back in '21. He even warned about nearly two dozen stocks that have since plummeted – including what became nine of the worst tech stocks of the year. And today, his counsel feels more severe. He's warning Americans to prepare for what he calls a "historic financial reset" on January 2. I’ll be frank. I don't know if Chaikin is right in what he's predicting... But I do know he's been correct on a lot of things over the past two years. It's definitely worth your while to hear what he has to say, and see what you think. That’s why I dropped everything to film a short video to tell you more about it. It runs just under two minutes. [To watch it, simply click here or the image below](. [Chart]( Now, on to today’s essay… Recommended Link [In 20 years, this little-known trader didn’t have a single losing year…]( [image]( In his debut video, Market Wizard Larry Benedict reveals how to make all the money you need, in any market, using a single stock. [Click here to watch the video]( and get the name and ticker of the one stock that could put you on the road to financial success. [Click here to learn more.]( -- Feeling Stuck? You’re Not Alone When you look at your portfolio, what do you see? Are you sitting on more cash than ever? If you are, don’t worry. You’re not alone. It’s normal for people to move to cash when the market is in disarray. And this year has been brutal… Most stocks or bonds are getting hammered by rising interest rates, raging inflation, and recession fears. Alternative investments are not doing any better, either. [Featured: Do Recession-Proof Stocks Exist???]( The crypto world is taking hard hits from overleveraged positions, some of which I’ve covered in these pages. (Catch up on the latest [here]( It feels like investors have nowhere to run or hide. So, many have put their life savings into cash in their portfolios… even though cash depreciates quickly with high inflation. While this economic setup looks grim, we will eventually see the light at the end of the tunnel. That involves cash flowing back into stocks, bonds, and other investments. And when this massive flow happens, you’ll want to have a “watch list” of investments to act on. I’ll give you a few tips to help you get started in a moment. But first, let’s see where we are now… Recommended Link [Whitehouse doubles-down on 'New Order'. Prepare NOW]( [image]( Things have changed in America. There's a [New Order](... It took hold secretly back in 2020… This is how I knew inflation would grip our country well before mainstream economic "experts" … And why I was able to set my portfolio up to benefit while most people continue to suffer... Yet the 'New Order' is just beginning... And the consequences could be ruinous if you’re unprepared… [>> To find out how to prepare, click here now, and I'll explain everything...]( -- Cash-Heavy Portfolios In normal times, investors tend to keep most of their portfolios in stocks and bonds. It’s the famous [60/40 portfolio]( that financial advisers often tout. These two buckets have a history of decent returns. For instance, here are the average annual returns from 1928 to 2021: - S&P 500 (a benchmark for U.S.-listed stocks including dividends) yielded 11.8% per year. - U.S. T-Bonds (10-year bonds issued by the government) returned 5.1% per year. That’s what most investors expect their portfolios to reach in the long run. Meanwhile, the smallest part of their holdings is usually left for cash. This cash is reserved for emergencies or temporary holdings. It’s only a liquidity buffer in case of unforeseen events. However, markets are far from normal right now. Since the beginning of the year, the S&P 500 has lost 17%. Bonds are down 17.3%. That’s why, today, investors hold 25% of their portfolio in cash – despite high inflation. It’s a big jump from the 10-year average of about 17%. In other words, investors are choosing 7-8% in inflationary pressure against steadily declining stocks and bonds. [Featured: Dr. Nomi Prins: “Musk spent $10 billion on these. This is bigger…”]( A Signal to Unload Cash Holdings Cash holdings spike during tough market times. We can see that in the chart below, which shows the last 10 years… [Chart] We’re now close to the 10-year high in cash holdings. But it’s unlikely to stay this way for too long. Investors will soon begin deploying their cash into high-quality stocks selling at bargain prices. Yet, no one is rushing. They are waiting for lower inflation readings and a more dovish Federal Reserve. This will provide more certainty to investors as a signal to return to the stock market. When will it happen? No one can tell for sure. But as I’ve written before, I believe the Fed is going to start pivoting in three stages. Here’s how I put it in [an earlier issue]( Stage 1 will be a reduction in the size of rate hikes. I think we could see this as early as December. In Stage 2, the Fed will move to neutrality. That means it will pause its rate hikes. I see this happening by next summer. By Stage 3, there will be negative economic ramifications building up, due to the higher cost of debt for the average citizen (for mortgages, auto, personal, and small business loans). At that point, the Fed will begin cutting rates. I expect Stage 3 to happen by 2024. But the Fed may possibly expand its QE activities before that. If this scenario unfolds, Stage 1 can be a signal for investors to unload their cash holdings. It will cause massive buying across the markets. Investors will rush from cash to stocks or bonds. This move will bring back their cash positions from 25% to the 10-year average of about 17%. Recommended Link [The First Gas Station in America… To No Longer Offer Gas]( [image]( Discover what’s happening, live on-the-scene… And why soon, this development will be spreading to your hometown. [Click here now!]( -- What This Means for Your Money During this buying phase, keeping a list of the most desired stocks to get into is essential. That’s why, at [our Distortion Report advisory]( my team and I hand-pick the best stocks from five transformative sectors. These have the highest gain potential, even during turbulent markets. But if you’re not a paid-up Distortion Report subscriber yet, that doesn’t mean you have to sit on the sidelines when the cash tsunami flows in. Instead, you can select a broad-based S&P 500 exchange-traded fund (ETF) as a first-step substitute for cash. The SPDR S&P 500 ETF (SPY) is a great place to start. It’s the largest and oldest ETF in the world. And it has returned 54% over the last five years. Afterwards, you can weigh into specific sectors and names. But wherever you decide to put your money, keep this advice in mind… Never bet the farm on an investment – not even during the good times. And don’t rush to allocate all your funds at once. Take longer than usual to build your position. And spread your buying activity across a couple of months. At [Distortion Report]( we often use a two-step strategy. That means we buy a half-position when we first add a name to our model portfolio. Then we get into the second half if the stock dips by 20% or more. This allows us to achieve a better entry point, and it’s a good way to make the market’s chop work in your favor. After all, we’re still in a fragile and unstable market. It’s wise to be cautious. Happy investing, and have a fantastic Thanksgiving! Regards, [signature] Nomi Prins Editor, Inside Wall Street with Nomi Prins P.S. As a reminder, the markets and our offices are closed tomorrow. I’ll be in touch again with our usual mailbag edition on Friday. --------------------------------------------------------------- Like what you’re reading? Send your thoughts to [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=RE: Inside Wall Street Feedback). --------------------------------------------------------------- MAILBAG A Distortion Report subscriber makes an interesting suggestion… Since so many of your recommendations are based on climate solutions and other socially responsible investments, you might be a perfect candidate to offer an investment service specifically for those concerned about the climate crisis… or possibly just a socially responsible or ESG service. I sure know I have a really positive reaction to most of the investments you recommend. Nice to feel good about one's investments. Thanks! – Larry L. Are you on board with Larry’s idea? Has your allocation to cash changed in these tough markets? Write us at [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=RE: This Once Safe Investing Strategy Is Another Victim of The Great Distortion). 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