New Year, New Market Concerns (and Solutions)

New year, new market concerns (and solutions)... A global recession should be expected... Bah, humbug... The sideways market may already be here... 2023 could be messy... It could also be a great investing opportunity... The mailbag is back... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Digest] New year, new market concerns (and solutions)... A global recession should be expected... Bah, humbug... The sideways market may already be here... 2023 could be messy... It could also be a great investing opportunity... The mailbag is back... --------------------------------------------------------------- Happy New Year... I (Corey McLaughlin) will begin with the pleasantries today – the first trading day of 2023 – because, frankly, they might be hard to come by for the rest of the year. Sorry to start a new year with what may sound like a familiar "bah, humbug" routine... But we're here to speak about realities in the economy and markets, and the outlook isn't promising. We began this morning by reading a daily market preview from our Stansberry NewsWire editor C. Scott Garliss. [The headlines he shared]( didn't paint a rosy picture. Here's one that might be the most significant... International Monetary Fund Managing Director Kristalina Georgieva warned that the global economy faces "a tough year, tougher than the year we leave behind," as the U.S., EU, and China slow down simultaneously. If you're in the U.S., you should know the story by now... We're still dealing with 40-year-high inflation. And as the Federal Reserve keeps raising interest rates to try slowing inflation to "normal" levels, it's legitimate to expect a recession and consider what it would look like. In Europe, the situation is similar... but much worse. It faces a lot of the same supply-and-demand imbalances the U.S. and the rest of the world have dealt with over the past year-plus, in addition to the more direct energy-related impacts of the still-raging war in Ukraine. Fed Chair Jerome Powell and his fellow string-pullers are talking about slowing the pace of rate hikes in the U.S. as inflation looks like it is already easing. But European Central Bank President Christine Lagarde is saying her institution must raise interest rates more to ensure inflation growth doesn't become entrenched. And in the Far East, China's economy just ended the year in a major slump as business and consumer spending plunged in December, with more disruption likely in the first few months of the year as COVID-19 infections surge across the country. Georgieva, the head of the IMF, said on CBS's Face the Nation program over the weekend... For the first time in 40 years, China's growth in 2022 is likely to be at or below global growth. Putting together what's going on in these areas, the IMF – an organization that aims to promote global economic expansion – anticipates one-third of the global economy will experience a recession in 2023. 'Bah, humbug' indeed... The good news is this sort of scenario shouldn't catch you off guard if you've followed along with the Digest for the past year. And concerns about inflation and at least some concern about a recession are already reflected in the markets. Thus the awful year for stocks and bonds that we just saw, and the worst for "safe" government bonds in particular since the days of the pen and quill. The bad news is that a lot of what may still be to come in 2023 – like a recession... unknown potential job losses... hits to corporate earnings... and the fragile state of everyday Americans' finances – hasn't yet been fully recognized by the markets. I won't get too much further into these details today. I sense we'll have plenty of time to do so this year. Up first, our colleague and Stansberry's Credit Opportunities editor Mike DiBiase has a terrific essay lined up for you tomorrow on what he's expecting along these lines over the next 12 months. But just know that tough times may be ahead for the economy in 2023. For the record, the benchmark S&P 500 Index kicked off the trading year down slightly today. It begins 2023 below its 50-day and 200-day moving averages – after rallying above both briefly in the middle of December. In other words, the long-term trend for U.S. stocks is still down. And looking backward, the S&P 500 – while seeing plenty of volatility over the past 12 months – is at the same level it was in June. Perhaps the sideways market that we've considered a possibility in the years ahead is already here. The year ahead could be similarly messy... We're unlikely to get out of a massive financial bubble, multidecade-high inflation, and an economy manipulated by governments saddled with unfathomable debts in some quick, easy, and clean fashion... Toward the end of 2022, we talked about how the days of the "bull market genius" are long gone... the "buy the dip" era is over... and the set-it-and-forget-it 60/40 stock-bond portfolio got crushed in the past year. Nice returns became considerably harder to come by over the past 12 months than they were during the stimulus-fueled days of 2020 and 2021... and the low-interest-rate decade-plus that preceded the pandemic. Say goodbye to those days... Interest rates have already risen at a near-record pace. The only faster increases in "modern" were the inflation-fighting rate hikes in the 1970s into 1980. Any cuts in rates will add fuel to an already high inflationary fire... (So will forever-reckless government spending, like the nearly $2 trillion that Congress quietly approved over the holiday season.) In other words, the Fed isn't coming to the rescue anytime soon. But it might not be all bad for savvy investors in 2023, either... The key words for successful investing this year might be patience... and prudence... While the "easy money" days might be gone, this sea change in the investing climate can be a great thing for savvy investors. Recognize the features of today's environment, and your portfolio can benefit. Conversely, ignore what's happening now at your own peril. To this point, I'll reshare a part of [last Friday's Digest](. As our colleague Dan Ferris wrote... As [I told Stansberry Digest readers]( in June, the past 20 years saw steady trends of falling interest rates, climbing housing prices, soaring stock market valuations, and a growing economy. Today, it's the opposite... Interest rates are rising, the stock market's overall valuation has tanked (and yet is still very expensive by the most reliable metrics), and the economy is shrinking in inflation-adjusted terms. Here's the list of items I published in the Digest to try to orient readers to this new reality and help them say goodbye to the old one. (You might print this out and tack it up near where you do most of your investment reading and research. It's hard to keep all this stuff in mind, but two years from now, you'll be glad you did.) I'm not saying these trends will hold 100% of the time for the next several years. I'm saying times have changed, and we need to adapt in order to overcome what's in store. I second Dan's suggestion to print out that list or scribble it down where you keep your investing notes and research (an extremely useful thing to have on hand). In some cases, "adapt" might simply mean remembering what works and is right for today's time. Certain sectors may outperform others, and fundamentals will be in style. I said this several times toward the end of last year, like in [the November 17 Digest](... I don't doubt that high-quality businesses that generate gobs of free cash flow will keep benefiting shareholders over the long run. Some industries, like insurance and health care, will even benefit from inflation and higher interest rates. A higher-rate era can be a really great opportunity to find and own stocks of great businesses that provide value or in-demand services or products. It's the same for businesses that are able to consistently grow in a tougher growth environment. It's a great time to get to work... as opposed to purely speculating on tech or unproven growth names in a 0% interest world, then basking in "bull market genius" status. This is an opportunity to really separate yourself from other folks with money in the markets who aren't paying attention to what's really going on. Parting thoughts for the year ahead... When it comes down to it, dollars – while still losing their value over the long run simply because of the fiat currency system – are relatively more expensive than they have been in at least a decade. This means weaker businesses won't have nearly as easy of a time making profits... so it's essential to own shares of high-quality businesses – again. Some people will call these "value" stocks. That's fine. I just call them good businesses. If you have investments in bad companies, the characteristics of today's "reality," as Dan put it, could be a bad thing. (Unless you are betting against them or unless you know where to find investments that could be once-in-a-lifetime buys in a crisis, like the distressed bonds Mike has been talking about lately... and will again tomorrow.) But if you own shares of high-quality companies, today's higher-rate scenario can be a good thing. If you're patient, these businesses can reward you with dividends and buybacks even while the stock market is in a slump... and then reward you even more when bullish times inevitably return. Short-term trading opportunities have a similar picture. This year could be another volatile one, and that can be great if you have a good guide to follow. Just today, for example, Ten Stock Trader editor Greg Diamond [preached the word "patience"]( when discussing trades he is eyeing up this month. This is why Stansberry Research employs so many top-tier editors and analysts – to do this work for you, be it finding great long-term buying opportunities in a quality company or weighing the risk-reward setup of a short-term trade. Then you can fit their research into your goals to protect and increase your wealth. The headlines might be sour. A recession – be it mild, medium, or dangerously hot – could be on the way. But if it happens or if it doesn't, there will be ways to make money in 2023, and there will be steps to take to protect your hard-earned savings. We're glad to have you follow along with us once again. Our Mailbag Is Full, Thanks to You Dan Ferris and I answered as many listener feedback messages as we could cram into one episode of the Stansberry Investor Hour. In this special show, we share your feedback on our free weekly podcast – both good and bad – and give our take on your top questions... [Click here]( to listen to this episode of the Stansberry Investor Hour right now. And to catch all of the podcasts and videos from the Stansberry Research team, be sure to [visit our Stansberry Investor platform]( anytime. --------------------------------------------------------------- Recommended Links: # ['I Found the Answer to Retirement']( A reader came forward with his unique story of how he retired early and worry-free WITHOUT stocks... thanks to ONE single idea that anyone can use. Now, he sees 16%-plus annual returns with legal protections... and he NEVER has to worry about another market crash. Get the full story today, and [claim a holiday "bonus gift" that he secured on your behalf, right here](. --------------------------------------------------------------- # [UPDATE: Market Meltdown 2023]( What happens in the coming weeks could make or absolutely break your retirement. That's what history has shown when stocks are falling, inflation is rising, the Federal Reserve's raising rates, and economic activity is slowing. But Dan Ferris recently stepped forward with an insanely simple solution to protect your wealth. [Full details here](. --------------------------------------------------------------- New 52-week highs (as of 12/30/22): Novo Nordisk (NVO). We're back from our holiday break with our regular Digest mailbag starting today. As always, keep your comments, questions, praise, rage, and observations coming all year long to feedback@stansberryresearch.com. Today, we have a few notes that have come in over the past week or so, including a general letter of appreciation... feedback on [Dan's December 30 Digest](... and thoughts on [Mike DiBiase's December 31 Masters Series essay](. "You are entitled to our applause for a successful year in spite of the challenge! Your years of experience and learned disciplines have gifted you to offer outstanding advice year after year. Shame on those of us who didn't follow your advice as closely as we should have but then a dose of humility is a good way to gain a bit of wisdom and trust." – Paid-up subscriber Wayne S. "Dan, Great Digest [on December 30]. Another home run! "Being a statistician I find your analysis to be such a great description of the rate cycle process. One of the very important points that most of today's math degenerate society doesn't understand is just how variable natural events are. This was documented more than a century ago when H.E. Hurst studied Nile River levels and found they do not follow a normal distribution but a much wider distribution... "Of course Mandelbrot, the father of Chaos Theory, showed many examples of the natural variation in nature is much larger than the normal distribution would allow. So using river levels to describe the stock market is an excellent example. "Since we are talking probability here there is certainly a chance that stock prices could go higher but considering the forces and evaluation methods you refer to – and other market gurus, like Druckenmiller, Dalio, Munger and Marks refer to – are building a rather large amount of evidence against a higher market at this point. I can't include myself as being particularly insightful. I've been bearish for 15 years because of outrageous debt but the imbeciles just kept it growing... "What has really amazed me is how long and persistent this bullish mentality has been. Even now with virtually everything pointing to weakness there are still plenty of bulls spouting how stocks should be bought despite the failure of so many loose credit created disasters such as crypto, SPACs, bonds, rates, debt levels with default already in action via inflation. "Great run, Dan. Thanks for your persistence and the rest of the Stansberry crew certainly has been amazing as this has unfolded for the 20 years I've been following your team." – Paid-up subscriber Al M. "I agree with [Mike DiBiase's] analysis of more economic difficulties ahead. By definition, increases in wage rates without corresponding increases in productivity results in inflation. Upward pressure on wage rates will not slow until the supply for jobs exceeds the demand (higher unemployment). Then and only then can inflation be tamed and interest rates cut. Creating inflation is easy. Under normal circumstances taming it is much more difficult and always painful. "Unfortunately these are not normal times. We don't have a normal labor market... [This] can easily be seen in the participation rate, the lowest in decades. There is such a shortage in the labor market today with so many sitting on the sidelines that I am afraid a far greater decline in economic activity than normal will be required before upward pressure on wage rates will subside... "If fiscal policy doesn't get in step with monetary policy we are in for a never ending spiral like we've witnessed in Argentina, the Weimar Republic and so many other failed economies. The recent passage of the $1.7 trillion Omnibus bill suggests the government has no interest in working with the Fed to control inflation and work toward a soft landing. It appears to me that we may not be headed for an economic ditch but instead a cliff." – Paid-up subscriber Ron J. All the best and happy New Year, Corey McLaughlin Baltimore, Maryland January 3, 2023 --------------------------------------------------------------- Stansberry Research Top 10 Open Recommendations Top 10 highest-returning open positions across all Stansberry Research portfolios Stock Buy Date Return Publication Analyst MSFT Microsoft 11/11/10 859.5% Retirement Millionaire Doc ADP Automatic Data 10/09/08 847.9% Extreme Value Ferris MSFT Microsoft 02/10/12 737.4% Stansberry's Investment Advisory Porter WRB W.R. Berkley 03/16/12 640.3% Stansberry's Investment Advisory Porter HSY Hershey 12/07/07 554.5% Stansberry's Investment Advisory Porter ETH/USD Ethereum 02/21/20 450.3% Stansberry Innovations Report Wade BRK.B Berkshire Hathaway 04/01/09 447.7% Retirement Millionaire Doc AFG American Fin 10/12/12 440.1% Stansberry's Investment Advisory Porter ALS-T Altius Minerals 02/16/09 322.5% Extreme Value Ferris FSMEX Fidelity Sel Med 09/03/08 303.8% Retirement Millionaire Doc Please note: Securities appearing in the Top 10 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the model portfolio of any Stansberry Research publication. The buy date reflects when the editor recommended the investment in the listed publication, and the return shows its performance since that date. To learn if a security is still a recommended buy today, you must be a subscriber to that publication and refer to the most recent portfolio. --------------------------------------------------------------- Top 10 Totals 4 Stansberry's Investment Advisory Porter 3 Retirement Millionaire Doc 2 Extreme Value Ferris 1 Stansberry Innovations Report Wade --------------------------------------------------------------- Top 5 Crypto Capital Open Recommendations Top 5 highest-returning open positions in the Crypto Capital model portfolio Stock Buy Date Return Publication Analyst ETH/USD Ethereum 12/07/18 1,091.6% Crypto Capital Wade ONE-USD Harmony 12/16/19 1,050.5% Crypto Capital Wade POLY/USD Polymath 05/19/20 1,037.3% Crypto Capital Wade MATIC/USD Polygon 02/25/21 831.0% Crypto Capital Wade TONE/USD TE-FOOD 12/17/19 368.2% Crypto Capital Wade Please note: Securities appearing in the Top 5 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the Crypto Capital model portfolio. The buy date reflects when the recommendation was made, and the return shows its performance since that date. To learn if it's still a recommended buy today, you must be a subscriber and refer to the most recent portfolio. --------------------------------------------------------------- Stansberry Research Hall of Fame Top 10 all-time, highest-returning closed positions across all Stansberry portfolios Investment Symbol Duration Gain Publication Analyst Nvidia^* NVDA 5.96 years 1,466% Venture Tech. Lashmet Band Protocol crypto 0.32 years 1,169% Crypto Capital Wade Terra crypto 0.41 years 1,164% Crypto Capital Wade Inovio Pharma.^ INO 1.01 years 1,139% Venture Tech. Lashmet Seabridge Gold^ SA 4.20 years 995% Sjug Conf. Sjuggerud Frontier crypto 0.08 years 978% Crypto Capital Wade Binance Coin crypto 1.78 years 963% Crypto Capital Wade Nvidia^* NVDA 4.12 years 777% Venture Tech. Lashmet Intellia Therapeutics NTLA 1.95 years 775% Amer. Moonshots Root Rite Aid 8.5% bond 4.97 years 773% True Income Williams ^ These gains occurred with a partial position in the respective stocks. * The two partial positions in Nvidia were part of a single recommendation. Editor Dave Lashmet closed the first leg of the position in November 2016 for a gain of about 108%. Then, he closed the second leg in July 2020 for a 777% return. And finally, in May 2022, he booked a 1,466% return on the final leg. Subscribers who followed his advice on Nvidia could've recorded a total weighted average gain of more than 600%. You have received this e-mail as part of your subscription to Stansberry Digest. If you no longer want to receive e-mails from Stansberry Digest [click here](. Published by Stansberry Research. You’re receiving this e-mail at {EMAIL}. Stansberry Research welcomes comments or suggestions at feedback@stansberryresearch.com. This address is for feedback only. 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