What Matters to Your Portfolio's Future Returns Is What's Coming Next

In today's Masters Series, adapted from the March 18 issue of our free DailyWealth e-letter, Mike explains why an "economic winter" is approaching despite growing optimism among investors... details how this looming crisis could create a slew of buying opportunities in the credit market... and reveals how you can prepare your portfolio to take advantage of this credit cycle... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Master Series] Editor's note: Don't let fear prevent you from profiting during this credit cycle... Many investors avoid the bond market and focus all of their efforts on stocks. But according to Stansberry's Credit Opportunities editor Mike DiBiase, bonds offer much safer investments than stocks. In today's Masters Series, adapted from the March 18 issue of our free DailyWealth e-letter, Mike explains why an "economic winter" is approaching despite growing optimism among investors... details how this looming crisis will create an incredible buying opportunity in corporate bonds… and explains why it’s critical for investors to understand the ins and outs of credit cycles in order to maximize gains in the upcoming credit crisis… --------------------------------------------------------------- What Matters to Your Portfolio's Future Returns Is What's Coming Next By Mike DiBiase, editor, Stansberry's Credit Opportunities It doesn't matter whether you want to pretend we're not in a recession... And it doesn't matter whether inflation falls a few tenths of a percentage from one month to another. What matters to your portfolio's future returns is what's coming next. If you think we're getting close to the time where it's wise to go "all in" on stocks again, I urge you to keep reading. Investors are wildly overoptimistic these days. Sure, our economy managed to grow over the past two quarters. Inflation is lower than it was six months ago, too. But when I look into the near future, one thing is clear to me... Things are about to get much worse... There are dark economic clouds on the horizon. I believe we're in the midst of a deep, prolonged period of slowing economic growth. As more folks wake up to this economic reality, it will trigger an even deeper sell-off in the stock market... and set off the next credit crisis. Let me be clear: This isn't something I want to happen. But if it is going to happen, as my colleague Dan Ferris likes to point out, it's better to be prepared for it. And it's even better if there's a way to profit from it. Fortunately, there is... Even though my outlook for the economy is gloomy, informed investors can still make money. Successful long-term investors must understand credit cycles... As the editor of Stansberry Research's corporate-bond newsletter, Stansberry's Credit Opportunities, it's my job to monitor what's going on in the credit market. Credit cycles are a "normal" part of the economy. A full-blown credit crisis occurs about once a decade. The last one was in 2008 to 2009. The one before that was in 2001. So we're overdue. Here's what's important... There's no need to fear recessions or credit crises. Once you accept this, you can prepare your portfolio so it doesn't have to suffer through them. Credit cycles are easy to understand... --------------------------------------------------------------- Recommended Link: [The Signs Are Clear: THIS Type of Crash Has Begun]( Top experts are calling it: A major crisis is now underway – something far bigger and more important than what happens to the Nasdaq or S&P 500. The world's best investors are ready to pounce, and so are a tiny handful of readers who know the secret to cashing in. That's because this crash will create a slew of 100%-plus opportunities... backed by legal protections that stocks can only dream of. It's finally happening. So it's critical that you [get the full story here right away](. --------------------------------------------------------------- When times are good, lenders (like banks, private-equity firms, and institutional investors) begin loosening their underwriting standards. That leads to a period of "easy" credit. As the credit pool expands, lenders eventually run out of people with good credit to lend to. Chasing profits, they target borrowers lower and lower on the credit ladder. Eventually, some of the low-quality loans begin to go bad. People or companies can't afford to make their loan payments... for whatever reasons. (Today, for example, it might be the effects of high inflation and rising interest rates.) That's when creditors start to "tighten" their lending standards. That means loans are harder to get, the loan sizes are smaller, and the terms of the loans are more favorable to lenders. This slows the economy, making it harder for other borrowers to repay their loans. Delinquencies lead to defaults, which lead to bankruptcies – both at the corporate and individual levels. Credit dries up. The result is a credit crisis. It clears out the bad debt and poor underwriting practices... and then the cycle starts again. Today, we're at the "easy credit" point in the cycle where low-quality loans are just beginning to go bad. Car repossessions are rising... And more than 20 million American households are behind in paying their utility bills. Credit-card debt and credit card interest rates are the highest they've ever been. It's the same story for businesses. Corporate debt is a record $13 trillion today. And since the beginning of 2022, interest rates on corporate debt have risen at the fastest pace in more than 40 years. On top of that bad news, the days of easy credit are over... According to the Federal Reserve's bank loan-officer surveys, credit has progressively tightened in each of the past three quarters. In other words, banks are becoming more cautious with all types of loans, including loans to both large and small companies, as well as with credit-card loans to consumers. Credit is now "tighter" than at any time since right before the last financial crisis, excluding a brief period early in the pandemic. Take a look... As credit continues to tighten, I predict we'll read more and more stories in the coming months about rising delinquencies, defaults, and bankruptcies. The Fed stepped in after the pandemic with unprecedented stimulus the last time credit tightened. But it's powerless to stop the credit crisis this time due to persistent inflation... Folks, an economic winter is coming. And when it arrives, the stock market and the even bigger corporate-bond market are headed much lower. I hope you've prepared for the coming economic winter... But if you haven't, it's not too late. You see, a credit crisis would be a good thing for my subscribers. The distressed corporate-bond strategy my colleague Bill McGilton and I employ in our Stansberry's Credit Opportunities newsletter performs best in times of crisis. That's when perfectly safe corporate bonds sell off to absurd, distressed levels. Savvy investors scoop them up for pennies on the dollar and make a killing. These bonds pay a legally obligated return on a set schedule, meaning you know what your return will be when you buy them. That's why we call these bonds safer than stocks, whose returns are always uncertain outside of a dividend payment. Now, we don't need bad economic times for our strategy to work. Since launching the newsletter in late 2015, we've done very well without a true credit crisis. We've earned an average annualized return of 10.2% on 62 closed positions. That's nearly double the return of the overall high-yield bond market. Since the pandemic, we've done even better. We've earned an average annualized return of 36.5% on 24 closed positions, nearly three times better than the overall high-yield bond market. That even beats the return of the overall stock market. And we've done it with investments that are much safer than stocks. We expect to do even better when the next credit crisis hits... Good investing, Mike DiBiase --------------------------------------------------------------- Editor's note: In a credit crisis, good companies' bonds often get beaten down by association with the bad ones. These falling prices drive yields (and potential returns) higher, making these investments incredibly attractive at a time when a lot of folks are panicking. In fact, one of Mike's longtime subscribers recently went public to share how he used this strategy to earn hundreds-of-percent gains and retire at age 52. [Click here to get the full details](... --------------------------------------------------------------- Recommended Link: [FedCoin Just Got BANNED – Will You Be Affected?]( Beginning this month, Executive Order 14067 will roll out the first phase of FedCoin across the U.S. banking system – whether you like it or not. It's the first-ever U.S. government-backed crypto. It's banned in Florida, but if you have a bank account, you WILL be affected. [Prepare now](. --------------------------------------------------------------- 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. For questions about your account or to speak with customer service, call 888-261-2693 (U.S.) or 443-839-0986 (international) Monday-Friday, 9 a.m.-5 p.m. Eastern time. Or e-mail info@stansberryresearch.com. Please note: The law prohibits us from giving personalized investment advice. © 2023 Stansberry Research. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Stansberry Research, 1125 N Charles St, Baltimore, MD 21201 or [www.stansberryresearch.com](. Any brokers mentioned constitute a partial list of available brokers and is for your information only. Stansberry Research does not recommend or endorse any brokers, dealers, or investment advisors. Stansberry Research forbids its writers from having a financial interest in any security they recommend to our subscribers. All employees of Stansberry Research (and affiliated companies) must wait 24 hours after an investment recommendation is published online – or 72 hours after a direct mail publication is sent – before acting on that recommendation. This work is based on SEC filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. It may contain errors, and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.