Don't Bet on a Soft Landing

In today's Masters Series, originally from the October 2 issue of the free Altimetry Daily Authority e-letter, Rob compares the current state of the market with past historical crises... explains why we're likely headed toward a recession... and reveals how investors can still find ways to profit amid this looming chaos... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Master Series] Editor's note: It's time to prepare for a financial storm... The market completed a strong first half this year, marking a pivot from 2022's brutal bear market. But according to Rob Spivey – director of research for our corporate affiliate Altimetry – a looming recession is poised to send stocks plummeting moving forward... That's why Rob believes it's critical for investors to explore assets outside of the stock market in order to avoid catastrophic losses throughout this market shift. In today's Masters Series, originally from the October 2 issue of the free Altimetry Daily Authority e-letter, Rob compares the current state of the market with past historical crises... explains why we're likely headed toward a recession... and reveals how investors can still find ways to profit amid this looming chaos... --------------------------------------------------------------- Don't Bet on a Soft Landing By Rob Spivey, director of research, Altimetry The market is officially in a tailspin... The S&P 500 Index returned 16% in the first half of the year. The tech-heavy Nasdaq Composite and the small-cap Russell 2000 Indexes were up 32% and 7%, respectively. But like all parties, this one had to end eventually... The indexes are all shedding their gains once again. The S&P 500 and the Nasdaq are both down more than 6% since the start of August. The Russell 2000 has sold off 13%. And mostly, it's for one reason... The market is finally starting to listen to the Federal Reserve. The Fed is serious about lowering inflation to its long-term target of 2%. It chose not to raise interest rates at its latest meeting, but another rate hike seems likely before the end of the year. The central bank is openly saying that interest rates will be higher for longer. Fed Chair Jerome Powell seems to think they'll be above 5% until at least the end of 2024. Don't expect rates to come back down to manageable levels until the Fed is sure inflation has vanished. That might not be until 2026. Given this economic outlook, strategists at the big financial institutions have changed their stance. A "soft landing" – where we avoid a recession – isn't likely. These folks are now predicting a bumpy ride. An outlook like that makes it a lot harder to find a good investment strategy. But it's not impossible... --------------------------------------------------------------- Recommended Link: [Last Call: Most Important Stock Warning of 2023]( The same ironclad "law" of finance that predicted 2008 says the next three years could be dangerous and painful for stockholders. But there's a "backdoor" strategy that could show you high-double-digit income and triple-digit gains right through this crisis. And now, a generational opportunity is beginning, where the upside could be extraordinary. By tomorrow, [click here for full details](. --------------------------------------------------------------- Today, we'll discuss what types of assets are best suited when a recession is on the horizon. Historically, stocks take a beating during a "hard landing"... Remember, that's just the modern language for a recession. And when it happens, one other thing is pretty much guaranteed to happen... a bear market for stocks. When the dot-com bubble burst, the S&P 500 dropped 49% from its all-time high. During the Great Recession, it dropped 57%. And during the pandemic, stocks lost more than 30% in just a month. All the major indexes seem to be catching on today. It could be a sign that the market is starting to roll over. But not all asset classes lose value during a downturn. One of our favorite places to look outside the stock market is corporate bonds. Since 1950, the bond market's average performance has crushed stocks during recessions. Bonds are different from stocks because you're contractually guaranteed to get your money back at maturity. They also offer fixed interest payments over the duration of your investment. This predictable income stream acts as a buffer against market uncertainties. Bondholders are also positioned higher up in the hierarchy of financial claims. This means they get priority over stockholders if the company goes bankrupt. And again, unlike with stocks, bondholders' money is protected by legal contracts. Once you buy a bond, you know exactly what your return will be as long as the company stays afloat. In short, bonds are a more reliable and far more defensive asset than stocks. Over the past seven decades, they've returned an average of more than 10% per year during recessions... while stocks fell. Folks typically think of bonds as low-risk, low-reward assets... But that's not always the case. These panic times create opportunities for double-digit yields in bonds... and sometimes triple-digit gains. When the stock market panics, many other markets briefly follow suit. That means bond prices can plummet. If you're patient, [you can buy perfectly safe bonds at significant discounts](. If market sentiment stabilizes or the issuer's financial health improves, bond prices can rebound sharply. And even if they don't... as a bondholder, you don't care. As long as the company doesn't default, your money is guaranteed at maturity. You lock in that return when you buy the bond. The economy is bracing itself for a hard landing. But there's still time to prepare. Start familiarizing yourself with the bond landscape. When we enter a recession, there will be plenty of cheap, safe opportunities to keep your portfolio happy. Regards, Rob Spivey --------------------------------------------------------------- Editor's note: The stock market is faltering. It doesn't look like we'll see a recovery anytime soon. But that doesn't mean you should let your portfolio dry up. You see, Rob believes the coming crisis will create one of the best credit-market opportunities since the Great Recession... Patient investors will have a chance to scoop up safe high-yield bonds for pennies on the dollar – with returns that are backed by legal protections. That's why he recently laid out the steps every investor must take, as soon as possible, to take advantage of this rare opportunity. [Click here to watch the free replay](... --------------------------------------------------------------- Recommended Link: [See Porter Stansberry (and More) Live]( Stansberry Research founder Porter Stansberry will be on stage with all of your favorite editors and analysts at this year's Stansberry Conference & Alliance Meeting beginning October 16. [Claim your livestream pass right here](. --------------------------------------------------------------- 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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