The S&P 500: Cut in Half?

Look out... [Wealthy Retirement]( SPONSORED ["Get Unrestricted Access to All My Favorite Income Investments Today!" - Marc Lichtenfeld]( [Small Bag of Money]( If you want to discover... - My No. 1 strategy for building a constant extra income stream - Details on my 12 favorite dividend stocks that could help you earn an extra income check every month - for the rest of your life - How you can get unrestricted access to all of my top income research and investment recommendations NOW and in the future... [Click here now...]( Editor's Note: Does this market look familiar? As Contributing Analyst Jody Chudley writes below, it should. One key metric puts our current market on par with both the 2000 dot-com bubble and the 2007 to 2008 housing bubble. Investors are diving into speculative plays like crypto in search of big profits... but it's unclear what will happen in the long term. That's why it's important to know how to play hot trends as safely as possible. And in his VIP Trading Research Service [Predictive Profits]( Chief Income Strategist Marc Lichtenfeld wants to show you how. He's discovered a stock that can benefit from crypto's rise without posing the same risk as a coin or requiring the same complicated maintenance as a digital wallet. In fact, this unconventional crypto play can be held in any brokerage account. [Click here to learn more.]( - Mable Buchanan, Managing Editor [FINANCIAL LITERACY]( Margin Debt: The Canary in the Coal Mine Jody Chudley, Contributing Analyst, The Oxford Club [Jody Chudley] Buckle up, folks... because we might be in for another bumpy ride. The chart below has me concerned. It shows the yearly change in the amount of margin debt carried by U.S. investors. [U.S. Margin Debt is Soaring Out of Control]( Margin debt is money that an investor borrows from their broker to buy stocks. My opinion on margin debt is pretty simple - I don't believe it should ever be used. Today, I want you to see the year-over-year increase in margin debt. It's unlike anything we have seen in decades - or ever. You will also notice that over the past three decades, there were two prior instances when margin debt suddenly spiked, albeit not nearly as severely as it has this time. Those were in 2000 and 2007. If you have been investing for a while, the fact that I'm connecting the market conditions of today with those two years should have you thinking... "uh-oh." The margin debt spikes of 2000 and 2007 immediately preceded two of the worst stock market crashes in history. [In 2000]( margin debt soared as investors chased technology and internet stocks ever higher. Here is how the S&P 500 performed after margin debt peaked in March 2000... [The Long, Painful Tech Bubble Burst]( From the market peak in March 2000, the S&P 500 [entered a steady decline]( that did not end until October 2002. The decline was almost exactly 50%. The popular internet and technology stocks of the day fared much worse. By 2007, most investors seemed to have recovered from the 2000 market crash and margin debt had soared once again. The investing herd always gets greedy at the worst possible times... SPONSORED [Look at What Obama Is Up to Now!]( On June 16, 2021, Obama will get his last laugh. That's when a group of his hand-picked cronies may single-handedly bring this market to a sudden and destructive end. To continue reading, [click here](. This time, the popping of the [housing bubble]( was the catalyst that caused the market meltdown. This triggered the freeze of the entire global financial system, which exacerbated the stock market crash. [The 2008 Market Crash Was Even Worse]( The top-to-bottom crash in the S&P 500, from the peak in October 2007 to the bottom in March 2009, was almost 57%. Soaring margin debt was a warning sign of impending market turmoil. Don't Stick Your Head in the Sand The last two spikes in margin debt in 2000 and 2007 both happened right before the entire S&P 500 was cut in half. Yet, against the increase in margin debt that has happened over the past 12 months, those increases in 2000 and 2007 look pretty tame. That has to be considered a flashing warning sign. We could soon be in store for another unpleasant stock market experience. Now, to be clear, I'm not saying that a major stock market decline is certain to happen. I'll never claim to be certain of such things. But to look at this chart against what has happened historically when margin debt spikes and then pretend there isn't a good chance trouble is brewing would be silly. Plus, soaring margin debt isn't the only canary in the coal mine... I recently [wrote]( to you about how one of the smartest investing shops that I know currently has the lowest exposure to U.S. stocks in the three-decade history of the firm. I also detailed [three other major warning signs]( that suggest a market correction could be coming. I find it a bit unusual that we are barely a year removed from a severe market sell-off and another one could be approaching. But then again, the astounding recovery of the stock market over the past 12 months was also very unusual. If I'm right and the market does suddenly roll over, it isn't anything to fear. For long-term investors who are still actively buying stocks, [a big sell-off is good news]( because it allows them to purchase companies at better valuations. And always remember that even the worst market crashes are minor bumps in the long-term upward journey of the stock market. [The S&P Just Roars Higher]( For people who have money invested that they are going to need in the near future, though, I think now is a great time to consider taking some profits. There is clearly more than enough smoke to suggest a major market event could be coming, and you don't want to risk being forced to cash out during a panic. If you have cash in the market that you are going to need in the next 18 months, I wouldn't expose it to what could be coming. Good investing, Jody P.S. There are a few rules for riding out a bear market... Don't invest funds you need in the near term, stick to your stops (but don't panic-sell), make a wish list of stocks to buy when the market tanks and diversify... If you're ready to learn how to diversify into digital currency (but want to do it more safely than chasing after the next big coin), take a look at [Marc's latest presentation](. He's found a stock that offers exposure to 36-plus crypto opportunities. [Leave a Comment]( MORE FROM WEALTHY RETIREMENT [Count On This Banking Giant]( [Hedge Your Portfolio Against Inflation Now]( [The Right Way to Speculate]( [Facebook]( [Facebook]( [Twitter]( [Twitter]( [Email Share](mailto:?subject=A%20great%20piece%20from%20Wealthy%20Retirement...&body=From%20Wealthy%20Retirement:%0D%0A%0D%0ALook%20out...%0D%0A%0D [Email Share](mailto:?subject=A%20great%20piece%20from%20Wealthy%20Retirement...&body=From%20Wealthy%20Retirement:%0D%0A%0D%0ALook%20out...%0D%0A%0D [Email Share]( [Push Alert]( SPONSORED [Bill O'Reilly Breaks Down]( [The Oxford Club]( You are receiving this email because you subscribed to Wealthy Retirement. Wealthy Retirement is published by The Oxford Club. Questions? Check out our [FAQs](. Trying to reach us? [Contact us here.]( Please do not reply to this email as it goes to an unmonitored inbox. [Privacy Policy]( | [Whitelist Wealthy Retirement]( | [Unsubscribe]( © 2021 The Oxford Club, LLC All Rights Reserved The Oxford Club | [105 West Monument Street](#) | [Baltimore, MD 21201](#) North America: [1.800.589.3430](#) | International: [+1.443.353.4334](#) | Fax: [1.410.329.1923](#) [Oxfordclub.com]( The Oxford Club is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual. Members should be aware that although our track record is highly rated by an independent analysis and has been legally reviewed, investment markets have inherent risks and there can be no guarantee of future profits. The stated returns may also include option trades. We expressly forbid our writers from having a financial interest in their own securities recommendations to readers. All of our employees and agents must wait 24 hours after online publication or 72 hours after the mailing of printed-only publications prior to following an initial recommendation. Any investments recommended by The Oxford Club should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Protected by copyright laws of the United States and international treaties. The information found on this website may only be used pursuant to the membership or subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of The Oxford Club, 105 W. Monument Street, Baltimore MD 21201.