These elite stocks are bear-market proof… They even sailed through the dot-com crash and 2008… Can these trading strategies save your retirement?… In the mailbag: “Take away liberty and maybe four people will look up from their phones”…
There are trends that make you money. And there are trends that rob you of wealth.
Yesterday, we looked at one of the most common wealth stealers – bear markets.
And we showed you why former hedge fund manager Teeka Tiwari recommends cash and gold as two simple ways to protect your portfolio.
But those aren’t the only ways to play defense ahead of the next bear market.
That’s why, today, we’re turning back to Teeka.
He and his team at The Palm Beach Letter have been researching an elite group of stocks you can feel confident owning through even the worst market plunges.
Over the past 20 years, these stocks haven’t fallen more than 10% in any one calendar year.
And that includes two of the worst bear markets in history – the 2000-02 dot-com crash, when the S&P 500 lost 49%… and the 2007-09 subprime mortgage meltdown, when it plunged 57%.
If you’re retired – or hoping to retire soon – this strategy may be the game-changer that determines whether you live the rest of your life in comfort or spend it just getting by.
How do I know?
Because my dad is nearing his goal retirement age. But he didn’t have the money he needed to retire. And then I gave him this little “test” and was shocked how it all turned out.
If you’re not already familiar with our Palm Beach Letter advisory, Teeka’s mission there is to help his readers make money safely so they can enjoy a comfortable, dignified retirement.
But it’s difficult to feel safe and comfortable when you’re staring a bear market in the face.
As we’ve been showing you, one swipe of the bear claw can cut the value of your stock market portfolio in half.
And since it takes a 100% gain to erase the damage done by a 50% drop… avoiding steep losses should be one of the key principles of any sound investment strategy.
Buffett heads up the investment firm Berkshire Hathaway (BRK.A).
And he’s made more money over his seven decades in the market than any living investor.
He bought his first stock when he was 11. By the time he was 16, he’d made the equivalent of $53,000 in today’s dollars. And in 2013, he made $37 million on average… per day.
Now, with a net worth of over $87 billion, he’s the third-richest person in the world.
Buffett says his top rule for making money over the long term in the markets is, “Never lose money.”
And his Rule No. 2 is, “Never forget Rule No. 1.”
Sounds simple enough… But we all know it isn’t.
Let’s go back to those two bear markets we mentioned earlier – 2000-02 and 2007-09.
Here’s Teeka’s coauthor at The Palm Beach Letter, Grant Wasylik, on how you would have fared during two bear markets with the typical blue-chip stock…
From its 2000 peak to 2002 valley, the S&P 500 fell 49% – one of the biggest crashes in history. Stalwart stocks such as AT&T, McDonald’s, and General Electric plunged 53%, 52%, and 59% respectively.
The 2008 crash was even worse. From its 2007 peak to its 2009 low, the S&P 500 plunged 56.8%. The average blue-chip stock collapsed 53.5%.
You may be thinking there was no place to hide during these bear market wipeouts. But during even the worst years of these two bear markets, the Untouchables made gains.
You’re looking at the annual returns for the S&P 500 (black bars) versus the annual returns for the Untouchables (green bars).
As you can see, the Untouchables breezed through the 2000-02 bear market.
They were up 26% in 2000 when the S&P 500 was down 9.1%. They were up 15.6% in 2001 when the S&P 500 was down 11.9%. And they were up 15.1% in 2002 when the S&P 500 was down 22.1%.
Same goes for the 2007-09 bear market… The Untouchables were up 2.2% in 2008 when the S&P 500 was down 37%.
And more recently, in 2018, they were up 17.2% when the S&P 500 was down 4.4%.
Out of consideration for Teeka’s paid-up subscribers, we can’t share the full details of his Untouchables strategy. (He and Grant have identified a total of 14 stocks that make the cut.)
But Teeka kindly agreed to share one of the Untouchables with Daily Cut readers.
Do the brands Band-Aid, Tylenol, Motrin, Aveeno, and Listerine ring a bell?
They all belong to one of Teeka and Grant’s Untouchables – Johnson & Johnson (JNJ).
And JNJ isn’t just a defensive stock. It’s constantly innovating and growing.
From the most recent issue of The Palm Beach Letter (Teeka’s paid-up subscribers can catch up in full here)…
Just last year, JNJ invested $11 billion in research and development (R&D). It completed 13 acquisitions and signed 103 strategic deals and partnerships.
This company has 26 brands that do over $1 billion in sales. It’s one of only two U.S. companies that carry a AAA rating (a higher credit rating than the U.S. government). And over the last 19 years, it’s more than doubled the return of the S&P 500.
In short, if you’re looking for a stock to hold through the next bear market, JNJ is the perfect candidate…
You remember 2008. It was sheer panic.
The S&P 500 plunged 37% that year. But JNJ hardly budged. It fell just 7.8% in 2008.
JNJ’s worst year, going back to the start of the new millennium, was in 2002, when it fell 7.9%.
In fact, it’s in the top 15% of the least volatile stocks in the S&P 500. Even so, it’s crushed the returns of the S&P 500 over that period.
Since 2000, it’s returned 364% versus a return of 171% for the S&P 500.
So consider adding JNJ to your portfolio now.
And if you’re a Palm Beach Letter subscriber, make sure and catch up on the full details of Teeka and Grant’s Untouchables strategy. You can access their original write-up here.
Remember, his mission is to help his readers achieve a comfortable and dignified retirement.
That’s why, last year, he began working with one of the top traders here at Legacy Research…
They set out to recreate some of the strategies Teeka reserved for his wealthiest clients when he ran his own hedge fund.
Now, you may think of trading strategies as no use for someone at or near retirement… because trading is inherently risky.
But as Teeka reveals in this new presentation, that couldn’t be further from the truth.
In today’s mailbag, your fellow readers weigh in on two of the hottest topics here at the Cut – the rise of socialism in America and the rapid growth of the U.S. Surveillance Society…
Socialism is the worst because it will destroy the creative and innovative feature in human life. There is no incentive to work, or to invent better things to help mankind. Like in the former USSR people will drink to excess to drown the pain. Surveillance follows socialism. Socialism will love surveillance.
– Edith J.
Very wise and insightful remarks about freedom. Take away liberty and maybe four people will look up from their phones.
– Sarah M.
It is an error of semantics to speak of ‘socialism’ when meaning populism. Puppet governments controlled by the Deep State do not act in the broad interests of the general population. They “buy” votes with false promises, fake news, and propaganda. When they have successfully destroyed all semblance of democracy and all faith in it – which they are well on the way to accomplishing – they may feel there is little to be lost in coming to the fore.
The extreme measures of population control they are finding necessary to institute should, in a rather perverse manner, be some cause for optimism.
– Eric J.
This edition was one of the more brilliant you have published. The Deep State is more dangerous than the threat of socialism to America. We can always tire of socialism and rebel from it. The Deep State is unbeatable – it will get deeper and deeper, inexorably under our skins.
– Mark S.
Is the Deep State or the rise of socialism the biggest threat to your freedom? Or are you more concerned about protecting your wealth in the next bear market?
As always, you can reach us at [email protected]. We love to receive your thoughts and ideas. And whether we feature it or not in our regular mailbag sections, we read every email you send.
Regards,
 |
Chris Lowe
February 13, 2019
Lisbon, Portugal