More Articles | Free Reports | Premium Services Talk about a wild ride… After days of nailing-biting stock market plunges, President Trump has called a truce in the trade war. Writing on social media yesterday, he said he’d pause a raft of double-digit tariffs to most countries. (His tariffs on China still stand… at a rate of 145%.) After losing as much as 11% since “Liberation Day,” this sent the tech-laden Nasdaq surging 12%. That kind of gain isn’t normal. You have to look back to the dark days of 2008 to find a one-day move that big. Today, the roller coaster continues. After investors got a chance to digest yesterday’s news bomb, the selling pressure has come back. As I type, the Nasdaq is down about 4% for the day. If you’re trying to make sense of this, let me paint a mental picture for you. There’s a polarizing president who follows his gut and doesn’t mind bending the rules… There’s a trade shock that jolts the market… And this happens in an expensive market while investors are heavily concentrated in a handful of tech stocks… That sounds a lot like now. But I’m talking about 1973. And if the past is prologue, that’s not a good sign. So, today, I’m once again passing on my “to-do list” for how to survive and thrive through the volatility ahead. Is the Magnificent Seven the New Nifty Fifty? In 1973, Pink Floyd released “Dark Side of the Moon.” Bell-bottoms, sideburns, and long hair were all the rage. And the Watergate Scandal was in full swing. It’s also the year the OPEC oil cartel imposed an oil embargo on nations that supported Israel during the Yom Kippur War—including the U.S. Gas prices shot up. There were long lines at gas stations. And the country slid into a long and painful stagflation – a worst-of-both-worlds mix of high inflation and low growth. Today, most investors are loaded up on Nvidia, Tesla, and other Magnificent Seven tech stocks. Back then, the go-go growth darlings were the Nifty Fifty – a group of 50 high-growth blue-chips stocks that had been on a tear. These companies were seen as “one-decision” stocks — you buy them, and you never sell them. And they’d made a generation of Americans rich. From roughly 1965 to 1972, many Nifty Fifty stocks saw massive gains, often far outpacing the S&P 500. For example… -
McDonald’s rose more than 700% -
Disney gained over 900% -
Coca-Cola and IBM both more than tripled. -
Polaroid was up more than 1,200% during the decade In the early 1970s, investors piled into these stocks regardless of valuation. Many traded at P/E ratios of 50, 60, even 90. Investors poured money into them with the belief that their earnings would keep compounding indefinitely—and that they were worth any price. Then major Arab exporters slapped an oil embargo on the U.S. and its allies… and the bottom fell out. In the 1973-74 bear market, the Nifty crashed... The most interesting part of the story? The Arab oil states lifted the embargo in March 1974. But the stock market kept falling for months. The damage was done. Stagflation had set in. We didn’t see a new durable uptrend until 1982 – nearly a decade later. Recommended Link | | President Trump's tariffs are only the tip of the iceberg. A growing threat is poised to widen the gap between the Haves and the Have Nots... Permanently change our economy… And dramatically affect your money, the value of your home, your investments, and your ability to retire. Click here to watch Louis Navellier's urgent warning. | | | Cautionary Tale I’m not saying today’s situation is identical to the 1970s. But it’s a cautionary tale about what can happen to a complacent market in the face of an economic shock. And don’t count on the Fed riding to the rescue this time. It’s preoccupied with the “transitory” inflation that’s somehow still around five years later. If it drops interest rates, it may cheer investors. But it could also stoke inflation, which continues to bubble away. And Fed boss Jerome Powell is in no hurry to run to Trump’s rescue following his chaotic tariff rollout. As far as he’s concerned, “Trump broke it, Trump owns it.” So, what do we do as investors in the face of all of this? How to Survive and Thrive in This Age of Chaos Remember that we’re living through an Age of Chaos. As I’ve been writing to you about since we launched The Freeport Society in December 2023, the 2020s are shaping up to be the most volatile, chaotic– and opportunity-filled decade of our lives. Trump didn’t start the chaos. We’re also facing a boggling rate of technological change… the breakdown of the postwar world order… and the triple threat of deficits, debt, and dollar debasement. But whatever he might be, Trump is not a calming influence. He’s the most disruptive president since FDR in the 1930s. My advice here has been consistent. You must own some gold. It’s a crisis hedge, an inflation hedge, and a dollar hedge. It’s also one of the few investments that’s still trending higher. We’ve been long gold at our flagship Freeport Investor advisory since the launch. We’re up about 55% so far. And I don’t plan on selling any time soon. You should also have a little more cash on hand than usual. In every bear market, fantastic opportunities present themselves along the way. There’s nothing wrong with selling down your positions if they’ve grown to become a disproportionately large piece of your net worth. But hold on to your core “forever” stocks. Quality companies will find a way to survive and thrive. Finally, rather than run from the volatility, learn to turn it to your advantage as a trader. Here’s Freeport Society cofounder–and the Chief Strategist at InvestorPlace, Brian Hunt… Volatile markets and times of crisis are great for traders because they create huge moves in the markets that play out over the short term. A move that might play out over 12 months in a calm market can play out over 12 days in a fast-moving, volatile market. In a calm market, you might see the stock market move 15% in 12 months. In a volatile market, you can see the stock market move 15% in 12 days. Instead of seeing the price of crude oil change by 20% over a period of two years, a volatile market can create a move of that size in two months. That brings up one of the most important lessons you can learn in times like these… and one of the true keys to market mastery. Back to Brian… Great traders and investors love volatility. In fact, I believe it’s a landmark moment in someone’s investment career when they realize that volatility can be harnessed… and can help you make a lot of money quickly. When that realization happens, a world of huge opportunities opens. If you know how to harness volatility and put it to work, you can make extraordinary returns in stocks. You can make returns in 10 months that most people wait 10 years to make. That’s what we’re doing in my trading service Freeport Alpha. With a little help from colleague and veteran trader Jonathan Rose, I recommended a short-term way to profit from a spike in volatility. And if it works out anything like the last trades he shared with us, I’ll be thrilled. We banked gains of 127% in a week on one and 111% in a month on another. It’s for subscribers only. But you can follow Jonathan – for free – every day at 11 a.m. ET for his Masters in Trading livestreams to hear more from him about how to turn volatility in profits. Jonathan has nearly 30 years’ experience as a professional trader… he’s tested dozens of different strategies… and he knows all about how to navigate high-volatility environments like the one we’re living through. So, I can’t think of a better guide. Follow this link to sign up. To life, liberty and the pursuit of wealth, |
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