The Melt Down is coming, my friend... Unfortunately, it will arrive this year.
Before you get bent out of shape with me for urging caution at the precise moment when things seem like they're getting really good, please keep this in mind...
I have been bullish – and right – on the stock market for nearly all of the last 12 years.
I am proud of that. But it's also why it pains me to tell you that the last 12 years of (mostly) good times for investors will likely end this year. (Nobody can know the future of course, but that is my prediction.)
I don't want to see that happen. But my years of experience tell me it's coming – and I want you to be ready.
Let me explain...
"Steve, why are you so sure the Melt Up will end in 2021?"
It's a fair question. The markets have been going up for years (with the exception of the COVID-19 crash a year ago). So why now? What makes this year different?
Your arguments are good ones:
- Stocks have been expensive for years and it hasn't mattered.
- The Federal Reserve has promised low interest rates for a while.
- The economy is recovering from COVID-19.
- The new Biden administration will most certainly spend a lot of money creating jobs and sending out stimulus checks.
You are right on those points, and more. Heck, they're some of the reasons I've said the good times would continue – and for longer than anyone imagined.
My basic premise all along has been this: The Fed will keep interest rates lower than people can imagine, for longer than people can imagine. And that will cause asset prices like stocks and real estate to soar higher than people can imagine.
Times are good right now, based on those points. But this is also the exact situation you tend to encounter before markets peak.
Specifically... Markets peak when there is nobody left to buy. That is all you need to know.
Unfortunately, we're getting close to that point right now. And that is exactly what makes this year different than previous years.
When music stars like Snoop Dogg and Gene Simmons (of the band KISS) are talking up cryptocurrency Dogecoin on their Twitter accounts, you know speculating is starting to get out of control.
I have personally gotten texts from rock stars... from pro surfers... and from my kids' friends... all wanting to get in on the game. None of them were interested in the markets a year ago. Heck, none of them were interested in stocks or investing just two months ago, at the start of this year.
The reality is, most of these folks are not looking to become students of the markets. Most aren't looking to study the competitive position and profit margins of Target versus Walmart, to determine which stock could outperform the other over the next five to seven years.
Instead, most of these folks are looking to make a quick buck on the next speculation.
This will end badly, my friend. And I expect the Melt Up to peak – and the Melt Down to begin – sometime in 2021. Ready yourself now.
Good investing,
Steve
P.S. I hope you took advantage of the longest bull market in history. And I hope you're sitting on substantial gains. But how you handle the Melt Down could be the most important event of your financial life... And believe me – it's coming. That's why I'm sharing the best way I know to navigate the end of the Melt Up... Get all the details right here.
Further Reading
When the Melt Down finally arrives, stock prices will come crashing down. And when that happens, you don't want to be left holding the bag. That's why you need to prepare yourself now and make sure you know what you'll do when it's time to sell... Read more here: What to Do When You Hit a Stop.
"Everyone you know will lose more on the way down than they made on the way up," Steve writes. The Melt Down will be brutal for a lot of investors. But losing everything while the market collapses doesn't have to happen to you... Get the full story here: How to Avoid the Harsh Reality of a Melt Down.
The Melt Down will arrive. And it when it does, you need to be prepared. So make sure you know how to survive – and even thrive – in the next few years...
THE E-COMMERCE TREND IS DRIVING THIS RETAILER TO TRIPLE-DIGIT GAINS
Today's chart shows a company that has adapted in the time of social distancing...
With the ongoing pandemic limiting in-person shopping, e-commerce is more popular than ever. It's convenient to purchase items from the comfort of your home – yet many brick-and-mortar retailers have struggled to change their tactics. Today's company has gotten on board the online-shopping trend...
CarMax (KMX) is the nation's leading used-car retailer. It boasts 220 stores across the country and has sold more than 9 million cars. With the pandemic cutting off foot traffic to the company's retail locations, CarMax rolled out a flexible online car-buying service nationwide... allowing customers to do as much (or as little) in-store as they want. This shift to e-commerce has helped CarMax thrive: In the third quarter, net earnings jumped roughly 36% year over year to more than $235 million.
As you can see, KMX shares are soaring... They're up more than 190% from last year's lows. And they just hit a fresh all-time high. As people continue to opt for the safety and convenience of online shopping, this company should perform well...
