Today’s special guest wrote about a “bear market in trust” in January.
The start of this year saw the reflation trade (as pumping of money into economies by governments boosted share prices) give way to fears about 1970s-style inflation (resulting in lower prices for many shares and bonds).
John Butler, editor of The Fleet Street Letter Monthly Alert, recognised that it was time for investors to make a major shift in their portfolios – as the market turned on stocks whose theoretical values were based on “intangible” assets such as new technology.
Today, we discuss how prophetic those words were.
Markets have been heading south since then. As John points out, staying in cash when inflation is at 9% is an “expensive way to time the market”. The way to “hide and ride it” is actually look for companies that: have tangible assets (think metals, chemicals and materials for example); are paying dividends; and can still turn a profit as the bear market dig its claws in.
John also markets a surprising prediction – that the Russian invasion of Ukraine may find a resolution sooner rather than later. Cue the relief rally, says John, which really is your chance to get out of those overvalued stocks while you still can.
But… don’t let me spoil it!
Watch the podcast below now to hear John’s thoughts.
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Until next time,
Contributing Editor, Fortune & Freedom