Investors Profit From Political Turbulence & Market Uncertainty
- Hedge funds say stocks will drop 25% if Senator Elizabeth Warren is nominated for president.
- Remember, hedge funds warned of a market crash if Donald Trump won the election in 2016.
- One global markets index is up 21% this year … and it’s heading even higher.
In Chile, a hike in metro fares sparked riots.
In Lebanon, a tax on WhatsApp calls sent citizens to the streets.
A proposed extradition bill prompted protests in Hong Kong.
War is also in the headlines, with Turkey’s recent moves in Syria raising concerns about U.S. policy.
Russia is sending troops into Libya’s civil war. And Iran is restarting its nuclear program, raising the possibility of military action in that region.
Climate change is also in the news. It’s negative, as always.
Energy policy triggered riots in France and protests that shut down parts of London, England. It also affected election results in Canada and Australia.
Closer to home, energy policy is being blamed for fires in California.
The headlines aren’t limited to riots, war and climate change.
There’s also the 2020 election, which could lead to a large stock market sell-off, according to some analysts.
Looking at major news websites, I can’t find a single piece of good news. And that’s positive for stocks.
Making Sense of the News
The chart below shows the MSCI World Index — which represents large- and mid-cap equity performance across 23 developed markets — while the inset highlights its recent breakout to new highs.
Other global indexes show a similar pattern: Stocks are moving up.
Prices move up when companies make money and when investors are optimistic about the future.
Despite all the bad news, companies around the world are making money. Record earnings are being rewarded with record-high stock prices.
This shouldn’t be a surprise.
Traders like to say “bull markets climb a wall of worry” and “bear markets slide down a slope of hope.”
Or, as legendary investor Warren Buffett says: “Be fearful when others are greedy, and greedy when others are fearful.”
News Is Nearly 100% Negative
In today’s environment, current events are creating fear. There’s even speculation that things will get worse.
Hedge fund managers are predicting U.S. stocks will decline 25% if Senator Elizabeth Warren wins the Democratic nomination for president.
Remember, hedge fund managers warned of a market crash if Donald Trump won the election in 2016.
Their warnings built a wall of worry. The bull market climbed that wall to new highs.
The time to sell is when hope is widespread, as it was in early 2008.
That was also an election year, one marked by hope and change. It coincided with a bear market.
The good news is that hope is unlikely to appear in the news soon. That’s bullish.
Now is the time to buy.
You see, a market phenomenon I call “profit windows” proves that it’s possible to see consistent triple-digit gains in any environment.
They can be found in several of the market’s top stocks. And if you time them right, they can lead to tremendous gains.
I reveal all the secrets in my latest video here.
Editor, Peak Velocity Trader
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