The No. 1 Thing Investors Should Do

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I’ll admit that I’m not much of a camper. Bugs, rain and sleeping on the ground are a few things that don’t make my list of items needed for a great vacation.

But for Red River Gorge in the middle of Kentucky, I’ll happily make an exception.

During my first trip to the Gorge, my brother — who had made several trips already — was quick to admonish, enjoy the scenery but always keep your eyes ahead of you when hiking. And NEVER wander away from camp at night.

On our first hike to see one of the many natural bridges that dot Red River Gorge and Daniel Boone National Park, I quickly discovered why he’d been so adamant. A sudden break in trees and a sharp bend in the path left me staring down hundreds of feet into tree tops and a meandering stream filled with massive boulders.

With my heart in my throat, I inched back from the edge to continue on to our destination, wiser and more aware of my surroundings.

But it doesn’t look as if the market is going to be as lucky, as traders stare down the abyss of a stock market collapse while waiting for the Fed to make its first move when it comes to interest rates. Now is the time to take action to prepare for the first drop … and for a possible stock market collapse.

The Future of U.S. Markets

As we head deeper into the second half of 2015 and we run out of meetings for Janet Yellen to finally announce the first interest-rate hike before the end of the year, I grabbed both Jeff Opdyke, Editor of Profit Seeker, and Chad Shoop, Editor of Pure Income, to ask them what their outlooks were for the next 12 months.

Chad: I see dismal returns for U.S. markets over the next 12 months, underperforming the rest of the globe. Basically, the U.S. market will generate flat returns over the next 12 months, with dividend-paying stocks outperforming within the U.S. mainly because of the dividends.

In this type of sideways market, Pure Income’s strategy works great. You are able to generate double-digit returns from stocks that go absolutely nowhere year after year. Pure Income uses strategies that see returns of 15% to 20% over 12 months while stocks are lower to flat.

Jocelynn: What is the biggest threat to the U.S. investor in the near future (next 12 months)?

Jeff: Rising interest rates … at some point. Rising rates could ripple through the stock market, since it implies rising costs of corporate borrowing as well as rising costs on consumers, which means consumers cannot spend as much or as freely on consumer stuff. Rising rates along with higher borrowing costs for business, means reduced profit margins, which flows through to reduced stock prices.

Avoid the Stock Market Collapse and Profit

With the U.S. market heading toward bleak returns in the face of the Fed’s plan to raise interest rates, it’s important that investors take steps now to not only protect their wealth but also find opportunities to continue to profit. I asked both Jeff and Chad what they believe is the No. 1 thing investors can do to protect themselves?

Jeff: It’s time to take some money off the table. Investors should sell some of the non-fundamental positions in their portfolio and pocket the cash … or put the cash to work in cheaper, developed markets in Europe and Asia.

Chad: Your best bet will be with unconventional income streams. Many of these are designed to withstand an economic downturn or stock market collapse better than broader markets. Pure Income is one way. High-dividend stocks, currency CDs and certain bond opportunities are a few others I have written about. These are the areas where you are forced to look to beat inflation and grow your wealth through income.

Jocelynn: What is the biggest opportunity you see over the next 12 months?

Jeff: Trading very expensive U.S. dollars for other currencies — most notably the Singapore dollar and the Norwegian krone. I’d even put some cash into the euro at this point. The European economy is faring better than the U.S. and that will flow through euro over the next year.

Chad: It’s in income. Stable, dividend-paying stocks are the one spot to invest in the U.S. over the next 12 months. REITs, MLPs and utilities will have a strong return in the next 12 months. They have all been punished over the past year as expectations over the Fed’s interest-rate hike creep closer, but once investors realize the Fed simply cannot raise rates by any meaningful amount for at least another decade, these are the segments of the market that will outperform.

You Don’t Have to Jump

The U.S. might be on the brink of a stock market collapse, but that doesn’t mean you have to follow all the other investors off the edge.

Between the Fed’s promise for higher interest rates, the slowdown in China and the recent Greek drama, many investors are frazzled and unsure of where to turn next to protect their gains and invest next.

That’s why we’ve pulled together some of the top wealth solutions experts from around the globe to present at this year’s Total Wealth Symposium in the Bahamas from October 14 through 17. Not only will you be able to get more investment advice from Jeff and Chad in person, but we have a schedule of more than 25 speakers who will provide unique insight on many little-known techniques for protecting and growing your assets.

If you been thinking about attending, the time to book is now! Our special early-bird pricing ends next week and the cost will go up. Click here to get full details and to reserve your seat before we sell out.

Jeff and Chad both agree that the U.S. is facing a stock market collapse, but there are safe ways to take advantage of a stock market collapse that allow you to protect your hard-earned gains and continue to rake in more profits. There’s no need to walk blindly off that cliff.

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Jocelynn Smith
Sr. Managing Editor, Sovereign Investor Daily