Don’t look now, but the stock market’s worst-ever start to a year is getting even worse. The bear is growling and the key questions now are: How long will it last, AND especially, how do I make money in this turbulent market?
The S&P 500 Index is now down over 9.9% year to date and we’re not even at the end of January. At this point, the bulls will have to pull off a Hail-Mary pass worthy of Aaron Rodgers to finish in positive territory. This means a bearish reading for the January Barometer is looking more and more like a sure thing.
In fact, if you look at the global stock market landscape, it’s pretty clear we’re already in a bear market, which is defined as a decline of 20% or more from the last high.
While the S&P 500 Index is “only” down 12.1% from its 52-week high, the median decline among 34 major global stock market indices is 21.2%, according to research from Pension Partners. If you think the relentless stock market sell-off here at home has been bad, just be glad you’re not investing in China’s Shanghai stock market or Saudi Arabian shares … which are both down over 40% from their respective highs.
Domestic stocks may not technically be in a bear market just yet, but if you leave the capitalization-weighted S&P 500 (and the price-weighted Dow) out of the equation, other domestic stock market gauges have already receded to that mark.
For instance, the Russell 2000 Index of small-cap stocks is already down 25%, while the Dow Jones Transportation Index has plunged over 30%. Dow Theory sell signal anyone? Yes, it will be, IF the Dow Industrials can’t hold above the August low of 15,370, and we’re getting very close!
HUGE Investment Opportunities!
The International Energy Agency (IEA) just announced that demand is about to rise a whopping 1.1 million barrels per day, a 57% surge over last year! That will soon drive energy stocks like these into the stratosphere. Don’t miss the greatest oil and energy fire sale in 30 years! Click here to for more information!
Remember both the S&P 500 and Dow have been buoyed by a handful of larger cap blue chip shares that have not fallen as much as the rank-and-file stocks. In fact, the average large-cap stock is already down 24.7%, according to research from Raymond James, while the average small-cap stock is down a whopping 37.6%! That’s bear market territory to be sure.
Other financial markets aren’t faring much better. Bond markets are a mess, with high yield credit getting crushed. And most commodities continue to wallow in a bear market too, with copper down 6.3% this year, palladium plunging 13.7% and crude oil crashing another 24.8% year to date!
There’s nowhere to run and nowhere to hide, but there are some markets making money for investors in 2016. Case in point: Currency markets!
|Currency markets are making money for investors in these turbulent times.|
For instance, the Japanese yen has gained 3% against the U.S. dollar already this year. Now that may not sound like much of a gain, but with the leveraged profit potential afforded by forex markets, that’s a monster move that could hand savvy currency investors big profits.
In fact, positioning yourself on the right side of this move with a mini-lot of only 10,000 dollar/yen (USD/JPY) takes an initial investment of only $200. And a move of just 3% higher in the yen, as we’ve seen already this year, could have handed you profits of $310 on this single currency trade; a 150% gain on your initial investment!
And it’s not just the yen that’s been a money-maker already this year.
The Australian dollar has fallen 6% against the buck this year, and the Canadian dollar has declined every single day in 2016, the longest downtrend since 1971. Meanwhile, Russia’s ruble and Mexico’s peso have fallen to record lows.
This shows you that currency markets tend to move in sweeping sustainable trends, both up and down. And that gives you more consistent money-making opportunities in currencies, compared to the up-and-down volatility in stocks. With global economies under increasing stress, currency markets are red-hot right now and may just be the ideal investment for this environment.
That’s because currencies always trade in pairs such as yen/U.S. dollar or euro/yen. This means that, unlike stocks, currencies don’t all move up and down together. And for every currency winner there’s a loser making it easier to profit from being on the right side of the trend. Plus, currency markets trade 24-hours a day and are the world’s largest investment market with more than $5 trillion in daily transactions.
Bottom line: Currency trading provides a way for you to diversify your investment mix and take advantage of macro-economic profit opportunities anywhere in the world no matter what’s happening to global stock, bond, or commodity markets.
And in these turbulent times, currency investing may be the best game in town.
P.S. Is your portfolio taking a massive hit in the current stock market? Most everybody’s is. However, my friends Kathy Lien and Boris Schlossberg have agreed to sit down with me on Monday, January 25th to discuss the best ways to make money, given the current market.
This could prove to be an incredibly important briefing for 2016. Please make sure to mark your calendar and click here to join on Monday!