Never Fear a Bear Market Again

The markets are again flirting with all-time highs and many investors are understandably afraid that the bull market has just about run its course. Worse, they're selling out and heading for the sidelines, using even the slightest market drop as justification for their actions.

I can't think of a worse mistake, especially when you consider the alternative I'm about to share with you.

It's a Total Wealth Tactic that could turn every $10,000 invested into $252,600, and it's perfectly suited for today's complicated financial markets.

As always, I've got a few examples and stocks that can help you put what you learn today into action immediately.

How to Turn Three Decades of Losses into 2,426% Profits


Millions of investors lurch from investment to investment in a desperate search for the one stock that will turbocharge their returns. And, in doing so, they ruin their portfolios.

Stock selection, as it turns out, is only part of the mix.

If you want to earn the big bucks, you've got to make sure your money is working as consistently and efficiently as possible. What I mean by that is that you want to be making money with everything you own every day.

Profit Opportunity: This is your ticket to bigger and better returns... and it won't cost you a penny. What are you waiting for? Read more... 

If you're moving from stock to stock, you may as well be playing roulette. The principle of Gamblers Ruin will ultimately bleed your wealth dry.

When I say consistently and efficiently, I'm talking about putting something place that will keep your money moving through thick and thin, that will keep you tapped into upside, and will ensure that you're constantly buying low and selling high.

The first step in this process is identifying undervalued stocks.

We talk about that a lot because that's the first step on the path to profits. You find something that's beaten down, yet still has a fortress-like balance sheet, strong sales, and growing revenue, and you buy it because it's tapped into an Unstoppable Trend.

In fact, I've just discovered such a stock - it's nearly doubled its customer base in the past year, and on Nov. 1, it's expected to announce an estimated 325% earnings growth - an unheard of number that I believe will send their shares skyrocketing.

We're just a few weeks away from this trigger date, so click here to find out how you can get all the details.

The second step is to keep your money moving by reinvesting it. That way you can capture the powerful upside bias inherent in today's financial markets... even in flat or down markets.

It's a lot easier to do than most investors think.

Let me prove it to you.

Imagine buying 100 shares of ABC at $100/share for a $10,000 initial investment. And that ABC has a dividend yield of 2.05%, which is the average yield offered by companies on the S&P 500 today.

Now, imagine you resolved to re-invest those dividends, quarter after quarter.

A year down the road you would have earned slightly more than $205 back in dividends (it's slightly more than 2.05% because of the miniscule short-term effect of compounding quarterly rather than all at once, yearly). I know that doesn't sound very inspiring, but hang with me for a minute.

Coming into year two, you've got approximately $10,205 invested, and a 2.05% yield that translates to $10,414. Year three, $10,627. Year four brings $10,845 in capital working for you. By year five, dividend reinvestment would have allowed you to purchase $11,067 in company stock, totaling more than 11% in appreciation.

In the interest of simplicity, I've made two key assumptions...

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The stock stays completely flat, meaning that it doesn't get more expensive and result in your dividend payouts being able to buy fewer shares. And the company never raises its dividend.

Now, you and I both know that's not going to happen. The best companies (like those we follow at Total Wealth) raise their dividends constantly and the markets fluctuate, which means that your money is going to get more valuable over time... again, even if prices go down before they go up.

And that brings me to Lockheed Martin Corp. (NYSE: LMT).

The company is tapped into one of the biggest Unstoppable Trends of all: War, Terrorism, and Ugliness. What's more, its current 3.11% yield is almost 60% higher than our example, and management has a history of dramatically increasing payouts.

So let's re-run the numbers.


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Assuming the dividend increases by 10% annually and the stock remains flat, you'll have $14,231 in 10 years. That's a 42.31% return. It's not glamorous, but keep in mind that you would have earned $946 in dividends by year 10, which works out to an impressive 9.46% yield... just because you kept your money moving consistently and efficiently.

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In 30 years, you'd be sitting on $218,208 and a 118.2% return. Most impressively, though, you'd be earning an eye-popping $65,666 in dividends just for that year ($49,249 after a 25% capital gains tax) that amounts to a 392% return on your initial $10,000 investment!

dividend reinvestment
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Whenever I'm doing a presentation on this topic, it's usually right about now that the hands start going up... but what about a declining market?

Surely a stock that goes down by 5% each year for 30 years is a losing proposition regardless of the dividend, right?


Don't Miss: Stocks that pay dividends deliver triple the returns of nonpayers. And these "dividend kings" have boosted payouts 50 years in a row...

Believe it or not, when the price declines by 5% each year but the dividend payouts rise, you actually end up with more money than you'd have if the stock hadn't lost any value!

investing strategy
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In this scenario, a $10,000 initial investment transforms into a $252,600 holding - or a 2,426% gain.

If there's a bell ringing in the back of your head, this is why I constantly talk about managing upside, and why doing so is such an important part of the Total Wealth approach.

Selling out may feel good, but doing so takes you out of the game. Being able to purchase more income-generating shares, year after year, at cheaper prices clearly outweighs the downside of 5% losses on principle each year.

You see, missing out on upside is always the far more expensive proposition over time.

Keep in mind that we're talking about 2,462% returns in a 30-year bear market.

To be clear, I'm not forecasting a 30-year bear market at the moment. What I want you to understand is that bear markets always represent opportunity if you know what to look for...

...high-quality companies tapped into our Unstoppable Trends making must-have products and services that translate into rising revenue, rising earnings, and - ta da - rising dividends.

The financial crisis of 2007-2009 didn't stop high-quality companies like Altria Group Inc. (NYSE: MO) from raising its dividend payout by 17% during that time frame. It didn't stop Raytheon Co. (NYSE: RTN) from boosting its payouts 21%. And it didn't stop Lockheed Martin, which we used in our 30-year example, from hiking its payouts a stellar 80%.

The next crisis won't either.

All three companies are great choices under the circumstances.

The Ultimate Must-Have Investment: How You Can Profit from Nature's $500 Billion Ultimatum

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About the Author

Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.

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