Update - November 10, 2020

Dow 100K, Here We Come!

Dow 100K… here we come.

From the morning of the election to yesterday’s record highs, stocks have moved up by more than 8%.

That’s more than what we’d expect over the course of an average year. So should you cash in your gains (there are plenty in our portfolio) and sit out the next 12 months?

Far from it.

Keep an eye on the 10-year Treasury. It’s the fella who’s going to be the troublemaker in this mess.

The more it rises, the more chaos will ensue.

You see, it’s a fact that the Federal Reserve has pledged to keep interest rates near zero for at least the next 24 months. Yet thanks to the action of the past week, the 10-year has surged higher. It now sits at a level that we have not seen since early March.

The Fed will not like that.

Rising rates will slam borrowers just when they need some protection the most. Mortgage rates will rise… credit card rates will rise… and companies will borrow less.

The moves will force the Fed’s hand. It will need to dive deeper into the bond market and scoop up more debt… and it’ll need to print oodles more money to do it.

Eventually, that money printing will cause inflation. That inflation will do exactly what we saw this week… send stocks and interest rates surging higher. History tells us it will likely create a loop that few countries have ever managed to pull out of.

That’s why you don’t want to sell now. The sidelines are the worst place to be as this game heats up.

Must Own Stocks

We’re already seeing it. The gap between folks out of a job and the folks gainfully employed is stretching by the day. Home prices are rising… stock prices are surging… and the prices of the things we need to survive are on the rise.

It’s not a good time to be on the outside looking in.

Investing today isn’t about greed or building massive wealth… It’s about surviving and keeping up with rising prices.

That’s why I introduced our new Modern Asset Portfolio.

It gets us into the right assets to take advantage of this trend.

We got in Monero (XMR) just as the digital currency market heated up.

We got into buyback stocks like Logitech (LOGI) as plunging interest rates made buybacks an absolute no-brainer for companies flush with cash.

And we got in Fiserv (FISV) to take advantage of the trends kicked off by the death of cash and the rise of digital banking.

All are moving higher… quickly.

And while yesterday’s massive rotation out of COVID-19 stocks was interesting to watch, it won’t last. A vaccine – which is still surrounded by question marks – is at least a long winter away. It will likely be next summer until it is widely available.

That means the trends in place now are likely to remain through at least the next two earnings periods.

But – and this is very good news – hopes of a vaccine mean the stocks that have been held back in recent months are starting to make a climb higher.

We saw that yesterday with our infrastructure stalwart, KBR (KBR).

Shares shot up more than 8%…. taking our total gain to over 20%. That’s a huge move for a very conservative play. The stock will continue to surge higher as countries across the globe continue to stimulate their economies with freshly printed money.

The thing I want you to take away here is simple. The action yesterday and over the past week isn’t a sign of a trend reversal.

It’s just the opposite. It’s the heating up of an already red-hot trend.

If you’ve followed the advice I’ve sent you, you are ideally positioned to take advantage of it.

The Modern Asset Portfolio is proving its strength.

Best of all… we’re just getting started.

Dow 100K is coming.