| | | | | The winds have shifted on U.S. stock markets.
The tailwinds that took the S&P 500 to its second highest price-to-earnings multiple in 150 years have turned into headwinds.
Tighter money means less consumption and negative earnings growth. Higher interest rates mean every dollar of future earnings is worth less today. And less price stability resulting from high inflation makes the real value of those earnings less certain.
Now, these tailwinds alone would be enough to put equities in a deep bear market. Add in unprecedented geopolitical turmoil and that same bear market easily pencils out into full blown collapse.
But you don’t have to panic.
By at least acknowledging the potential of this scenario, you’ve taken the first step towards turning today’s bear market into your advantage.
Because then, rather than trying to call the bottom, buying dips, or obsessing over a 100-point rally in the S&P, you can focus on positioning your portfolio to profit from the next 1,000 points down…or more.
And, as I’m about to show you, I didn’t just pull those numbers out of thin air…
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