Video Update: A Proven Strategy to Make Money for Decades

Even a broken clock is right twice a day…

That’s how some TV financial analysts and doomsday prophets manage to get a prediction right every now and then.

But when it comes to forecasting the market, it’s a dangerous game. In today’s video update, Chief Analyst Adam Galas shows you why trying to juice returns by getting in and out of stocks could end up costing you a fortune.

Instead, the strategy we follow at Fortress Portfolio has been proven to give you the best returns. It’s a simple one, so you may find it hard to believe. But he’ll lay out the cold, hard facts to show you exactly how.

Basing our investment strategy on those, we can get the best returns the market has to offer… and keep our income growing year after year, decade after decade.

Click the image below to watch the video or scroll down to read the transcript.

Happy SWAN (sleep well at night) investing,

Brad Thomas Editor, Fortress Portfolio

Welcome Fortress Portfolio members to another weekly video update.

Now, this week, I want to teach you some life changing money lessons that can help you become rich, stay rich while having fun, and even teach you some fascinating market history.

Now, I know that many of you might be wondering why I have been so bearish in recent weeks?

After all, I highlighted the risks of the Fed’s ten stealth rate hikes potentially coming.

And guess what? The bond market now says those hikes are coming.

I've discussed how the U.S. Treasury is doing $1.5 trillion in reverse money printing. That plan is also proceeding as expected.

I've explained how banks are expected to suffer $180 billion in loan losses in the coming months.

Half of that amount will affect regional banks, which means the regional banking industry will face about 1.5 years of industry losses packed into just six months.

I've also shared how all of this together means that… at some point in the next 9 to 12 months, stocks are likely to suffer around a 30% decline.

See the chart below.

(Source: Bloomberg, FactSet, DK S&P 500 Valuation Table)

Now, interestingly, stocks are now around 3% away from making new highs.

If that happens, the bear market of 2022 will officially end.

But the recession of 2024 likely bring with it a brand new bear market next year.

The fourth bear market in six years.

Now, for context, we average one bear market every six years historically.

But thanks to the pandemic, they might be occurring four times as frequently.

 As the Chinese curse says, “May you live in interesting times.”

Now, in the coming weeks, I will provide easy to understand explanations of what's happening with the economy so you can understand what to expect.

But today I wanted to present a very important message.

I want you to listen to my voice. Look at my face. Look into my eyes. Peer into my soul and tell me whether or not you see a crazed YouTube doomsday prophet who is crapping his pants in terror… and thinks you should be doing the same.

I am not Robert Kiyosaki.

I am not “Mr. Starvation is coming”, “Mr. God have mercy on us all”, “Mr. Sell everything you own and hide in a bunker with gold, guns, canned food.”

(Source: Dow Jones 20,000, Robert Kiyosaki & The Truth About Predictions)

And for some odd reason, Bitcoin… unless it was September of 2021, in which case Kyosaki was recommending selling everything and going into hiding with cash.

(Source: Twitter)

Now, what actually happened in October of 2021?

Does anybody remember? Well, I sure do.

Just take a look.

(Source: YCharts October 2021)

Gold was up 0.7%. The S&P was 6% higher. The NASDAQ 7%. Bitcoin up 41%.

Well, thank God, Mr. Kiyosaki was there to warn us about this impending mega crash in everything!

Now, look, the reason that these doomsday prophets are so popular on TV is because, like a broken clock, they are right twice a day.

And now let me explain how.

In September and October, stocks usually suck.

In fact, October happens to be the month that most markets frequently bottom 37% of the time.

It is the bear market killer.

So people like Kiyosaki can often say, “well, stocks are going to bottom in September or October.”

And then they say, “I nailed the bottom. Look at me, I'm a genius.”

Well, in 1907, the Bank Panic of 1907, stocks bottomed in October.

The Stock Market Crash of 1929 was also in October.

 Black Monday, 1987, the Dow fell 22% in a day. That was in October.

And September 15th, Lehman Brothers declared bankruptcy in 2008.

So you can see how there's plenty of history with these two months. And that these predictions are not coming from crystal balls, just pure market history.

But you might be wondering – why do stocks suck in September and October?

Well, you can blame the farmers for that one, specifically your Uncle Ben, the corn farmer in Iowa.

It's all his fault.

Now, I know you might be wondering, doesn’t Uncle Ben farm rice?

Well, to paraphrase Dr. McCoy from Star Trek, “Dammit, Jim, I'm a financial analyst, not a farmer.”

Besides, Uncle Ben is retired now, and it doesn't really matter.

Oh but it does.

The U.S. was an agrarian economy in the 19th century and early parts of the 20th into the 1930s.

That means everyone pretty much worked on farms. And farming was very labor intensive.

Farming was also seasonal. You plant in the spring. You harvest in the fall.

So in order to harvest their crops and feed their own families and the rest of the country, farmers had to go to their local banks and say in around September and October, “give me my money so I can hire people to harvest my crops.”

Now, the local banks kept their money at the big banks in New York, and those banks were the ones lending out on margin to the Wall Street traders and speculators.

This means that historically, because of harvest season, money would flow out of Wall Street in September and October.

And then when the farmers sold their crops and got paid, the money would reverse course and flow back into Wall Street.

And that's why stocks suck in September, but tend to bottom in October.

And if you've ever wondered where the old adage comes from, “Sell in May and go away. Return in October when you're sober.”

Well, now you know. Stocks tend to go up from November to May and tend to fall from June through October.

But what does this have to do with you?

Well, to hell with the permabears, you need to stay invested.

Take a look at this.

(Source: JPMorgan Asset Management)

The average American over the last 20 years has underperformed the S&P by 66%, and that's on an annualized basis.

What that actually means adjusted for inflation… is that over the last 20 years, the average investor is up 55%, while the S&P is up 445%.

That is essentially 5.5 times adjusted returns versus 1.55. That’s a 3.5 times difference if you just bought in held.

But most people can't do that.

That is what the Fortress Portfolio was built for, to give you the best hedges and high yield blue chips with market like returns or better and half the volatility.

So you can live on the income, sleep well at night when the market crashes, and not be tempted to time the market.

Now, let me show you one of the most important charts you will ever see. This is from Charlie Bilello, the King of FinTwit.

This is a guy who his charts are so important that almost everybody on Wall Street follows him on Twitter.

(Source: Charlie Bilello)

Now, as you can see, nobody can actually time the economy.

But if you could perfectly since 1930, then buying hold investing (outside of the Great Depression) still would have been the better choice.

In fact, 2% better returns than perfectly timing the economy because the stock market isn't the economy.

But you might be wondering, “Okay, okay, maybe the economy can't be timed, but somebody out there must have a way to time the stock market.”

I've seen many systems. Everybody out there says they've got some quantitative model.

But Nick Maggiulli, chief investment officer of Ritholtz Wealth Management, has run the numbers from 1970 to 2019.

If you could perfectly pick the exact bottom of the market every single year, and that's the only time you bought – compared to just buying on the first day of the year – the difference would be 22%.

So over 50 years, basically dollar cost averaging versus perfect market timing (nailing the bottom every time) for 50 straight years… The difference, would be 22%, not per year, 22% over 50 years.

And that's not counting taxes or commissions.

The stock market historically provides 10% annual returns.

That's over the last 20 years. The last 50 years. The last hundred years.

And according to BlackRock, over the last 217 years.

But that extra 22%… What it really means is that if you try to time the market, you are risking not turning $1 into $30 adjusted for inflation with the S&P if you timed it perfectly.

But dividend blue-chips that we recommend historically beat the market by 3% per year meaning that over 50 years they turn $1 into $117.

So this means that if you choose to market time rather than invest in dividend blue-chips over the long term, you risk not making $532.

Now, that $1 is not going to change your life. It's not going to be a better retirement. It's not going to be a nicer home. It's not going to send your grandkids to college.

But not making that $532… That could destroy your financial dreams.

Now, you might be wondering, “Okay. Okay, sure. In theory, all of this spreadsheet stuff makes perfect sense. But really, how dangerous a game can market timing be?”

Well, take a look at this chart from Bank of America.

Since 1930, the top ten single days of each decade, are 80% of the time within two weeks of the worst single days.

Basically, these are the returns in the bear markets themselves.

If you miss these days, then you miss 90 years of stock market returns.

And if you adjust for inflation, it's a 94% loss.

How many people can invest in the stock market and lose 94% of their portfolio?

This all from essentially missing just a handful of days, (less than a hundred over decades).

This is the kind of 90% Robert Kiyosaki doomsday scenario that people should really be worried about.

And this is exactly what we can help you avoid as a Fortress Portfolio member.

Next week I'll show you just a few of the amazing opportunities that you can find in this market.

Yes, it's crazy. I've been showing you for months how dangerous crazy it is.

But that doesn't mean that you can't be smart.

In order to be a stock market genius, all you have to do is not be an idiot.

(Source: Adam Galas)

And at Wide Moat Research and Fortress Portfolio, we strive to avoid idiocracy.

I want to thank you for joining us this week and remind you to please send in your questions and comments so I can respond to them in these videos and our monthly issues

Just remember, I can't provide personalized investment advice.

Until next week, this is Adam Galas, wishing you and your family safe investing, and a healthy and relaxing weekend.