Video Update: Stay Calm and Retire Rich

Dear Reader,

Thank you for joining us at Fortress Portfolio!

As part of your membership, you get weekly video updates sent straight to your inbox.

In each short, jam-packed clip, Chief Analyst Adam Galas goes over what’s going in the market, anything urgent you need to know about our Fortress Portfolio holdings, and what his in-depth research indicates we’ll see ahead.

Having this full analysis will equip you to get the most out of your subscription, build your retirement portfolio, and be prepared for anything the stock market or economic conditions might throw at us.

With that said, I’ll hand things off to Adam. In his inaugural video, he’ll go over the key aspects of what makes Fortress Portfolio the best strategy for surviving and thriving even in market crashes… and being able to rest easily the whole time.

Again, we’re thrilled to have you.

Click here to watch your video update.

Welcome, Fortress members, to our first weekly video update.

These video updates aim to prepare you for what might be coming in the next few weeks and months.

Not so we can time the market; that's both impossible to do with consistency and completely unnecessary.

For example, according to Nick Maggiulli, chief data scientist for Ritholtz Wealth Management, since 1970, had you only bought stocks on the lowest day of the year – perfect market timing – you would have made an extra 22% compared to just buying stocks on the first day of the year.

Instead of 6,500% returns, you would have made 6,522%, an extra 0.5% per year. And that's with perfect market timing.

Or, to put it another way, trying to time the market is like risking not making $295 in order to make $296. That extra dollar isn't going to let you retire any richer.

It's not going to mean a nicer car, or a better school for your children or grandchildren.

It's not going to mean nicer vacations, or tastier restaurants.

It will make no difference at all. But do you know what might make a big difference to your financial dreams? Not making those 6,500% returns in the first place.

But of course, to achieve those long-term life-changing gains, first you need to survive years like 2022, when every popular investing strategy failed.

Bonds fell 13%... 10-year Treasurys fell 18%... a 60/40 retirement portfolio fell 16%. And those were just the end of year returns.

The peak declines were even more painful:

Your Fortress Portfolio fell about 50% less than the market during the worst inflation in 41 years, when global investors lost $30 trillion in a matter of months.

What's our secret? It's not market timing. It's a rock-solid dedication to safety and quality first, and prudent valuation and sound risk management always.

That includes not just 15 of the safest ultra-high-yield blue-chips, but also the best hedging strategy in history.

Bear Markets Returns

(Sources: Barclay, Soc Gen, DBMF, Charlie Bilello, Ycharts)

According to Duke University, over the last 40 years, the single best asset to own in a recession was long-duration U.S. bonds. These soared as much as 75% during the Great Recession when the S&P fell 58%, and even a 60/40 retirement portfolio fell 44% at its peak.

Managed futures are the second best recession hedge, averaging 37% gains during every bear market since 1980.

Regular investment-grade bonds and managed futures together have never failed in 42 years. That means they were always flat or increased in value when the stock market fell off a cliff.

In fact, this combination of bonds and managed futures, which is why we own Pimco's long bond ETF and managed futures ETF, averaged around 25% gains during bear markets, the mirror image of the S&P's -23%.

You see my friends, that is the secret to achieving your financial dreams even in a painful year like 2022.

Fortress is designed to deliver 6% safe yields, 10% to 11% market-like returns over time, but with 50% smaller declines, just like we did in 2022.

That's how you can enjoy great income today, grow fabulously rich tomorrow, and sleep like a baby no matter what is coming in 2023 or beyond.

Let me give you an example of the kind of realistic worst-case scenario that Fortress is prepared for and almost no other investors are.

In late December last year, China dropped its COVID-Zero policy and officially ended all restrictions by January 8, 2023. By the second quarter of the year, Chinese oil demand is expected to soar, by around 1.5 million barrels per day.

But right now. oil supply is razor tight. Low oil prices caused oil companies to underinvest in new production for nearly a decade. Even when oil went to $130 per barrel after Russia’s invasion of Ukraine, oil companies focused on maximizing profits, not increasing production.

What could an extra 1.5 million barrels per day in demand in such a tight oil market mean? According to analysts from Goldman Sachs to investment bank UBS, crude could go from $80 to $105 to $140 by mid-2023.

For context, U.S. oil peaked at around $130 after the Russian invasion. That caused U.S. gas prices to hit $5 per gallon, the highest level on record in 2022.

What if crude goes triple digits again? In that case, UBS, Deutsche Bank, and Wells Fargo have a dire forecast that investors can't ignore.

Is a 30% decline in stocks the most likely outcome?

S&P Blue-Chip Consensus Bear Market Scenarios

(Source: DK S&P Valuation Tool, Bloomberg Consensus)

No, historically speaking, the 2023 recession is likely to result in a roughly 10% to 20% decline to bottom.

But if we get a severe recession?

Then we very well could see the true stock market crash of -40%. Those are the kinds that you should historically expect every 50 years with the U.S. stock market.

Fortress Future Bear Market Probabilities

(Source: Portfolio Visualizer Premium)

But just once every 40,000 years with Fortress.

In other words, Fortress is designed to provide great safe income today, market-like returns over the long-term, and is as close to a "crashproof" portfolio as you can realistically own.

I hope you've enjoyed our inaugural weekly video update.

Next week, we'll examine what inflation is most likely to do in 2023 and beyond and what that means for Fortress Portfolio, and stock market in general.

This is Adam Galas, wishing you safe investing and a relaxing week.