November 7, 2019
Practically no one seems to have any real idea if the trade war is on or off… whether it’s hurting the U.S. or China more… or how to position their investments to protect themselves.
There’s so much uncertainty out there in the headlines right now. And investors typically hate uncertainty.
But there is a huge event about to take place in China’s stock market that is absolutely guaranteed…
And our American Consequences featured contributor and renowned financial analyst, Dr. Steve Sjuggerud, knows the exact day it will happen.
A study from the University of Pennsylvania Wharton School of Business looked into situations similar to this one. This academic study analyzed 444 occurrences from 1990 to 2015.
In every single case, the stock connected to this type of event went up.
You don’t see that kind of perfect track record often.
Here’s more from Steve on why this is such a sure bet…
Why You Should Be Watching This on November 27
By Dr. Steve Sjuggerud, financial analyst
This is by far the biggest investment opportunity I’ve seen.
I’m the only independent analyst I know of who can say they’ve been investigating this story since 2015…
The opportunity has to do with one of the greatest phenomena in modern finance… the rise of passive investing.
You may not realize it, but since 2005, investors have put increasingly more money into “passive” investments tied to an index… and less into “active” funds managed by banks and hedge funds.
During the second quarter of 2019, funds that track the U.S. stock market took in 60% more money than they did in 2018, according to data from Morningstar.
Take a look…
Passive investing is pretty straightforward. When you buy an exchange-traded fund (“ETF”) or an index fund, you are essentially buying fractional shares of all the stocks it contains.
So if you’re a passive investor who buys an index fund that tracks the benchmark S&P 500, for example, you’ll own fractional shares of all the companies that make up the index. But you’ll own more of Microsoft (MSFT), which has one of the highest weightings, and less of Under Armour (UA) which has one of the smaller weightings.
But here’s what most people don’t know…
Whenever a stock is added or removed from an index… the passive money that tracks that index is legally required to buy or sell that security at a specific date and time.
If you own an ETF or index fund, you likely never see this happening… but billions of dollars shift around behind the scenes.
And that creates a unique opportunity if you happen to know which stocks are being dropped, and which are being added…
That’s why I rushed to get this message out to you before November 27.
This is the exact situation that’s playing out right now, except with MUCH more money flowing into a group of stocks most investors are ignoring…
But you might be wondering… How I know all this?
And who gets to decide which companies are added to or dropped from an index?
Well, it’s not the SEC, the IMF, or the Federal Reserve, as you might expect…
It’s the under-the-radar financial firms who actually create the indexes that everyone else must follow.
And one of the biggest and most influential index firms is called MSCI. MSCI – or Morgan Stanley Capital International – is one of the most powerful financial groups on the planet.
A stunning $14.8 trillion – which is more than eight times the GDP of Texas – must be allocated according to MSCI’s decisions.
It’s like the firm can release a valve and flood any stock it chooses with cash.
That’s why 97 of the top 100 global investment managers listen to this group.
MSCI has been around for the past 45 years. And it currently controls 160,000 of the global indexes that mutual funds, pensions funds, and insurance firms must follow.
That means if you have a 401(k) or you own an ETF or a mutual fund… odds are MSCI impacts your money in a big way, whether you realize it or not.
The firm is probably the single biggest authority on Wall Street in deciding which stocks are added to or removed from world stock market indexes.
We know with as much certainty as possible that MSCI is making a major change to one of its largest indexes on November 27.
And all you have to do to potentially double or triple your money is get your money there FIRST… which means acting now.
Now here are some of the headlines we’re reading…
There’s an old saying about negotiations in American politics – when it seems like the two sides are farthest apart, they’ve never been closer together. That’s what appears to have happened here…
Both sides recognize that they are each holding an economic gun to the other’s head. Hence, despite the political posturing, both Trump and Xi ultimately want a deal.
Trump has little incentive to accept a deal that would be seen as a humiliation.
Available now wherever you get your podcasts – Apple, iHeart, Pluto TV – with Buck Sexton talking about the Mexican drug cartel and why it’s a problem for the U.S.
And let us know what you’re reading at [email protected].
Publisher, American Consequences
With P.J. O’Rourke and the Editorial Staff
November 7, 2019