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Where to Invest "Forever More" Andrew Snyder, Editorial Director, The Oxford Club
 There's a hot sector of the market every investor must know about.
You may have been too timid to invest in it previously. Put your fears aside... now's the time to make your move.
It's all about the idea of "forever more."
You've seen this theory in your own life. All of us want more. No matter our income, we aren't satisfied. There's always something we don't have.
It's why Warren Buffett still goes to work at age 85. He wants more.
It's the reason our spending rises in direct correlation with our income.
A perfect recent example comes from the oh-so-troubled American postal system. You may not know it, but the cost of a stamp will drop by $0.02 next month. It's the first time since 1919 that stamp prices will fall.
Your local post office hates the idea.
Sure, it's known the move was coming for more than two years. But it wants forever more. It got used to the extra cash.
Prices are falling because a congressionally approved subsidy is coming to an end. Implemented in 2014 as a temporary fix to the mail system's financial woes, the plan has added an extra $4.6 billion to the Postal Service's coffers.
Of course, all that extra cash wasn't enough. It never is.
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"The exigent surcharge granted to the Postal Service [in 2014] only partially alleviated our extreme multiyear revenue declines resulting from the Great Recession, which exceeded $7 billion in 2009 alone," whined Postmaster General Megan Brennan. "Removing the surcharge and reducing our prices is an irrational outcome considering the Postal Service's precarious financial condition."
"Forever more" strikes again.
Give me more... I'll spend more.
For investors, this dangerous human trait can be a blessing. If you've followed "All of us want more. No matter our income, we aren't satisfied. There's always something we don't have.
It's why Warren Buffett still goes to work at age 85. He wants more.
It's the reason our spending rises in direct correlation with our income. " | |
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the conundrum the world's monetary maestros are dealing with, you know what I mean.
No matter how much free money they print... the economy wants more.
The ECB shook European markets this week when it opened its free money spigot yet a bit more. It slashed its benchmark rate to 0%, cut its bank deposit rate to minus 0.4%... and boosted its quantitative easing program to 80 billion euros per month.
Forever more...
What's entirely new, though, is the central bank will now be able to use the money it prints to not only buy government debt... but also buy corporate debt. If the free market won't get money flowing, Draghi and his pals will do it themselves.
The long-term ramifications are entirely unknown. But history tells us there isn't an ice cream sundae at the end of this journey.
In the short term, however, we're crazy not to take advantage of what's happening. European stocks saw a strong jolt higher after Draghi's big news... and the party is likely to continue.
After all... forever more.
Central banks across the planet are in a trap. Just as the post office can't survive on the same amount of cash it did just two years ago (despite zero inflation) international markets can't survive without a monetary maestro upping the tempo.
If you follow The Oxford Club's proprietary asset allocation model, you know we call for 30% of your portfolio to be in foreign stocks.
I'm willing to bet you're nowhere close to that figure.
Now's your chance. European stocks are at a two-year low and are poised to surge higher thanks to Draghi bowing to the idea of forever more.
The popular Vanguard FTSE Europe ETF (NYSE: VGK) is a smart way to gain exposure. With an expense ratio of just 0.12%, this fund lives up to the dirt-cheap reputation that makes Vanguard funds a go-to for smart investors.
The great thing about economics - and the reason I've spent my life studying the realm - is that it's about far more than dollars and cents. Boiled down, it's about understanding the human decision-making process. It's as much psychology as it is math.
One of the simplest, most reliable aspects of our behavior is that we always want more.
We'll take more food over less... two dollars over one... and a $0.49 stamp over a $0.47 stamp.
It's this same innate trait that's driving the world's economy. Nobody wants the pain that will come with less stimulus. We want more wealth, not less... no matter the long-term cost.
The printing will continue. Forever more.
It's an opportunity we can't deny. Our bull market will live on. European stocks are about to get hot.
Good investing,
Andrew
P.S. Want to escape a life of "forever more"? It's tough. But it's incredibly liberating. I know because I've done it. Read about my theory of the broken bowl and how it can lead to your own financial liberty here.
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