Today’s letter is the result of more than two years of research, analysis, and on-the-ground due diligence in the U.S. and abroad. It encapsulates the ideas and the strategies that I would be telling to any person, as to how to self-assess their situation and take it to the highest level.

For one, the bull market in stocks, which has delivered big returns for nearly a decade, is nearing the end, in essence. I can smell it. The indicators show it, but before it tops-off, Wealth Research Group is still LONG the index because we anticipate a remarkable rally to finish this cycle, leaving a good taste in our mouths, as these rallies always do, before they pivot the other way.

One of the factors that investors, worldwide, like to cite as a reason to be bearish is because “Smart Money,” the hedge-fund managers, is bearish right now.

However, one look at the Smart Money Index and you’ll immediately notice that managed money continues to suck money from clients, yet produce horrendous yields.

Courtesy: Zerohedge.com

Right now, smart money flows are telling us that there is absolutely NO reason to panic because they are insanely bearish themselves, similar to their behavior in 2009, right about the time that they should have been BUYING big.They were insanely bullish and buying shares, hands over fist, at the top of the Dot.Com bubble and have lagged the market throughout this bull market. Don’t get emotional, when you are told that hedge-funds are scared – get excited.

So, for one thing, any talk of market tops is premature, as they’ve been since 2010, when the term “Double-Dip Recession” was so popular.

Right now, the majority of America’s best businesses are doing extraordinarily well, so much so that they almost have nowhere to go but down. This is the reason we get recessions, but not before we blow-off some steam, allowing euphoria to kick-in and the bull market to end as all of them do, with media coverage, with stories of rags to riches day-trading scenarios, and, finally, with lots of speculators getting hurt.

What comes after the bust, though? This is one of the most important questions to ask.

Once the market experiences its predictable sell-off, going down 20%-40%, as it just might, we must think about the day after. With higher real interest rates, with a massive budget deficit that will shrink for nothing (not for recessions and not in peaceful times), and with the continued aging and retirement stampede of the Baby Boomers, sellers in the next cycle will likely not demand 20+ P/E ratios to fork over their stocks, as they have been for the past 4 years.

Take a look:

Courtesy: Zerohedge.com

According to the way the Federal Reserve views future returns for stocks, we are in for a long sideways market, even a bear market.So, in light of this, and I totally agree with this assessment, the alternative investments classes will go nuts soon. I’m talking about, first and foremost, commodities, which have been hellish investments for several years, as the market kept defying gravity, climbing no matter what the economy was doing.

Secondly, the cannabis legalization will keep delivering monstrous gains.

Now that Jeff Sessions is out of the way and with three new states legalizing during the midterm ballots, Michigan, Utah, and Missouri, a cool 80 million Americans can consume all sorts of cannabis products. In the big picture, that is only a quarter of the population, so we haven’t seen anything yet, even though 33 states have approved medical use already.

But, investments are not enough. Most people can hardly afford to save a substantial sum of money in North America today. High-paying jobs are scarce, so investment wealth will play 2^nd fiddle for the majority, as it did during this past decade.

Tens of millions do not participate in this bull market at all. For them, active income, creating multiple streams of income, means more than the direction of the markets.

BEATING THE WAGE PRISON

Best Regards,

Lior Gantz
President, WealthResearchGroup.com