Confidence Broken

Dear Wealth Watch Reader,

We’re on the home stretch now. Only a few days left before the New Year kicks off.

We hope you had a wonderful holiday… But now it’s time to get back to building your wealth.

Confidence is broken, and many folks are wondering how they can make the most out their money. Especially considering the current volatility that continues to plague the markets.

In times like we’re experiencing right now, it’s even more critical to pay attention to the relationship between 3-month Treasury bill yields and the S&P 500 dividend yield.

As it stands, the yield differential is beginning to get a lot larger.

In September, 3-month Treasury yields inched above the dividend yield of the S&P 500 for the first time in quite a while. Since then the yield gap has grown wider.

The yield differential will continue to increase too because inflation is now above the Fed’s 2% goal.

The core consumer price index — excluding volatile food and energy costs — increased 0.2% in the last month and 2.2% in the last year, according to the U.S. Labor Department.

This means higher short-term interest rates are in our future and the gap between T-bills and stock dividends will continue to grow.

What’s that mean for you?

First, steer clear of long-term bonds, which fall in value when interest rates rise.

Second, when it comes to stocks look for markets where dividend yields are higher than in the U.S.

Where’s that you ask?

Right now, almost every where in Asia other than Japan, and especially in beaten-down emerging markets.

As we head into 2019, volatility will continue as inflation rises and rate hikes keep coming.

My advice is to look outside the U.S. for the best money making opportunities.

Here’s to growing your wealth,

Mike Burnick

Mike Burnick
Chief Income Expert, Mike Burnick’s Wealth Watch

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Mike Burnick

Mike Burnick is the editor of Mike Burnick’s Wealth Watch, Infinite Income, Amplified Income and Millionaire Moments. Mike has been bringing his trading strategies to the masses for over 30 years. He has been with Seven Figure Publishing since 2017. In 2018, the average return of Infinite Income beat the...

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