Casey Daily Dispatch

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How These Tiny Stocks Soared 1,000%+ in Under 22 Months

By Chris Reilly, managing editor, Casey Daily Dispatch

“It’s the most profitable opportunity I know of – one where you can turn a small stake into millions.”

International Speculator editor Dave Forest said this during our second annual Legacy Investment Summit two weeks ago. He went on to reveal an urgent money-making opportunity in the mining sector.

I’ll tell you what it is in a second. And I’ll show you how you can capitalize today (including the three strange questions Dave asks before he evaluates any company).

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• But first, let me tell you why it pays to listen to Dave…

Dave’s our in-house geologist who’s spent his 20-year investing career searching for new discoveries and breakthroughs. He founded his own mineral exploration and development companies, raising over $80 million in equity financing from some of the most well-known resource investors in North America.

His work takes him to the remotest corners of the globe, from the heights of the Andes to the barren wastes of Mongolia, the Russian tundra, and even the deserts of the southwestern United States.

Here he is in action, surveying a mine in Nevada recently:

Dave (far left) in the underground kicking rocks

I’ve worked closely with Dave for the past two years. And I can tell you that his travel and expertise have paid off for his readers.

One of his copper mining picks is up 155% in just the past three months. One of his gold miners is up 181% since January 23 – and just struck a 52-week high. Another gold miner is up 116% in two years.

And this is just the beginning.

Why?

As regular readers know, Dave says we’re entering a commodities boom unlike anything he’s ever seen.

And one specific sector of the commodities market is primed to take off.

One of the top news anchors in America just went on-camera to expose a huge story. When word spreads about what she’s uncovered — it could trigger an equally huge move in the stock market.

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• I’m talking about junior miners…

These are small exploration companies on the hunt for the next discovery.

And this is where Dave says the most money will be made in the years to come.

Simply put, discoveries equal money.

Some of the quickest gains in mining investing come when tiny juniors make strikes in unexpected places.

But don’t just take my word for it.

• Take a look at some of these examples…

Dave and his team compiled a timeline of mining discoveries over the past 35 years.

Some of these companies took less than a year to go from penny stocks to billion-dollar buyouts. And many of them made billions in profits for shareholders – shooting up thousands of percentage points on the back of discoveries.

Take Diamond Fields, for example. Now a legendary tale in mining exploration, the company was pursuing diamonds in Africa, but held a few properties in Canada. And that’s where two geologists stumbled on one of the world’s biggest nickel deposits. A major miner stepped in to buy Diamond for C$4.5 billion.

This caused Diamond’s shares to soar 2,025% in less than a year.

Chart

Or take Aurelian Resources… The company saw potential in a part of Ecuador few others had looked at. The stock took off, and the company was bought just 30 months later by Kinross Gold for C$1.2 billion.

Aurelian Resources rocketed 1,230% in just seven months.

Chart

Or how about Virginia Mines, which soared 1,260% in under 22 months thanks to its high-grade gold discovery in Quebec…

Chart

These are parabolic gains.

And now, Dave says we’re on the verge of the next round of discoveries…

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• That’s where Dave’s “three strange questions” come in…

During his presentation, Dave laid out three things to ask to help filter out the best mining stocks… ones on the verge of the next discovery.

These are the same questions that Dave asks to evaluate junior miners.

What’s the company’s origin story? How did it come to be where it is today? A company may have projects all over the world – but none are truly developed. They’re all scattered ideas. You want to find a targeted company, meaning one that’s laser-focused on one specific area.
How’s the road to the project? If the CEO hasn’t visited the project – if he doesn’t know the “road” – it’s a major red flag. You want the leaders of the company going out and getting their hands dirty… and knowing everything about the specific location of the project.
What’s in it for me? This one’s simple – and ties into No. 2. You want people on the team who are motivated. You want people who love what they’re doing. A company may have a great idea about a great spot to find gold. It often doesn’t work out. But if you’ve analyzed the people, and you’ve got a really good team, those people will keep coming up with good ideas.In short, you want a CEO who’s excited. Someone who wants to get out and look at all these ideas and walk up mountains and get scorched in the sun and chased by rattlesnakes.

• Dave says when you find all these things together, you’ve got yourself a winning stock…

…one with a true system for discovery that can create generational wealth for you.

If you’d like to profit off this next phase in discoveries, this is your chance.

You can gain exposure to the junior gold mining sector with shares of the VanEck Vectors Junior Gold Miners ETF (GDXJ), which holds a basket of junior gold miners. Like any fund, it has some of the top names – but it also has names that don’t pass Dave’s test.

Fortunately, that’s where Dave comes in. He knows how to filter out the “duds.” His portfolio has only the best names in the sector – ready to rip higher.

You can learn how to access Dave’s top picks, and all of his in-depth research in the mining space, right here.

Just remember, junior mining stocks are volatile. Never bet more money than you can afford to lose. And you can filter out the bad names if they don’t pass Dave’s three questions above.

What the Fed Is Telling Us to Buy Today

By Justin Spittler, editor, Casey Daily Dispatch

“Interest rates are too high.”

That might sound crazy to you…

After all, the yield on the 10-Year Treasury is just 2.7%. That’s less than half its historic average.

And don’t even get me started on savings accounts. They pay next to nothing these days…

But I’m not the one who thinks rates are too high. James B. Bullard is.

Bullard is the president of the Federal Reserve Bank of St. Louis. He’s also a voting member at the Federal Open Market Committee (FOMC), which sets monetary policy for the Federal Reserve.

Bullard had this to say about interest rates at the January FOMC meeting (the minutes were released yesterday)…

I actually think we’re a little bit tight here, a little bit too high with the rates… But I’m in a minority view compared to the committee.

Now, Bullard may claim that he’s alone in his thinking. But I don’t buy that.

After all, the Fed reversed course last month when it said it would be “patient” with raising interest rates.

Keep in mind, the Fed was in the process of “tightening” its monetary policy until it issued this statement. It had raised its key interest rate nine times since the end of 2015. It also talked about hiking the key interest rate two more times in 2019.

But that clearly isn’t happening anymore. And there’s an obvious reason why…

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The U.S. stock market looks fragile…

In fact, the S&P 500 just had its worst December since the Great Depression.

This led the Fed to do an “about-face.”

Of course, the Fed didn’t admit this at the time. Instead it said Brexit, the global economic slowdown, and the trade war were why it paused raising rates.

But anyone who’s been following the markets closely could see through this…

Even Bullard now admits that the December sell-off spooked the Fed. He had this to say at January’s FOMC meeting…

I thought at the December meeting, myself I thought it was a step too far. I argued against that move…We did get a bad reaction in financial markets. I think the market started to think we were too hawkish, might cause a recession.

This isn’t the sign of a healthy market.

It’s the sign of a market that’s hooked on easy money.

Ever since the Fed lowered interest rates to near zero after the 2008 financial crisis, the market’s been used to buying stocks on cheap, borrowed money. We at Casey Research think it’s what caused the bull market of the last decade… And what’ll soon bring it crashing down.

Still, it’s clear the Fed has the stock market’s back now. And that has huge implications for stocks.

It could even set up a huge opportunity for a special kind of stock. I’ll get to what that is in just a minute.

But let’s first look at how the Fed’s dovish tone is impacting the world’s most important financial asset…

I’m talking about the U.S. dollar…

Now, regular readers know that the U.S. dollar had a huge rally last year.

It appreciated 10% against a basket of major currencies between February and December.

That’s a huge move for a major currency. But that rally came to a standstill recently.

And that’s because the U.S. dollar is no longer the best place to park money. That, again, is because the Fed is putting its rates on hold, which makes the dollar less attractive relative to other major currencies.

In short, the change in the Fed’s tone is bad for the dollar.

The market is already “pricing in” a weaker dollar…

Just look at this chart.

It shows the performance of the U.S. Dollar Index (DXY) since the start of 2017. This index tracks the dollar’s performance against major currencies like the Japanese yen and the euro.

You can see DXY has been bumping up against resistance at around 97. This suggests that the dollar will stop appreciating. It could roll over any day now… and head much lower.

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I’m not the only Casey analyst betting on a weak dollar, either…

Strategic Investor editor E.B. Tucker says the dollar is “on the cusp of another plunge.” And that’s because the dollar hasn’t set a new high in years.

This is bad news for everyday Americans, especially globetrotting ones like myself. It means the money in our wallets won’t go as far.

But this is very bullish for commodities.

You see, most commodities are priced in U.S. dollars. So they tend to have an inverse relationship with the dollar.

You can clearly see this below. The green line on this chart represents the U.S. Dollar Index. The black line tracks the Invesco DB Commodity Index Tracking Fund (DBC). You can see that commodity prices tend to zig when the dollar zags.

Now the question is, “What commodity should we speculate on?”

After all, many commodities could skyrocket, should the dollar significantly weaken…

But I think gold will emerge as the biggest winner…

Think about it. Gold is a hedge against financial chaos. Investors buy it when they’re nervous about the economy or the stock market.

And the Fed basically came out and said that the market and economy could topple if the easy money stops flowing.

In short, gold stands to benefit from a weak dollar and growing demand for safe havens.

That’s very bullish for gold stocks…

That’s because gold stocks are leveraged to the price of gold. So gold doesn’t have to jump much for their shares to soar.

And we’re seeing this play out before our eyes…

Just look at this chart. It shows the performance of the VanEck Vectors Gold Miners ETF (GDX) – which invests in a basket of gold stocks – since the stock market peaked in September 2018.

You can see GDX is up 33% since then. The S&P 500 is down 4% over the same period.

But don’t worry if you haven’t bought any gold stocks yet…

E.B. says gold stocks are just getting warmed up…

He would know, too.

E.B. sits on the board of a publicly traded gold royalty company. He’s a true industry insider.

I got E.B. on the phone earlier this week to hear what he’s seeing from the front lines. Here’s what he had to say:

A lot of positive things are happening in the gold space right now. But I need to clarify what I mean by “positive.”

To me, it’s positive when bad things are happening. These things often signal that the market is about to turn, that the situation’s about to improve.

In that sense, we’re seeing a lot of positive developments in the gold mining space. For one, things have gotten so bad in the space that six of the 10 biggest mining operations have combined with each other, and not at steep premiums.

Pan American – a great silver-mining company – recently took over another very large, struggling, silver-mining company called Tahoe. And Newmont, of course, merged with Goldcorp. And Barrick also had a large acquisition last fall.

In other words, this wave of mergers could mean gold’s about to turn the corner…

So consider speculating on gold stocks if you haven’t yet…

You can easily do this with GDX. This fund invests in a basket of gold mining stocks. That makes it a relatively safe way to profit from a rally in gold.

Just remember that gold stocks are highly volatile. Treat them like a speculation.

Only bet money that you can afford to lose. Take profits when they come. And don’t be afraid to cut your losses should the gold market reverse direction.

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Editor’s note: E.B. is famous around Casey Research for his track record of nailing big calls…

He still makes a 20% passive income stream from the moves he made right after the 2008 housing crisis. And last year, he strategically avoided Bitcoin’s collapse… while making a 15,000% profit on a blockchain mining deal.

In short, E.B. knows how to spot trends… and make the right moves to book huge profits.

Next Wednesday, February 27 at 8 p.m. ET, E.B. will hold a special presentation he’s calling The Stock Market Escape Summit. There you’ll learn all about his top investing strategies for 2019… how he knows when it’s time to be a contrarian… and about a little-known type of investment that generates 10x more money than options – with lower risk.

This Key U.S. Industry Is Flashing Danger

By Justin Spittler, editor, Casey Daily Dispatch

A key U.S. industry is sending us a warning.

And it could spell serious trouble ahead for the economy at large.

The good news is that there’s still time to protect yourself. I’ll show you how to do that at the end of today’s essay.

But let’s first turn our attention to the struggling industry.

I’m talking about the auto industry…

Specifically, let’s look at vehicle inventories… which are swelling across the nation right now.

We’re seeing this firsthand near Casey Research’s headquarters in South Florida.

In fact, Casey Research analyst Houston Molnar tells me that he sees this issue every day. Dealership lots are overflowing with unsold cars.

One dealership even started storing vehicles on an undeveloped plot of land across the street, after it ran out of parking space. Another dealership is moving its inventory to the nearby grocery store parking lot.

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But this isn’t just happening in South Florida…

According to Bloomberg, the average new car spends 73 days in a dealership’s lot before being sold. That’s up from 67 days in June.

And experts expect this figure to reach 78 days when data for December 2018 is available. That would represent a 16% increase in just six months.

There’s a good chance that happens. I say this because, according to the Federation of Automobile Dealers Association, passenger vehicle inventory jumped nearly 34% from December 2018 to January 2019.

Not only that, Ford’s total sales are down 28% over the past year. Hyundai’s are down 21%, while Toyota’s and Nissan’s are down 3% and 2%, respectively.

Of course, there’s a reason why dealerships across the nation are struggling to move inventory…

It’s getting more expensive to buy a vehicle…

And that’s because interest rates are rising…

In December, the Federal Reserve lifted its key interest rate for the fourth time in 2018… and the sixth time since the start of 2017. This benchmark is now sitting at its highest level since April 2008.

This is a big deal. The Fed’s key interest rate sets the tone for rates across the economy. The Fed effectively made it more expensive to finance a new car.

According to Edmunds, last month the average annual interest rate on a new vehicle sat at 6.19%. That’s up from 4.99% a year ago. It’s also the second-highest rate in a decade.

Now, I know a 1.2% jump might not sound like much. But a single percentage point makes a huge difference on big-ticket items like cars.

Not only that, the number of buyers getting 0% interest rate loans has also fallen to the lowest level since 2006.

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The auto industry can’t afford for this to continue…

The chart below says it all. You’re looking at how much total outstanding auto loans have grown since 2009.

You can see that it’s surged 65% since 2010. The median U.S. household income is up just 26% over the same period.

So a healthier consumer hasn’t been fueling auto sales. Cheap debt has. And if it goes away, the auto industry could run into serious problems.

And we see danger ahead even if the Fed stops raising rates…

Which looks to be the case.

In fact, the Fed could even cut rates if the U.S. economy peters out.

But that wouldn’t stop the auto industry from falling on hard times.

That’s because the Fed doesn’t control every interest rate. It merely sets the tone.

Borrowing costs could keep rising even if the Fed stops raising rates or even cuts rates again… especially if we see a major uptick in delinquencies or defaults.

But higher borrowing costs isn’t the only major headwind facing the auto industry.

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The U.S. economy appears to be slowing…

Just look at what’s happening with the housing market. Strategic Investoreditor E.B. Tucker weighs in:

Annual pending home sales collapsed 2.2% in December. That’s the twelfth straight month of annual declines. It’s also the biggest annual drop in five years. What’s worse, the National Association of Realtors (NAR) is expecting existing home sales to decline again in 2019. That would mark the first back-to-back decline in home sales since the financial crisis.

This isn’t a coincidence. Like the auto industry, the housing market relies heavily on cheap credit. That means it, too, could be in serious trouble if rates keep climbing.

So consider cutting exposure to the auto and housing industries if you haven’t yet…

These industries could get hit if rates keep rising… or the economy slips into recession.

Five Ways to Profit From the Falling Dollar

By Justin Spittler, editor, Casey Daily Dispatch

The U.S. dollar (USD) is on thin ice.

I say this because it’s close to “rolling over.”

See for yourself. This chart shows the performance of the U.S. Dollar Index since the start of 2017. This index tracks the dollar’s performance against major currencies like the Japanese yen and the euro.

Notice how the dollar stopped rallying in November… lost momentum… and has since fallen 1.5%.

That’s not a huge decline. But the dollar now looks like it could roll over any day now, and head much lower.

In a minute, I’ll show you why… Then, I’ll share four ways to profit from a weaker dollar. And Strategic Investor editor E.B. Tucker will show you a bonus way to profit in today’s Chart of the Day.

But first, let’s look at why the dollar is set to fall further from here.

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The Federal Reserve just did an “about-face”…

It’s going to put its plan to raise rates on hold.

You see, the Fed has raised its key interest rate nine times since the end of 2015. It also talked about hiking the key interest rate two more times in 2019. But it’s clear that’s not going to happen anymore.

I say this because Fed Chair Jerome Powell said last Wednesday that, “the case for raising rates has weakened somewhat.” The “official” reason is because of Brexit, the global economic slowdown, and the trade war.

But you don’t have to work on Wall Street to realize that Powell only delivered this message after U.S. stocks sold off – hard.

In other words, the Fed appears to be backpedaling because it knows the U.S. stock market is addicted to cheap money… and it doesn’t want to take away the punch bowl.

In short, this is a huge deal… and one with bearish implications for the U.S. dollar.

You see, money goes where it’s treated best…

In other words, investors park money where they can earn the best returns with the least amount of risk.

When the Fed was raising rates, the dollar looked like the best place for big investors to park money. But that’s not the case now that the Fed has changed its tone. Other currencies like the euro now look attractive.

Unless the Fed changes its tone again, expect the dollar to keep weakening.

That’s not the only reason to expect the dollar to keep falling in the short term…

Just look at this chart of the euro, the official currency of the European Union.

Notice how the euro fell relative to the dollar practically all of last year. But that sell-off lost steam in November. Since then, the euro has been “carving out a bottom” relative to the dollar.

An asset carves out a bottom when it stops falling, trades in a tight range for a period of time, and then starts moving higher. This signals that buyers have stepped in and given the asset’s price a “floor.” It’s a major clue that the asset is ready to climb higher.

In short, the euro’s doing the exact opposite of what the U.S. Dollar Index is doing. It looks like it’s gearing up for a big rally.

Just to be clear, I realize that the euro is a structurally flawed currency. It has major problems that will eventually lead to its own demise. But that doesn’t mean that it won’t outperform the dollar over the next few months.

And we can profit from this trend…

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It’s setting up a great opportunity for speculators…

There are multiple ways you can profit from a weaker dollar…

You can do the “obvious” by 1) shorting the U.S. dollar or 2) getting long the euro in the short term. But there are two more ways that offer more upside…

3) You can bet on emerging markets (EMs). Emerging markets are countries that are on their way to being developed countries like the United States and Germany. China and India are the two biggest emerging markets.

As I explained in the January 17 Dispatch, a weaker dollar would make it easier for many EMs to finance their debts. And that would be good for EM stocks.

Since writing that essay, the iShares MSCI Emerging Markets ETF (EEM) (which tracks over 800 emerging market stocks) has jumped 5%. The S&P 500, for perspective, is up 3.8% over the same period. And that’s likely just a taste of what’s to come…

4) You can also bet on higher commodity prices. You see, most commodities are priced in U.S. dollars. Because of this, commodity prices generally have an inverse relationship with the dollar.

Just look at this chart. The green line represents the U.S. Dollar Index. The black line tracks the Invesco DB Commodity Index Tracking Fund (DBC). You can see the commodity prices tend to zig when the dollar zags.

In closing, a weaker dollar could be the spark that ignites the next big commodity rally.

To speculate on commodities, you can buy DBC or a similar fund. DBC is designed to track a basket of different commodities. That makes it an easy way to bet on higher commodity prices.

Just remember that commodities are highly speculative. So don’t bet more money than you can afford to lose. Have a risk-management strategy. Use stop losses. And take profits when they come.

These Cheap Stocks Are Gearing Up for a Huge Rally…

By Justin Spittler, editor, Casey Daily Dispatch

Practically every major asset ended last year in the red.

Large U.S. stocks… small U.S. stocks… foreign stocks… corporate bonds… You name it.

Investors would have been much better off holding cash or “cash substitutes,” as I showed you yesterday.

And there’s a good chance cash outperforms major indices like the S&P 500 and the Nasdaq.

But you’re probably not going to move all of your wealth into cash. And you shouldn’t. That would be just as reckless as being all-in on stocks.

So the question is…

What stocks should you own in this environment?

If you’ve been asking yourself this, you’re in luck.

That’s because a special kind of stock is poised to deliver huge returns this year… even if the market at large continues to sell off.

I’m talking about gold stocks…

Gold stocks include explorers, producers, refiners (or simply miners), and streaming companies, otherwise known as royalty companies.

These companies are leveraged to the price of gold. This means it doesn’t take a big move in gold for them to take off.

And that’s what we’re seeing today…

Gold stocks are rallying…

See for yourself. The chart below shows the performance of the VanEck Vectors Gold Miners ETF (GDX). This fund invests in a basket of gold mining stocks.

Chart

You can see GDX has rallied 20% since its low last September… courtesy of an 8% jump in the price of gold. For comparison, the S&P 500 fell 11% over the same period.

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In other words, gold stocks bucked the overall trend of the market. They’re rising when practically everything else is falling… and this should continue.

Take it from E.B. Tucker…

E.B. is the editor of Strategic Investor. He’s also one of our in-house experts on gold. And he’s bullish on the commodity today… Here’s where he sees the gold price heading in 2019…

We’ve seen three very big moves in the price of gold in the 21st century. That’s one roughly every six years.

We’re about due for the next one and it’s likely to be the biggest yet.

In fact, I think gold could eventually go back to $1,900 – and beyond.

But we’re not calling for that in 2019. This year, I believe the price of gold will hit $1,500 an ounce. It will be one of the best-performing markets in a very volatile year for equities.

Keep in mind, $1,500 is 17% higher than the current gold price… $1,900 is 27% higher.

A move like this would be massively bullish for gold stocks. After all, these stocks are leveraged to the price of gold. Gold stocks can run a mile when the price of gold moves an inch.

Of course, this begs the question… why would gold likely head much higher?

Well, there are many reasons. For one, gold is a safe-haven asset. It tends to do well when other assets, namely stocks, do poorly.

And U.S. stocks are likely headed much lower…

Regular readers know why I think this.

Right now, there are several key indicators flashing danger in the banking sector and credit markets.

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But there’s another indicator that’s signaling more trouble ahead…
Below is a chart of the S&P 500 going back to 1992. The three red lines represent the uptrends of the last three major bull markets.

Chart

Notice what happened the last two times that the S&P 500 pierced a multi-year uptrend.

The market crashed.

The first time, the S&P 500 plunged 49% from 2000 to 2002. The second time, the S&P 500 fell 57% between 2007 and 2009.

As you can see above – it recently broke an uptrend that’s been in place since early 2009.

As stocks fall, more people should flock to gold. This, in turn, will bode well for gold stocks.

But there’s also another reason you should consider speculating on gold stocks.

Gold stocks are downright cheap right now…

Specifically, they’re cheap relative to U.S. stocks.

You can see what I mean below. This chart shows the Gold Bugs Index (HUI) – an index that tracks gold stocks – relative to the S&P 500.

The lower this ratio, the cheaper gold stocks are relative to large U.S. stocks.

Chart

You can see that this key ratio is as low as it was in early 2001… just as gold was beginning a huge bull market.

In short, now is a good time to buy gold stocks…

You can easily do this with GDX. This fund will give you broad exposure to gold stocks. That makes it a relatively safe way to bet on higher gold prices.

Just understand that gold stocks can be highly volatile. Don’t bet more money than you can afford to lose. Use trailing stop losses. And take profits when they come.

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Why You Should Consider Investing in This “Cash Substitute” in 2019

By Justin Spittler, editor, Casey Daily Dispatch

Today, I’ll share one of the safest places to park your money in 2019.

This is more important than ever.

As regular readers know, there’s been almost nowhere to hide.

2018 was a bloodbath…

U.S. stocks got hammered. The S&P 500 fell 6.2% in 2018 – its worst performance since 2008.

And it wasn’t just one or two big sectors that got pummeled…

Eight of the 11 sectors that make up the S&P 500 closed the year in the red. Only healthcare, utilities, and consumer discretionary stocks posted positive returns.

Small U.S. stocks fared even worse. The Russell 2000 – an index that tracks the performance of 2,000 small-cap U.S. stocks – closed the year down 11%.

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It wasn’t just U.S. stocks that fell last year, either…

Other developed markets also took it on the chin.

Just look at this chart of the iShares MSCI EAFE ETF (EFA). This fund tracks the performance of stocks from developed markets, excluding the U.S. and Canada.

Chart

You can see that it plunged 14% last year. That’s its worst decline since 2008.

Emerging market stocks also tanked…

Emerging markets are countries on their way to becoming developed markets like the U.S., Japan, and Germany.

Last year, the iShares MSCI Emerging Markets ETF (EEM) – which tracks over 800 emerging market stocks – ended the year down 15%… its biggest decline since 2015.

Bonds weren’t spared in 2018, either…

The iShares iBoxx $ High Yield Corporate Bond ETF (HYG) ended the year down 2%. HYG invests in high-yield corporate bonds, or what most people call “junk bonds.”

Investment-grade bonds – or bonds issued to companies with sound credit – fared nearly as badly. The iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) ended last year down 1.6%.

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It was the same story with Treasuries…

You’d think they would have done well because they’re widely seen as “safe havens.” Because of that, many investors take refuge in Treasuries when stocks are falling.

But most Treasuries still ended the year down. Take the iShares 20+ Year Treasury Bond ETF (TLT), which holds long-dated Treasuries. It declined 1.6%.

By now, you get my point. Almost every major stock and bond category posted a negative return last year. The same is true for commodities, real estate investment trusts (REITS), and even gold, although gold finished the year strongly.

But not everything finished the year down. In fact, one “cash substitute” finished the year up 1.7%.

I’m talking about the SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL)…

BIL invests in Treasuries with one- to three-month durations. These are some of the safest securities in the world.

They’re considered safe places to park money because their short duration makes them very low-risk, low-return investments.

They’re so safe that institutions use BIL as a cash substitute.

Not only that, BIL paid a 1.7% dividend last year.

So if you’re looking for a place to park your wealth in 2019, consider moving some money to BIL…

It should preserve your wealth just like “real cash,” should stocks and bonds continue falling. Plus, you’ll earn some extra income, which you won’t get if you stick your money under your mattress or park it in most bank accounts.

These Key Indicators Are Flashing Danger – Here’s How to Prepare

By Justin Spittler, editor, Casey Daily Dispatch

So much for a New Year’s rally.

Yesterday, U.S. stocks stumbled out of the gate.

The S&P 500 opened down 1.2%. The Dow Jones Industrial Average (DJIA) opened 0.4% lower. And the Nasdaq began the year down 2.5%.

As the day wore on, the market recovered. All three major indices closed the day in the black, albeit barely.

But it’s been a different story today. As we go to press, the S&P 500 is down 2%. The DJIA is down 2.5%, and the Nasdaq is down 2.6%.

Those are huge one-day declines.

• This isn’t the start to the year investors were hoping for…

After all, the S&P 500 fell 6.2% last year. That’s the worst annual performance since 2008.

The S&P 500 is also coming off its worst December since 1931.

In short, investors were hoping for some relief. But the market’s likely headed even lower.

I don’t say this because of a hunch. I say this because several key indicators are flashing danger.

The good news is that there’s still time to protect your wealth. I’ll show you how to “get defensive” in a second.

But let’s look at the first bearish indicator: the banking sector…

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• Bank stocks are taking a beating…

Just look at this chart of the SPDR S&P Regional Banking ETF (KRE). This ETF invests in more than 100 regional banks.

You can see that it fell 20% in 2018.

That’s a problem, and not just for people who own regional bank stocks.

• Banks make loans to all sorts of businesses…

They’re highly exposed to the overall health of the economy.

Banks (and their shares) tend to do well when the economy is booming. When the economy starts to weaken, the opposite happens. Banks suffer because loans dry up and borrowers struggle to pay off their debts.

That’s why many smart people see bank stocks as a “canary in the coal mine” for the overall economy and stock market.

But here’s the thing. It’s not just small, regional banks that are hurting.

• Each of the major U.S. banks ended 2018 in the red…

I’m not talking about small declines, either.

Wells Fargo, Morgan Stanley, Citigroup, and Goldman Sachs all fell more than 20% last year. JPMorgan Chase fell 9%. And Bank of America tumbled 17% in 2018.

But it gets worse…

• European bank stocks are crashing, too…

HSBC – the U.K.’s biggest bank – fell 15% last year.

Banco Santander – Spain’s largest bank – fell 28%. Société Générale – one of France’s largest banks – is down 35%. And Deutsche Bank – Germany’s biggest bank – plummeted 56%.

This is clearly not good news for Europe.

And if Europe’s economy runs into serious trouble, those problems wouldn’t stay in a vacuum. They’ll spread around the world… and weigh on global stocks.

Unfortunately, the sharp sell-off in bank stocks isn’t the only reason for concern.

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• The credit market is signaling trouble, too…

The credit (or “bond”) market is one of the deepest, most liquid markets on the planet. The U.S. bond market, for one, is almost twice as big as the U.S. stock market.

The credit market is also dominated by big financial institutions. It’s where the big boys play.

Because of this, you often see trouble in the credit market before it appears in stocks.

And regular readers know that we’ve seen major weakness in the credit market lately. If you’re new to the Dispatch, you can catch up here and here.

But I didn’t write this essay to repeat what I’ve already said. I wrote it because the credit market continues to flash new danger.

• Investors are pulling money out of high-yield bonds at an alarming rate…

You can see what I mean below.

This chart shows how much money flowed into high-yield bond funds last year. High-yield (or “junk”) bonds are bonds issued to companies with poor credit.

They’re riskier than bonds issued to companies with good credit. So they pay higher interest rates.

You can see that investors pulled more than $60 billion out of junk bonds last year. That’s a record. It’s also twice as much money as investors pulled out of junk bonds in 2017.

This tells us that appetite for risky bonds is drying up. That doesn’t bode well for U.S. stocks.

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• I encourage you to take these warnings seriously…

Take precautions if you haven’t yet. Here are three ways you can do that today.

Hold extra cash. This will cushion you against big losses should stocks keep falling. It will also give you “dry powder” to buy stocks when the next major buying opportunities arise.
Own physical gold. As we often point out, gold is real money. It has preserved wealth for centuries because it’s a unique asset. It’s durable, easily divisible, and easy to transport.
It has also survived every major financial crisis in history. This makes it the ultimate safe-haven asset. Learn the best ways to buy and store it in our free special report: “The Gold Investor’s Guide.”

Read the “Ultimate Crisis Playbook.” We’ve compiled the best advice from all the editors and analysts from across our business. These are some of the brightest minds on the planet – and every entry is timely and extremely valuable for what lies ahead. With 109 pages full of tactical steps from our gurus, this market crash guide is designed not just to help you protect your wealth in the months ahead… but also to prosper. Download yours for free here.

Investors who do these things will sleep much better at night. They’ll also put themselves in a position to strike when the next big buying opportunity comes around.