By now, the holiday shopping is done (ahem, mostly), and we can look forward to all the end-of-year festivities, gift giving, and parties.
And the coming credit card bills.
Sorry, that sounds a little Scrooge-ish. But the truth is many of us feel a cash pinch after the holidays.
According to a recent Gallup poll, each American estimates spending an average of $975 on gifts this year. That’s the most since 1999, and more than 11% higher than last year.
Not having enough cash to pay those incoming bills is a problem.
Investors, on the other hand, face the exact opposite problem – too much cash.
I know it’s strange to think about too much cash being a problem, but it is.
It’s actually one of the biggest mistakes I see investors making heading into 2024 – being underinvested in stocks.
Not only do they miss moneymaking opportunities, but too much cash can actually cost you money.
Ironically, it may also be the biggest catalyst that keeps stocks running into the new year.
Most people think of cash as the safest form of investing. And in a sense, it is. If you had put $3,000 into a shoebox in 1940, you could pull that box off the shelf today and you would still have that $3,000.
Here’s the problem: Adjusted for inflation, that $3,000 should be worth nearly $65,000. That’s already a huge loss.
And now the really painful realization: If you had invested that $3,000 into the S&P 500 in 1940, it would be worth more than $18 million today.
Understanding this as we head into 2024 is more important than ever because we are in the late stages of what I call America’s first-ever “cash bubble.” And unlike when most bubbles burst, this one will cause some stocks to skyrocket.
Prepare for Panic Buying
It’s no secret that jittery investors fled to cash in 2022 and parts of 2023, more than any other time in history. As a result, uninvested cash has reached epic levels – an all-time record of about $6 trillion dollars.
We can compare this bubble to other financial bubbles in the past: Black Tuesday in 1929, the Tech Bubble in the 90s, the Stock Market Boom in the 2000s, and the recent Bitcoin Bubble in 2019.
The one thing they had in common is that they all burst. Most popped with panic selling, in which investors scrambled to get their cash back.
But this is a cash bubble, which means it has to burst with a buying panic as investors try to get out of cash and into assets.
As rates fall – which market rates have already started to do – that massive mountain of cash won’t earn as much interest. And now the Federal Reserve’s forecast actually calls for rate cuts in 2024.
And where do you think that cash will go? Especially with stocks moving higher.
A small window has opened for everyday Americans to get positioned ahead of this cash bubble bursting.
You’ll want to move into stocks set to be on the receiving end of these massive cash flows.
Flagging the Best Stocks
There are well over 6,000 publicly listed U.S. stocks.
And I can tell you from doing this a long time, a lot of them will not do well… even with the cash bubble bursting and money flooding into stocks.
So how can we tell which ones are most likely to move higher?
I’ve spent decades and dollars developing a system that gives me an informational edge in the markets. It starts with hundreds of data points for each individual stock. To this day, my system looks at 1.3 million data points every day.
Over my decades on Wall Street, I’ve picked the brains of some of the most successful investors, and I refined all of those data points down to just 29 factors that best predict a stock’s future price movement.
I then tweaked the recipe – a pinch more of this, a dash less of that – until extensive testing gave me the results I wanted.
The proof is clear: More than 30 years of results show that by accessing the right data and analyzing it the right way, my system identifies moneymaking stocks with stunning accuracy and beats the market by an outstanding 7-to-1.
Like the monster 1,951% move in Tesla from 2019-2021. (And by the way, TSLA rates well in my system today with a Quantum Score of 77.6.)
And as this cash bubble gets ready to burst, my system continues flagging the best-positioned stocks that have Big Money flowing into them.
These are the top-ranked stocks with muscular fundamentals, strong technicals, and inflows from hedge funds and institutions.
And guess what? Those big boys will be redeploying some of their cash, too.
Things are looking good for 2024. I wish you and yours the happiest of holidays, and best wishes for a happy, healthy, and profitable new year.
Editor, Jason Bodner’s Power Trends
P.S. This is the first opportunity of its kind – a chance to own the highest-rated stocks before a tsunami of cash washes over the market.
In fact, we’ve already seen big moves since the latest market rally began at the beginning of November. Our TradeSmith Investment Report stocks are up 19% on average since then, which is spectacular.
You can learn more here, including how to gain instant access to all of my recommended stocks.
I also recorded a special presentation explaining the cash bubble, how it will end, and three steps you can take now to make sure you’re ready. You can view it here.