You wouldn’t know it today, but this time last week, we were on the tail end of a sell-off in stocks…
By Friday’s market close, the S&P 500 was down 3.5% from its Monday high, and the Nasdaq was down about 4.8% over that same period.
Then this past Monday, the market rebounded… and today, both indexes have bounced back and erased almost all those temporary losses.
And while it’s clear the recent spike in volatility scared more than a few investors out of the market… longtime Daily readers know that volatility is not at the top of our list of worries here at PBRG.
So, if you’re an investor looking for an easy way to protect your portfolio… or know someone looking for a safe way to dip their toe into the market…
There’s one investment strategy that can do just that and help you scratch someone off your holiday shopping list.
It’s better than traditional stocking stuffers like ties, socks, or candy… And it’s just as easy to buy.
While your family members might not get instant gratification from it, they’ll be thanking you years and decades down the road…
Before we get into the details, let me show you how we found this “gift”… and why it’s a proven way to beat the market and its embedded volatility year after year.
Holiday Shopping for Stocks
To find this gift idea, we used a strategy that’s crushed the S&P 500 by 3,135% over the last two decades. And even during the market’s worst crashes over the past 21 years, this approach achieved positive returns.
We call it the “Untouchables” strategy. That’s because these stocks are so safe and profitable over the long term… you’ll never want to touch them.
My research on the Untouchables involves looking at every major bear market over the last 21 years. I combed through thousands of companies for those that soar when the market rises – but only grudgingly give ground when it falls.
I studied every calendar year. I wanted stocks that hadn’t dropped 10% or more in any single year since 2000. In other words, stocks that fought through each year without going down by double-digit percentages.
You see, small losses aren’t a big deal. If your initial loss is 10%, you’ll need just an 11.1% gain to break even.
But big losses are ruinous. They’re hard to recoup. If your initial loss is 50%, you’ll need a 100% gain to break even.
So unlike other stock-picking methods that can expose you to 30–50% drops during bear markets, this one stays afloat even in the worst sell-offs.
During the worst calendar years for the markets in the last two decades (including a few brutal bears), our Untouchables strategy cranked out positive returns:
It was up 26.4% in 2000 when the S&P 500 was down 9.1%.
It was up 20.1% in 2001 when the S&P 500 was down 11.9%.
It was up 12.6% in 2002 when the S&P 500 was down 22.1%.
It was up 3.9% in 2008 when the S&P 500 was down 37%.
It was up 12.6% in 2018 when the S&P 500 was down 4.4%.
As you can see, holding these types of stocks will help you sleep well at night. They also all possess three key traits:
They haven’t dropped 10% or more in any calendar year since 2000 (as calculated between the prior year’s closing price and the following year’s closing price, dividends included).
They trade with extremely low volatility, so they’re ultra-safe.
And they all pay dividends.
But only a tiny fraction of the 19,000-plus publicly traded stocks in North America passed the test. Just 13 – or less than 0.1% – made our list.
And you can see in the charts below that this group safely crushes the S&P 500 over the long term. (Notice the wavy line on the left compared to the steadfast rising line on the right.)
Over the last 21 years, the S&P 500 had a cumulative return of 283%. Meanwhile, at the same time, our 13 Untouchables returned over 12 times that – for an average of 3,419%.
Keep in mind that you had to hold these stocks over that entire 21-year stretch to realize these returns. And past performance doesn’t guarantee future outsized returns.
But we’re confident these Untouchable stocks will continue outperforming the market…
The Gift That Keeps on Giving
If you want to add an Untouchable stocking stuffer, consider healthcare giant Johnson & Johnson (JNJ). It meets all our criteria. Remarkably, it’s raised its dividend for 59 years in a row. (It currently yields 2.6%.)
As a gift, it works perfectly for children or grandchildren.
If they’re under the age of 18 or 21, depending on state of residence, you’ll need to set up a custodial account for them. You can buy the stock in your own brokerage account and have it retitled. We also suggest using a direct stock purchase plan (DSPP) or dividend reinvestment plan (DRIP) for the best performance.
Ideally, the earlier you get a loved one started, the better. The more time the money has to earn, the greater the opportunity for compounding.
This is truly a gift that keeps on giving.
Analyst, Palm Beach Daily
P.S. If you’re looking to take your holiday gift-giving to the next level, a coming crypto catalyst is creating the opportunity for a lifetime’s worth of crypto gains in 2022… and all from a small initial investment.
Daily editor Teeka Tiwari calls it “The Final Halving,” and two days ago he pulled back the curtain on this catalyst and discussed six small cryptos that could skyrocket when it hits.
Teeka’s past recommendations like this have soared 6,041%, 15,912%, and 53,500% under similar circumstances… but the once-in-a-lifetime Final Halving is set to blow those away.
The Final Halving is too big to explain in this message, so click here to watch a free replay of Teeka’s presentation…
Because once the Final Halving triggers, your only shot at its biggest gains will be long gone.