I worked on Wall Street for 15 years as a wealth manager… and then another 10 years as a fund manager.
During that time, I learned a few key lessons about the inner workings of Wall Street.
The biggest lesson was this: Never believe what Wall Street says. Instead, always look at what it does.
I’ve seen Wall Street jawbone crypto lower only to watch major players like JPMorgan, BlackRock, and Fidelity jump into this space this year – even during a brutal bear market that’s seen bitcoin and Ethereum fall 76% and 75%, respectively, from their all-time highs.
For years, I saw Wall Street keep ordinary investors out of their favorite playground – the private equity market.
And for good reason: The gains it’s pocketing are truly massive – far bigger than what you can make from publicly traded stocks.
According to one study, private market investing has made almost four times the return of public market investing over the last two decades.
More recently, I’ve introduced readers to alternative asset classes like collectibles.
According to a recent Ernst & Young survey, 81% of ultra-high-net-worth individuals now invest in alternative assets. By comparison, retail investors allocate less than 5% to alternative investments.
And it’s no surprise why…
If you look at assets like contemporary art, they’ve delivered average annual returns of 14.1% over the past 26 years… That’s compared to 8.7% for S&P 500.
That’s one of the reasons I left Wall Street. The incentives are stacked in Wall Street’s favor and the person who pays is the client.
So when I discovered the newsletter business, it was eye-opening. I could write about the “secrets” Wall Street would never tell you.
And I could help people transform their lives and do it in a way that doesn’t put their current life at risk.
Here’s why I’m telling you this now…
Right now, Wall Street is loading up on a little-known asset I’d wager is unknown to 99% of investors.
In fact, based on my research, a total of 17 Wall Street funds are investing 100% of their money in these assets.
And I believe they’re buying this asset to prepare for a looming crisis…
On the Brink of Collapse
If you’ve been following the past two weeks, you know I’ve been warning you about what I call the “Next Lehman.”
In 2008, Lehman Brothers went from being the fourth-largest U.S. investment bank with a market cap of $60 billion to one of the largest bankruptcy filings in U.S. history.
The collapse triggered a massive panic in the market that almost destroyed our entire financial system.
I believe we could experience a crisis that could be bigger than the Lehman collapse…
As I told you on Thursday, it involves emerging markets.
And the trigger could come on December 13. That’s when the Fed holds its next Federal Open Market Committee (FOMC) meeting.
Here’s why that’s important…
Emerging market economies are those with some – but not all – of the characteristics of a developed market.
Now, Lehman’s market cap was nearly $60 billion at its peak… and according to the World Bank, the total market cap of EMs is about $9.3 trillion – 155 times bigger.
This comparison matters because the U.S. dollar is the world’s reserve currency… That makes it the world’s most-trusted currency.
And since EM currencies are less trusted than more developed countries, they are often forced to borrow in U.S. dollars…
This opens them up to massive currency risk if the U.S. dollar moves significantly higher in value against their local currency.
So if the Fed keeps raising rates like it’s promised… I believe it will trigger a debt crisis in emerging markets (EMs).
When global interest rates rise, EM nations often aggressively raise their own rates to make their debt more attractive and to avoid a collapse in demand… This craters the debt’s value.
A stronger dollar also makes it harder for EM countries to service their debt… raises their risk of default… and causes investors to lose confidence in holding that debt.
It’s a vicious cycle that can quickly spiral out of control… and it’s the kind of collapse I think we’ll see in the next few months.
Now, you won’t hear them say it, but Wall Street is aware of this potential collapse…
My research suggests the big money players are loading up on what I call “VIP Shares.” And I believe you should add them to your portfolio, too.
Recession-Proof Crisis Protection
On Wall Street, the type of investments I’m talking about are called “preferred shares.”
They get this name because they give their owners a priority claim whenever a company pays dividends or distributes assets to shareholders.
And the dividends they pay are much higher than common stock – often more than double or triple a typical dividend.
On the other hand, preferred shares offer no preference in corporate governance. And they usually don’t come with a vote in company elections.
I call them “VIP shares” because the elite – like billionaires and institutional investors – usually purchase them… but anyone can buy them.
They’re just harder to find and lesser known because they use a different ticker symbol.
Companies issue preferred shares at a set price, generally $25.
And while these shares have less appreciation potential than common stock… They can trade at a premium or a discount to their issue price.
That’s where our opportunity comes in…
Right now, you can buy the preferred shares at a discount from their issue price. That means you can potentially profit from their appreciation.
And that’s on top of the incredible yields they’re generating.
Under certain circumstances, these types of shares can see gains of 6x, 9x, and even 14x.
We saw that happen during the 2008 Financial Crisis when RAIT Financial Trust preferred shares plunged as low as $2.22. Due to the price drop, it was yielding 94%.
By 2012, it had rallied to $24. When you combine that with its yield and price appreciation, that’s a 14x gain.
I believe the current economic conditions are similar to 2008.
As I mentioned above, EM debt will inevitably explode due to the Fed’s aggressive rate hikes. When this happens, the Fed will pivot.
That pivot will set off a ferocious rise in the prices of these VIP Shares. That’s because the yield generated by their dividends becomes more attractive as the rates go lower.
This causes investors to bid up the price of preferred shares as they try to capture the higher yields.
By purchasing these VIP shares now, you can lock in an elevated yield with the potential for capital appreciation when their prices rise.
That’s why I held an online briefing earlier this week to explain this coming crisis, as well as details about my 2023 Recession-Proof Portfolio.
This portfolio holds five VIP shares that could set you up for marketing-beating returns and double-digit gains as the EM crisis unfolds.
For a limited time, you can watch a free replay of this briefing right here… but be sure to watch soon.
It won’t be online for long… and by the time this crisis triggers, it’ll be too late to set yourself up for the returns I mentioned above.
Click here to watch.
Let the Game Come to You!