Tags: Stock Market | Dividend Machine | Rally

Expert Predicts 399% Stock Market Rally

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The following are excerpts from an interview between Aaron DeHoog, the financial publisher of Newsmax Media, and Bill Spetrino, editor of the Dividend Machine newsletter, which has posted 161% returns since its inception in 2009.


Aaron DeHoog:
Bill, you recently claimed that the stock market is poised for a 399% rally. That would send the Dow up to the 60,000 level! That’s a pretty wild claim; what evidence do you have to back this up?

Bill Spetrino:
Stocks trade in 15-year cycles. Since 2000, we have been in what’s called a “bear market cycle” — a time when stocks are flat. Right now the market is forming a base, and if you look at this chart, you will see the market is flipping over from this “bear market cycle” to a “bull market cycle” — a time when stocks rally.

Editor’s Note: Click here to see the chart Bill is referencing in the video interview.

Aaron:
OK, I see that. But why a 399% market rally? How can you be so sure it won’t just be a 100% rally?

Bill:
Since 1896, we have experienced four of these “bull market rallies.” The average return of these rallies is 399%. But honestly, this next rally could be much higher. The last bull market cycle handed investors returns of over 1,000%.

Aaron:
It seems like a huge claim to make based on one chart.

Bill:

Well, it would be if I based my predictions only on that one chart. But I actually have a lot of other data to back this up. Take for example...


Editor’s Note: To see the four additional reasons Bill is confident the stock market will rally, watch the video interview here.


Should You Invest . . . NOW?

Aaron:
Bill, that information is shocking. So, essentially, for those people sitting on the sidelines, it’s not too late to get in.

Bill:
It’s like the saying, “When is the best time to plant a tree?”

Aaron:
Several years ago. The second best time is now.

Bill:
Exactly.

Aaron:
So how do people get started? Do they just go out and buy a mutual fund, a stock, do they call a broker?

Bill:
Good question. The last thing a person wants to do is invest blindly. All stocks are not equal. For example, last year the stock market went up roughly 13% as measured by the S&P 500. For those who don’t know, the S&P 500 is a list of 500 publicly traded stocks. Now, of these 500 stocks, 490 of them virtually remained flat or went down. Only 10 stocks went up.

Editor’s Note: See Graph of the 500 Stocks in Full Video

Aaron:
Wow, so odds are, if people are just blindly picking stocks, they would miss out on the gains. So people should really just buy mutual funds, right?

Bill:

Well, a mutual fund would post decent returns. Probably a bit less than the market performance because you have to take out management fees and things like that. I suggest picking the winning stocks . . . find the 10 stocks that made up all the gains, and go with those.

Aaron:
Yeah, but how does one know how to do this? Were you able to pick those 10 stocks last year?

Bill:
Eight of them, yes. And before you say it was just “luck,” it wasn’t. I have a secret weapon: an 18-point system that I have been developing since the early 1990s that has allowed me to identify these stocks.

Editor’s Note: See Bill’s 18-Point System Explained

Aaron:
Can you give an example of a stock that your system identified?

Bill:
Sure, take Bank of America (BAC). Did you know that at one point Bank of America was a $50 stock? And that just last year, it was trading for as low as $7? Bank of America was a steal at $7. I knew it was because as a former accountant, I could tell that if the bank literally just sold off all of its assets — its buildings, its computers, its cash, everything — well, then, the company was worth more than $7 a share. The stock was a steal then, and it’s a steal now at $13.

Aaron:
Your point is taken. So, what are your top five stocks to buy now?

Click Here
to Get Access to the Full Video and the Top 5 Stocks to Buy Now


Triple Your Stock 'Salary'

Aaron:
So, you convinced me. The stock market is going to rally 399%. Now, earlier you said that there was a way for people to triple their returns.

Bill:
Yes, and it’s a conservative move actually.

I like to use one’s salary as an example. What would you rather have — a salary of $100,000 today that grows at 10% a year, or a salary of $200,000 with no growth potential?

Aaron:
Well, I am sure this is a trick question [laughs]. But I will play along . . . I will take the $200,000 a year.

Bill:
See . . . you know better, but the money up front is just too good to resist. Well, over the course of 30 years, had you chosen to go with the lower salary now, with the guarantee of 10% increases, you would have gotten paid a total of $16.5 million instead of $6 million.

Aaron:
Wow, so that 10% increase really adds up. But a 10% pay increase is very unlikely.

Bill:
True, but not when it comes to the salary a stock pays you.

Aaron:
Come on, a stock doesn’t pay a salary.

Bill:
No, but some stocks pay dividends. These are cash payouts to people who own the stock. And you want to pay attention to the historical dividends they pay out, not the current payout.

So for example, there are a lot of stocks that pay a 10% annual dividend. But what good is that if they can’t keep paying that return? It’s like getting a pay cut to your salary.

Here’s the answer: Find stocks that increase their dividends every year. I have a list of companies doing just that for the last century. Talk about a track record!

Aaron:
Name one stock that has done this . . .

Bill:
Coca-Cola. A $10,000 investment in that stock 30 years ago would turn into over $500,000 because the dividend payouts keep increasing. The key is you have to compound those dividends.

Aaron:
What do you mean by compounding?

Editor's Note: Click here to watch the full interview with Bill, where he explains the power of compounding, and how you can get a copy of his newest book, Rich by Friday, as part of a special offer.

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Stock Market,Dividend Machine,Rally
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2013-38-20
Monday, 20 May 2013 02:38 PM
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