Nine years of QE…

Near zero interest rates

When the effects of those started to fizzle out, we got tax cuts…

Now, the new spending bill will add $300 BILLION to the deficit.

This. Is. Insanity!

We’re already running $500 billion deficits each year, and these are good times.

What’s going to happen when times turn bad?

I’ll tell you in my latest Facebook video…

Harry
Follow Me on Twitter @harrydentjr

Chart of the Day

MLPs are a Steal Relative to Bonds

In case you haven’t noticed, it’s gotten ugly out there.

Volatility in the bond market has spilled over into the stock market, and the shares of anything “income oriented” have gotten absolutely slammed.

Real estate investment trusts (REITs) – long popular among income investors for their high yields – are down 7% in 2018, even while the S&P 500 is still up 3%. Mortgage REITs, business development companies, preferred stock, closed-end bond funds… all are sitting on losses year to date.

This is what you might expect in a bond-market correction.

When bond yields rise, bond prices fall… and so do the prices of virtually anything that pays a significant yield.

In the low-interest-rate world we’ve lived in since 2008, investors have been reaching for yield in the pockets of the stock market that most resemble bonds. So, as goes the bond market, so go the high-yield pockets of the stock market.

Harry expects bond yields to go a little higher before reversing again in what he calls the fixed-income trade of the decade. But already, we’re starting to see some pockets of real value.

Today, master limited partnerships (MLPs) – which tend to hold oil and gas pipelines with bond-like cash flows – are trading at some of their cheapest prices relative to bonds in history.

Prior to the 2008 meltdown, the MLP sector yielded about 5.5%, which was less than half a percent higher than the 10-year Treasury. That spread briefly shot up to greater than 10% during the meltdown and again briefly shot up to nearly 8% during the 2015 crude-oil rout. But for most of the asset class’s history, MLPs have traded at a spread of 2% to 4% over the 10-Year Treasury.

Well, that spread has now ballooned to over 5% again.

So, come what may in the bond market, MLPs are looking attractive.

Charles Sizemore

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Harry Dent
Harry S. Dent Jr. studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of his chosen profession that he turned his back on it. Instead, he threw himself into the burgeoning new science of finance where identifying and studying demographic, technological, consumer and many, many other trends empowered him to forecast economic changes. Since then, he’s spoken to executives, financial advisors and investors around the world. He’s appeared on “Good Morning America,” PBS, CNBC and CNN/Fox News. He’s been featured in Barron’s, Investor’s Business Daily, Entrepreneur, Fortune, Success, U.S. News and World Report, Business Week, The Wall Street Journal, American Demographics and Omni. He is a regular guest on Fox Business’s “America’s Nightly Scorecard.” In his latest book, Zero Hour: Turn the Greatest Political and Financial Upheaval in Modern History to Your Advantage, Harry Dent reveals why the greatest social, economic, and political upheaval since the American Revolution is on our doorstep. Discover how its combined effects could cause stocks to crash as much as 80% beginning just weeks from now…crippling your wealth now and for the rest of your life. Harry arms you with the tools you need to financially prepare and survive as the world we know is turned upside down! Today, he uses the research he developed from years of hands-on business experience to offer readers a positive, easy-to-understand view of the economic future by heading up Dent Research, in his flagship newsletter, Boom & Bust.