Editor’s Note: On Saturday, I told you why I think small caps are poised to pop. My friend, Jason Bodner, agrees, and he thinks the perfect storm of falling interest rates, inflation under control and both election-year and seasonal patterns are going to create a “Big Lift” in the market. In fact, he thinks a Retirement Accelerator is opening right now – for only the fourth time in the past 35 years – that could lead to multiple opportunities for triple-digit gains. Today, he’s going to tell you more about that window – and how he plans to profit.
Take it away, Jason.
On rare occasions, market forces converge to supersize the opportunities for smart investors.
We just entered one of these windows – what I call an “accelerator.” And my research indicates this could be one of the biggest and fastest-moving accelerator windows we’ve seen in a long time.
My team and I analyzed every such window since 1990, and we identified a certain group of stocks best positioned to explode under the exact conditions we’re in right now.
This window is opening for only the fourth time in 35 years, and it’s not too late to set yourself up for outsized profits that can create massive gains.
This rare accelerator opportunity can significantly accelerate your retirement plans – or any big financial goals you have. Buying a new house. Paying for college. The trip of a lifetime.
Even just the freedom to not worry about money.
Let me show you exactly what I’m talking about.
This Is Where the Juiciest Profits Are
The driving force in this accelerator window is interest rates – specifically falling rates.
Lower rates are now possible because inflation has plummeted after the lengthy battle fought by the Federal Reserve. The Fed boosted rates 11 times from March 2022 to July 2023, lifting them from basically 0% to more than 5%, where they stayed for more than a year.
It worked. Inflation fell from just over 9% in mid-2022 to under 2.5% today.
And now the Fed can “loosen” its policy with rate cuts. The first one just hit on Sept. 18, so this window is just starting to open.
It’s exceptionally bullish for stocks. But especially smaller stocks.
I built my Quantum Edge stock-picking system based on data. I learned early on how much smarter and more effective data analysis is than gut feelings, emotions, or even educated guesses about the future.
The data for this accelerator window is clear: Stocks rise when interest rates fall, and smaller stocks outperform by a wide margin.
Smaller companies get more bang for their buck with lower rates. They typically take on more debt than large-caps to finance growth. When rates fall, that debt becomes cheaper, and those savings go right to the bottom line. Companies can also scale up at lower costs, which can contribute to earnings growth.
Small and mid-sized companies typically have bigger growth potential anyway, and lower interest rates help unlock that potential.
The Fed is expected to continue lowering rates for the foreseeable future, so we’re looking at a potentially long and strong run for stocks.
Digging into the data, I found that the S&P 500 rallied 26.8% on average over two years when the Fed lowers rates while the economy is in decent shape – just like now.
That’s a lot better than the average performance of about 10% a year, and we’re talking about the biggest stocks in the market.
When we zoom in on smaller companies, we see even juicier profits. The Russell 2000, the most widely followed small-cap index, surged 36.6% on average over the following two years.
It’s much easier for a company valued at $15 billion to double to $30 billion than it is for Apple to double from its $3.5 trillion market cap to $7 trillion.
And then there are money flows. If a big institution invests a billion dollars in Apple, it’s barely a ripple. It’s a huge amount of money, yes, but it’s less than 0.5% of Apple’s value.
But if an institution invests a billion dollars into an $8 billion or $10 billion company, you better believe it will increase buying pressure and drive the price higher.
Money Is Already Flowing Into These Stocks
Big Money is already turning its attention to small and mid-sized companies.
These are the largest investors on the planet that manage millions, billions, and even trillions of dollars.
Simply put, it’s the money that moves stocks. You want to ride the wave instead of swimming against it.
I know Big Money is flowing into these stocks because I built my Quantum Edge system to detect these money flows. I was fortunate to spend time running trading desks and facilitating these trades, and these millions and billions of dollars regularly passed through my hands.
Big Money wants to keep its activity quiet, for obvious reasons. If word got out which stocks these investors are buying, everyone else would jump in as well.
But I learned the telltale signs of Big Money at work, and I wrote sophisticated algorithms to identify where these flows are going – for both the market as a whole and right down to the individual stock.
I’ve found this to be hugely important in identifying the best stocks to invest in. So let me give you a peek inside at some critical data it is showing right now.
That’s a screenshot from my system showing both Big Money buy signals (green bars) and sell signals (red bars) by market capitalization. Those bars signal outsized buy and selling, which tells us what the big boys are doing with their massive amounts of money.
Look how lopsided the bars are in the smallest market cap (far left) and the next bigger size up – basically stocks $50 billion and under. Over the last three months, 81% of all Big Money buy signals were in those stocks.
These three months are some of the most volatile for stocks, but notice, too, that buy the signals in those smaller stocks outnumbered sell signals by nearly 2-to-1.
This retirement accelerator window has already opened, but it’s set to grow into one of the biggest and best windows over the last 40 years. Big Money is already buying the stocks that outperform in these conditions. Rates are set to continue falling for some time.
And here’s one final kicker – a record $6.5 trillion sitting in Money Market accounts. This money will return less as rates drop, which means a huge chunk of it will flood into stocks for better returns. Especially smaller stocks.
This is a rare opportunity you don’t want to miss. And the earlier you get in, the more money you stand to make.
I cover this retirement accelerator phenomenon in full detail in a just-released video bulletin. Be sure to check it out now.
You’ll learn more about this rare stock market pattern, the best strategy to take advantage of this unusual opportunity, and the small corner of the stock market slated for a huge rally in the coming months.
Talk soon,
Jason Bodner
Editor, Jason Bodner’s Power Trends
P.S. This rare market pattern is responsible for producing gains like 117%, 250%, and even 514% in extensive back tests.
The data shows the gains could be even bigger this time.
I go into all the details in the brand-new video briefing.
I also share a top stock pick – down to the ticker symbol – that is a prime spot to benefit from this accelerator pattern for a shot at triple-digit gains.
