With a recent large-scale correction in Chinese stocks, many investors have found themselves reticent to continue to keep their money in the notoriously volatile market. With many in the field looking to the well-known financial advice publisher, Stansberry Research, for expert advice on a variety of investment issues, it was perhaps inevitable that they’d receive questions on this most recent downturn. One of the publisher’s senior editors, Steve Sjuggerud, addressed these concerns in a recent issue of his True Wealth China Opportunities advisory. Read on for a look at Sjuggerud’s advice as well as a closer look at the broader value Stansberry Research offers investors (https://stansberryresearch.com/archive/stansberry-digest).
Worries Over China
Just as stocks in US markets fell in recent months, so too did Chinese and China-related stocks. This correction caused many investors to wonder if the air had gone out of China’s bull market. It also caused some to wonder if this was likely to be the worst performance they’d see from these stocks, or if they might reasonably expect more of these corrections in the future.
As readers wrote in with these concerns, Sjuggerud responded with a take that may be considered sobering. “When U.S. stocks fell last month, China-related stocks fell, too. It might have been the worst stretch of performance in the history of this publication,” said Sjuggerud. “Here’s the thing… This isn’t the worst performance we could ever see from our China portfolio.” He went on to detail how his team’s model portfolio holdings in this area are considered quite volatile. Accordingly, he felt it important to inform readers that this was to be expected when investing in China. It’s simply the current nature of the market.
History of Accuracy
These predictions on the market in China carry extra weight coming from a publication put out by Stansberry Research, owing to the publisher’s long record of accurately forecasting global markets. Founded in 1999 by Porter Stansberry, the publisher puts out a large number of extensively read newsletters, bulletins, and other periodical advisories. Their flagship newsletter, Stansberry’s Investment Advisory, is considered one of the financial industry’s most widely read publications.
This reputation for accurate predictions stems in part from Porter Stansberry’s own history of achievement. He first came to prominence as the first American editor of the Fleet Street Letter, the world’s oldest English-language financial newsletter. After that, he brought his investing expertise to his work with Stansberry Research where he has built a reputation for helping readers make sizable gains while avoiding economic catastrophe. One striking example of this work is his accurate prediction of the credit crisis, work that Barron’s noted was “remarkably prescient… Nothing, as far as we can see, has happened to contradict his dire prophecy…”
Finding a Sleep Point
While this history of on-point predictions is readily displayed in the True Wealth China Opportunities newsletter, Sjuggerud also sought to respond to readers’ concerns beyond mere prognostication. According to the editor, when dealing with a volatile market like China, what you invest in is an important concern, but equally important is how much you invest in relation to your wealth. “You might not want to hear this from me. But if the downturn in our China-related stocks last month kept you awake at night, you’re doing something wrong,” explained Sjuggerud. “Specifically, you have too much of your portfolio in China-related stocks. The solution is simple: Reduce the size of some of your holdings.”
This advice centered around the idea of assessing one’s “Sleep point.” This is the idea that one should reduce one’s holdings in an investment until they reach a point where they are no longer kept up at night with financial worry. When considering investment in a volatile market, such as China, arriving at one’s sleep point is key to being able to balance one’s financial exposure with one’s peace of mind (StansberryAM).
Stansberry Research’s Approach
This type of holistic investing advice that takes into account factors beyond a simplistic view of finances is characteristic of Stansberry Research’s offerings to its subscribers. This is reflected in the publisher’s two guiding principles. The first of these principles states that they strive to give their customers the information they’d want if their roles were reversed. The second principle states that they only publish analysts whose advice and strategies they’d want their own families to read and to follow. In order to support these principals, the publisher strives to offer a range of opinions so as not to tint their advice from a limited spectrum of advice. This strategy allows them to avoid promoting a single, unified view of the market, opting instead for something they call a “Mosaic of opinions, recommendations, and strategies.”
This reader-centric approach has helped bolster Stansberry Research’s reputation over the years, establishing it as a leader in the field of financial advice. The publisher currently lays claim to having over 500,000 subscribers worldwide with over 70,000-lifetime subscribers. This broad base of committed readers is a further demonstration of the value the publisher offers through its formidable team of editors and analysts.
China’s Longterm Outlook
In this tradition of providing valuable advice to investors, Sjuggerud’s recent analysis of the correction in China doesn’t merely end with a recommendation to seek a level of exposure that promote’s mental wellbeing. He also weighs in with an analysis of the possible directions the market may head. “Looking at the big picture again… China is doing much better than it might feel right now,” says Sjuggerud. “But to succeed, you must understand that downside is possible. And if it happens, it can be dramatic.”
This balanced take on China and investing as a whole is characteristic of the type of high-level investment guidance readers have come to expect from Stansberry Research. As the financial advice publisher builds on its almost twenty-year tradition of serving subscribers, it constantly strives to stay true to its founding principals. These principals not only seek to give sound recommendations but also to give advice that is so high-quality it would be fit for the editors and analysts themselves. Following these guidelines, the publisher will undoubtedly be able to build on its already impressive subscription rates for many years to come.