These Stocks Offer Plenty of Upside From Here

“Negative Interest Rates Are Coming.” That was the headline to my April 1 DailyWealth.

No, it wasn’t an April Fools’ Day joke… I was serious. I was right…

Just yesterday, Mario Draghi – the head of the European Central Bank – cut short-term interest rates to below zero in Europe.

I said this was likely to happen. And I told you what you should do about it. Here’s what I wrote:

Much of Europe could see negative interest rates – soon.

What will happen then? You already know… Savers will get clobbered. People will borrow money. And asset prices will go up.

So what should you do?

Own assets. Own stocks and real estate, both in Europe and in the U.S.

Know that you will sell those assets someday. You know that the rise in asset prices will be built on ultra-low (and potentially negative) interest rates around the globe. And you know that those ultra-low interest rates will have to end someday. You don’t want to go down with the ship.

That was exactly the right advice…

As I write, European stocks are breaking out to new 5-year highs (based on shares of the SPDR Euro Stoxx Fund (FEZ), the main European stock fund). And U.S. stocks are hitting all-time highs.

[ad#Google Adsense 336×280-IA]That advice still stands today…

We saw what happened in the U.S. when Ben Bernanke pulled out all the stops to stimulate the U.S. economy…

He created what I call the Bernanke Asset Bubble.

U.S. stock prices soared.

Now, Mario Draghi is following Bernanke’s playbook…

He’s pulling out all the stops, and he has cut interest rates to below zero.

Call it the Draghi Asset Bubble if you’d like… it is definitely the sequel to the Bernanke Asset Bubble.

So what should you do? Follow the blueprint that Draghi is following…

You could make a heck of a lot of money if you do…

You don’t need to make it complicated… simply buy a basket of European stocks – something like America’s Dow Jones Index, only in Europe. Shares of FEZ (an exchange-traded fund, or “ETF”) are just that – the fund holds 50 leading European companies.

Negative interest rates are here. They will push European money out of savings accounts and into stocks and property, creating the Draghi Asset Bubble. Get your money there before everyone else… There’s still plenty of upside from here…

Good investing,



Source: DailyWealth