However, we saw the biggest spike in inflation in 40 years during the Biden Administration, thanks to massive deficit spending, near-zero interest rates, and the temporary shutdown of the global supply chain.

Yet “time prices” still came down by the end of 2024, extending the long-term trend.

Between 2000 and 2024, the CPI rose 82.2%.

But hourly earnings for blue-collar workers rose 115.1% – outpacing inflation by more than 40%.

That means an hour of work bought 18.1% more goods and services at the end of 2024 than it did at the beginning of 2000.

That’s progress. Just not the kind that the media bothers to cover.

Unlike money, time can’t be counterfeited or inflated.

There is perfect equality here. We all get 60 minutes in an hour and 24 hours in a day.

Our time is truly our most precious resource, the only one that cannot be recycled, stored, duplicated, or recovered.

When time prices decrease – as they have for decades now – an hour of time buys more products and services.

While people often compare what they make with someone earning more, they rarely stop to realize how much more they can buy today compared with what they could buy in the past for the same hours worked.

Time prices are the one unimpeachable standard to compare abundance from one era to another.

And their fall is not due to an increase in material resources. It is due to the expansion of knowledge, which enables us to use resources more creatively and effectively.

This is a powerful phenomenon, yet one that is not commonly understood.

Being able to afford more while working less is further evidence that most Americans are living the Dream without realizing it.

Most of us take the long-term improvement in our standard of living for granted.

Indeed, there is a common misconception that increasing progress and prosperity have been the norm for as long as human beings have been around.

Yet history reveals that this is decidedly not the case.

Imagine, for example, that the Roman statesman Cicero was magically able to time travel and visit Thomas Jefferson at Monticello more than 1,800 years later.

Cicero would arrive at the coast of Virginia the same way Jefferson would have made the trip to Italy.

He would ride a horse to the nearest port and trust his fate to a windblown ship.

When Cicero arrived at Monticello months later, things would look quite familiar.

Jefferson’s home was heated by fire in the winter, and the doors and windows were left wide open in the summer, the same as in ancient Rome.

Jefferson read by candlelight, drew his water from a well, ate mostly what he raised, used an outhouse, and owned slaves, just like Romans did 18 centuries earlier.

Cicero would learn that four of Jefferson’s six children did not survive early childhood.

Nothing new there. This was sadly the case for most of human history.

(Jefferson’s wife died at age 33 of complications from giving birth to their sixth child.)

Except for a few notable innovations – like the printing press, gunpowder, and the compass – life in 1800 was hardly distinguishable from life almost 2,000 years earlier.

Since then, however, there has been an explosion in human progress and prosperity.

Economic historian Deirdre McCloskey calls it the Great Enrichment, a period of exponential wealth creation that started more than 200 years ago and is still accelerating.

This is plainly visible in the quality of your transportation, the speed of your communications, your many laborsaving devices, and the huge variety of goods, services, and outright luxuries available to you at the click of a button.

Thomas Jefferson did not have electricity, cars, trains, airplanes, radio, television, cameras and video recorders, smartphones, computers, lasers, batteries, the World Wide Web, antibiotics, vaccines, pacemakers, artificial hearts, MRI scans, gene therapies, and countless other lifesaving and life-enhancing innovations.

What is most responsible for our exponential increase in abundance?

Two things: freedom and people.

Freedom is crucial because it allows people to create and profit from their innovations.

(That’s why goods and services have not become cheaper for the average consumer in Cuba, Venezuela, North Korea, and other unfree nations.)

But this phenomenon is not about freedom alone. It’s also about more people. A lot more people.

People generate knowledge. Knowledge multiplies output. And freedom lets people share, trade, and profit from their discoveries.

The freer a society, the greater its time price gains. The more people it empowers, the richer its outcomes.

Scarcity didn’t win. Innovation did.

We have increased food supply, for instance, by increasing yields from existing fields.

We’ve increased our agricultural efficiency so much that less than 2% of the U.S. population farms at all.

After more than a century of intensive fossil fuel use, we have more known deposits of oil and gas than ever before.

(And we’ve surveyed only a tiny portion of the planet.)

Overpopulation is not a threat. On the contrary, limiting population growth limits brainpower.

Yet generations of schoolchildren have been taught that population growth makes resources scarcer.

Indeed, academia and the media repeatedly warn us that we are consuming the planet’s natural resources at an alarming rate… and that they will soon be gone.

Not true. Resource abundance is growing faster than the world population.

Our economy has reached such a level of efficiency and sophistication that we are producing an increasing amount of goods and services while using ever-fewer resources.

For example, from 2014 to 2024 U.S. real gross domestic product grew by 27.6%.

But, over the same period, energy consumption decreased by 1.3%.

Western countries have learned how to get the most energy with the least emission of greenhouse gases.

As we climbed the energy ladder from wood to coal to oil to gas, the ratio of carbon to hydrogen in our energy sources fell steadily.

As a result, fewer American cities are now shrouded in a smoggy haze.

Our distant ancestors spent most of their waking hours hunting and gathering food to live.

Yet the typical American today earns their food in a matter of minutes. And we are spoiled for choice at the average supermarket.

We have more goods and services available – and work fewer hours to afford them – than any previous generation.

The world today is incomparably richer than it was in decades past.

Yet the doomsayers are unable to see it – or don’t want to.

Instead, they continually warn us that the end is nigh.

As a result, many Americans are unable to enjoy the countless advantages of modern life because they believe it is on the verge of ending – and there is nothing they can do about it.

Don’t buy it. Especially the claims about “overpopulation.”

The most important resource in today’s world is not oil or natural gas or some rare earth mineral.

It’s people. By applying their intelligence and creativity, individual men and women make other resources more abundant.

Additional people don’t just create additional demand. (Although that also promotes growth and prosperity.)

They represent an additional supply of ideas, knowledge, and productive work.

We shouldn’t underestimate the power of this. Or what time prices tell us.

When you spend less time laboring to feed and clothe your family, put a roof over your head, keep the lights on, and pay your bills, you are gaining the ultimate wealth: more time to do what you really want.

This is not just prosperity. It’s superabundance.

And another reason to acknowledge that the American Dream is alive and well – for those with eyes to see it.

The post How Americans Have Achieved Unprecedented Prosperity appeared first on Wealthy Retirement.

While most investors overlook this critical piece of the AI ecosystem, Alex believes it could become one of the most important beneficiaries of the next phase of the tech boom.

He details this below…

– James Ogletree, Senior Managing Editor

Artificial intelligence has generated no shortage of commentary – breathless predictions, dire warnings, sweeping promises. Yet for all the noise, very little attention is being paid to the single most important question for investors: What must happen behind the scenes for AI to actually deliver on its potential?

Because while the conversation tends to focus on what AI can do, the more consequential issue is what AI requires to function at scale.

The newest generation of AI chips is astonishingly powerful. Nvidia’s latest architecture, for example, processes data at speeds that would have seemed impossible a few years ago. But this development has created a less glamorous – yet absolutely fundamental – challenge. These chips generate extraordinary heat, consume enormous amounts of energy, and produce more data per second than most existing systems can handle.

This is rarely discussed outside technical circles. Yet it is the limiting factor that determines how far and how fast AI can advance.

We are building larger and larger GPU clusters – some with hundreds of thousands of chips working in unison – and asking them to perform tasks that dwarf the demands of even the most powerful supercomputers of the last decade. But here’s the problem: These chips can’t operate effectively unless they can communicate with one another at incredibly high speeds… without melting the servers they occupy.

In other words, AI doesn’t rise or fall on clever algorithms alone. It depends on the physical infrastructure that underpins them.

And that’s where things get interesting.

There is a relatively small American company – one you almost certainly haven’t heard of – that has quietly solved the most important bottleneck in AI today. It doesn’t develop models or design chips. It builds the connective tissue that allows these chips to exchange data at blistering speeds while keeping heat and system instability in check.

Without this capability, the highly publicized advances in AI simply don’t work in the real world.

That’s why nearly every major player in the industry – Nvidia, AMD, Intel, Amazon, Microsoft, and others – relies on this firm’s technology. It is not an exaggeration to say that the most advanced AI clusters on the planet could not operate at scale without it.

This is the part most investors fail to appreciate.

Technological revolutions rarely reward the companies that generate the headlines. They reward the companies that quietly make the entire ecosystem function.

During the dot-com boom, investors bid up flashy internet stocks to absurd levels while ignoring the behind-the-scenes firms that enabled the internet to actually run. Cisco, which built the routers that moved data from point A to point B, became one of the most profitable investments of that era. So did companies like Akamai, which solved the problem of delivering content efficiently across the web.

Meanwhile, many of the companies that investors thought would change the world disappeared entirely. Their business models weren’t sustainable. Their valuations weren’t rational. And the innovations they hoped to commercialize were ultimately built – or bought – by others.

The same dynamic is unfolding today in AI.

Investors are clamoring for the biggest names, the megacap platforms spending billions to stay ahead of their competitors. And many of these firms will continue to do well. But the most underappreciated beneficiaries of the AI boom are not the giants creating the models. They are the companies enabling those models to run safely, reliably, and at scale.

Consider the magnitude of what’s happening right now. Global data-center construction is accelerating at a rate we’ve never seen. Companies are racing to build new GPU clusters as fast as they can pour concrete. Entire power grids are being upgraded just to support these facilities. And late last year, a consortium of some of the largest firms in the world announced a multi-hundred-billion-dollar initiative to build what may become the largest AI supercomputing system ever attempted.

All of this expansion hinges on a single, unavoidable requirement: the system must be able to handle the data produced by the chips that power it.

Most investors don’t think about this step at all. They assume it’s already solved. It isn’t.

And that is precisely why the company addressing this challenge is not just a “nice to have” in the AI supply chain – it is foundational.

This is also where history acts as a guide. When investors become overly fixated on a narrow group of winners – whether it’s the Nifty Fifty in the 1970s, the dot-com darlings of the late 1990s, or the megacap tech giants of today – the biggest opportunities often emerge elsewhere. Not in the obvious place, but in the necessary place.

AI will undoubtedly reshape industries across the economy. It will enhance productivity, lower costs, accelerate drug development, improve supply chains, and transform manufacturing. But none of this happens unless the underlying infrastructure keeps pace with the models themselves.

In the meantime, investors would do well to remember that the biggest profits are rarely made where the crowd is already looking. They’re made where essential progress is being created – quietly, consistently, and before the rest of the world notices.

The post The AI Question People Aren’t Asking appeared first on Wealthy Retirement.

It’s a big honor, but if you’ve read any of Alex’s writings over the years, you know that it’s certainly not a surprise.

The most impressive part? The book won’t even be released for another two weeks!

Alex has put a ton of hard work into it, and I think this may be his best work yet.

Go here to preorder it today!

– James Ogletree, Senior Managing Editor

One of the reasons that 70% of Americans say the American Dream is no longer attainable is that they believe achieving it is due to luck… not skill.

Is there any evidence to support this view? You might be surprised.

A few years ago, my friend and colleague Mark Skousen asked if I would debate Robert Frank at his FreedomFest conference in Las Vegas.

I agreed.

Robert Frank is a New York Times economic columnist and the author of several books, including Success and Luck: Good Fortune and the Myth of Meritocracy.

Frank puts forward a thought-provoking thesis in his book: If you have been so economically successful that your income and net worth put you in the top 1% or 2% in the country, the deciding factor was not talent, education, hard work, risk-taking, persistence, resilience or all of the above.

It was luck, plain and simple.

After reading the book, I took an informal poll of family, friends, and neighbors.

What I learned is that, with few exceptions, individuals who have experienced a great deal of economic success believe Frank’s thesis is mostly false.

They believe that hard work and persistence are the deciding factor in wealth creation.

But almost without exception, men and women who have experienced modest economic success strongly agree with it.

Psychologists would say that is because human beings tend to accumulate pride and shun regret. We tend to take most of the credit for the good things we achieve in our lives and blame negative outcomes on circumstances beyond our control.

However, I discovered another interesting pattern.

Self-described progressives tend to agree with Frank’s thesis. Self-described conservatives and libertarians do not.

This goes to the heart of political differences between the two major parties.

Democrats generally feel that economic outcomes in life are primarily determined by your group membership and your circumstances: whether you were born male or female, Black or white, rich or poor, etc.

Republicans tend to feel that, whether the hand you were dealt at birth was better or worse, your economic outcome is primarily determined by your willingness to educate yourself, work hard, and take responsibility for your actions.

This is a generalization of course, but – in my experience – a fairly accurate one.

We hear these thoughts echoed when Democrats argue for sharply higher taxes on “the fortunate” or, in former President Obama’s phrase, “society’s lottery winners.”

Republicans, on the other hand, often talk about “personal responsibility” or how affluence is the result of “earned success.”

The truth, of course, is that good and bad luck play a role in everyone’s life.

For starters, you were incalculably lucky ever to have been born.

We know this because the possible people allowed by our DNA so massively outnumbers the set of actual people.

You were also extremely fortunate to be born in the modern era.

For most of human history, we existed on the brink of starvation in a world filled with danger.

(For most of the last couple hundred thousand years, no one worried about saving for retirement because nobody lived that long. Most people were dead by 25, usually of unnatural causes.)

Even 200 years ago – 6,000 years after the advent of agriculture – 85% of the world’s population lived on the equivalent of less than a dollar a day.

Today approximately 85% of the world’s population lives in developing nations. That means the odds of you being born in the West were 6-to-1 against.

This is a pretty big deal.

As Warren Buffett has said…

If you stick me down in the middle of Bangladesh or Peru or someplace, you find out how much [my] talent is going to produce in the wrong kind of soil… I work in a market system that happens to reward what I do very well – disproportionately well.

Whatever your economic success or political views, let’s give Mr. Frank his due.

You were born against astronomical odds.

Even then, the dead outnumber the living 14-to-1. And 99.9% of these 109 billion people lived lives of incredible scarcity and hardship.

People alive today had just a 1-in-7 chance of being born in the West where democratic government, the rule of law, property rights, first-world infrastructure and education, and the lack of any class or caste system paved your way for success.

Furthermore, if you were born more than 50 years ago and are both white and male, you likely didn’t experience the institutionalized discrimination that would have made your economic success more unlikely.

But then also…

Billions of people have been born in the West – many of them white and male and from middle-class or better backgrounds – and the overwhelming majority of them did not experience the financial success of millionaires or billionaires.

Is it possible that the deciding factor for these individuals – and others like them – was just luck? Is the meritocracy truly a myth?

Let me know your take in the comments.

Good investing,

Alex

P.S. My new book The American Dream: Why It’s Still Alive… and How to Achieve It will be out on November 11.

(It’s available now for preorder on Amazon.)

If you want a copy, please act sooner rather than later.

The post Is Building Wealth All About Luck? appeared first on Wealthy Retirement.

In the article below, Alex reveals why these Next Magnificent Seven tech stocks are crushing the market… beating the original Mag 7 by 304% and the S&P 500 by 450% so far this year.

Alex and Chief Income Strategist Marc Lichtenfeld also just unveiled a brand-new list of “Micro Mag 7” stocks – tiny companies poised to soar as America builds out its AI future.

Click here before Monday to watch the replay of their special Micro Mag 7 Summit.

– James Ogletree, Senior Managing Editor

Forty years ago, I took my first job on Wall Street, working as a stockbroker at an international investment firm.

Some of our stock recommendations worked out well. And some of them didn’t work out at all.

That is always the case, no matter where you get your investment advice.

However, I’ve never forgotten a conversation I had with one of my early clients.

I had recommended a tech stock that quickly tripled in value, although he took a pass on it when I originally recommended it.

In hindsight, he sincerely believed that it was my fault.

“Alex, when you find something this good, you really have to emphasize the upside potential. If I had understood that, I would have taken a big position.”

Some will hear this and say it’s just sour grapes. (Another “coulda-woulda-shoulda.”)

But I took his message to heart.

Whenever I thoroughly research a company and have great conviction in its potential, I try to make that clear when I recommend it.

I do that – in part – because our hundreds of thousands of Members of The Oxford Club are a smart bunch.

They understand that no one truly knows what the economy will do… or what inflation will be… or whether interest rates will rise or fall.

No one has a crystal ball. And I waste no time pretending that I do.

I talk about the positives and negatives in the market, the headwinds… and the tailwinds.

But with a few exceptions – on those rare occasions when investors are seized by abject pessimism or unbridled optimism – my market approach is consistent: “short-term neutral and long-term bullish.”

Why? Any investor worth his salt knows that we can always get a bolt out of the blue in the short term. (Consider 9/11 or COVID-19.)

But take a look at any long-term chart of the market. You’ll see that the line goes up, and to the right.

That’s why we’re long-term bullish.

Over time, successful companies increase their sales and profits. And their share prices rise to reflect that.

That’s why investing in an S&P 500 fund has been rewarding for patient investors.

It’s been so rewarding, in fact, that the only reason to invest in individual stocks is if you sincerely believe you can do substantially better.

That’s not easy. But the facts show that The Oxford Club has done this for more than two decades now.

Last year, for example, we invited new Members to join us by offering them a new portfolio called “The Next Magnificent Seven.”

At the time, the tech stocks in the original Magnificent Seven – Apple, Amazon, Alphabet, Meta Platforms, Microsoft, Nvidia, and Tesla – had become wildly popular.

So popular, in fact, that I called this “the most crowded trade on the planet.”

Traders and investors everywhere felt they had to own these seven stocks.

Why? Because those were precisely the ones they wish they’d owned earlier.

I said last year – and I’ll repeat it now – that those are dominant companies that should prosper for years to come.

But it is not just unlikely that they will do as well in the future as they have in the past.

It is completely impossible. Trust me: That will not happen in your lifetime or mine.

How can I be so confident? Well, let’s use reason – rather than emotion – to view the potential here. As I write…

• Apple is up over 80,000% since 2004
• Alphabet (formerly Google) is up over 12,000% since 2004
• Amazon is up 8,000% since 2004
• Meta Platforms (formerly Facebook) is up over 1,800% since 2012
• Microsoft is up over 2,900% since 2004
• Tesla is up over 38,000% since 2010
• Nvidia is up over 103,000% since 2004.

Spectacular returns… all of them.

So who’s to say this can’t possibly happen to these stocks all over again? Me, for one.

Nvidia has a market cap of approximately $4.4 trillion. It is a fast-growing company that makes the super-powerful chips that the burgeoning AI industry depends on. It’s a great firm.

However, it’s worth noting that there has never in the history of the world been a company worth $5 trillion, although I have no doubt that one day several will exceed that number.

Let’s set aside the 80,000% that Apple and 103,000% Nvidia have returned over the past two decades.

What are the chances of either stock rising even 10-fold from here to a market cap of $40 trillion?

Bear in mind, the entire U.S. economy last year was less than $30 trillion.

For a single company’s shares to be worth 133% of the nation’s total annual output would be not just “quite a feat.”

It would be impossible.

Yet there are many smaller companies that could rise 10-fold or more. And no doubt many of them will.

Some, in fact, will even match or exceed the past returns of The Magnificent Seven.

Given this reality, I told Oxford Club Members – and prospective Members – that they would be far better off investing in “The Next Mag Seven” rather than the current seven.

The same way Wayne Gretzky insisted that he became the NHL’s all-time leading scorer not by chasing after the puck but rather by skating “to where the puck is going to be.”

How has this strategy worked out? You can be the judge.

All told, so far this year they’ve beaten the original Mag 7 by 304% and the S&P 500 by 450%.

But now, there’s an entirely new presentation that I hosted with Marc Lichtenfeld to inform Members on seven tiny stocks that we believe could soar.

It’s called the Micro Mag 7 Summit, and you can tune in right here.

The post Can the Magnificent Seven Continue to Dominate the Market? appeared first on Wealthy Retirement.

He often says, “Save as much as you can, starting as soon as you can, and earn as much as you can for as long as you can.”

Below, Alex debunks some common investing myths and shares the truth about how to achieve financial independence for yourself and your family.

For more insights from Alex, check out our sister e-letter, Liberty Through Wealth.

– James Ogletree, Senior Managing Editor

Thirty years ago, the IRS counted 1.6 million Americans with a net worth of $1 million or more.

UBS – using data from several sources – put the number at 23.8 million in 2024, a nearly 15-fold increase.

What accounts for the surging number of everyday Americans with a seven-figure net worth, once the domain of CEOs and celebrities?

Three major factors: rising home values, rising stock prices, and continual inflation.

Let’s take a closer look at each and determine what you need to do – if you haven’t done it already – to become financially independent.

Let’s start with the basics…

I received only one piece of investment advice from my dad my whole life.

When I was a 22-year-old, he said, “Son, if you plan to stay in that town, you should buy a house rather than renting.”

It makes no sense to throw money away on rent – which is building equity for your landlord rather than you – unless your job (or your lifestyle) requires you to move frequently.

That’s what most U.S. millionaires have done. Overwhelmingly, they are homeowners.

They benefited from rising home prices, while renters found housing increasingly unaffordable, especially once rates started going up a few years ago.

The other thing most millionaire households did was invest in stocks.

No other asset class has outperformed a diversified portfolio of equities.

That means those who avoided risk – by investing solely in money markets, CDs and bonds – earned much lower returns.

Sure, with little to no volatility they had lots of restful nights. But they may not have a restful retirement if the money starts to run low.

Those who bought a home, invested regularly in stocks – in a 401(k) or elsewhere – and held onto them for 20 years or more almost certainly have a million-dollar net worth… or are well on their way.

If you did this, you probably feel a sense of pride that with work, discipline, and sacrifice you secured your family’s financial future.

The Washington Post sees it differently.

They recently accused millionaires – in an article, not an editorial – of widening “the gulf between rich and poor.”

There was no mention of how some folks don’t work, don’t save, don’t invest, or won’t stop spending.

That would undermine the victimhood narrative. (At the Post, personal responsibility is a forbidden subject.)

But here’s the rub: a million dollars isn’t what it used to be.

When I was growing up, the word “millionaire” was shorthand for rich.

Today it’s a nice, round number. But it’s also usually a point on a longer journey rather than a destination.

That’s partly due to inflation. It takes $2.1 million today to equal $1 million in 1995, according to the U.S. Bureau of Labor Statistics.

Most Americans recognize that a million dollars – while it certainly makes life more comfortable – will not provide a life of leisure.

According to Charles Schwab’s annual nationwide survey of 401(k) plan participants, $1.6 million is now the magic number.

That’s how much most feel you need to have to retire. Yet even that amount won’t provide a lavish retirement.

Invest $1.6 million in ten-year Treasury bonds and you will earn $67,200 a year at today’s rates – or $4,200 a month after federal and state taxes.

You could put the same amount into an S&P 500 index fund and – if it generates its long-term average return – it would earn about $160,000, or $9,625 a month after federal and state capital gains taxes.

After taxes? Recall that you have to sell part of your holdings before you can spend them.

And those capital gains rates – even long-term capital gains rates – are pesky.

Of course, the vast majority of Americans don’t think the rich pay their fair share.

So look forward to getting fleeced and denigrated year after year. (Welcome to the club!)

Of course, you could spend more if you dipped into your $1.6 million in capital.

But then your future returns would be lower and – depending on your spending habits – you could run through the entire principal amount, especially with people living longer.

Unfortunately, the investment return on zero is always zero.

That means the surest bet is to save as much as you can, starting as soon as you can, and earn as much as you can for as long as you can.

This is the safe way to reach your financial goals and to make sure your dependents always have enough.

The post The Surest Bet to Reach Your Investing Goals appeared first on Wealthy Retirement.

Yet most of it misses the essential point for investors.

Let me explain…

On the negative side, AI will eliminate millions of blue-collar jobs that involve routine physical tasks and white-collar jobs such as analyzing data, drafting documents, or handling customer service calls.

Privacy and security challenges loom large. That’s because AI doesn’t just enhance cybersecurity efforts. It also empowers hackers, cyber criminals, and other bad actors.

And deep fakes will make it much harder for people to know if the information or instructions they receive are accurate – or even legitimate.

On the positive side, AI will transform healthcare with more accurate diagnoses, faster drug discovery, and personalized treatment regimens tailored to the patient’s personal genome.

In transportation, it creates self-driving cars and trucks, smarter traffic controls, and coordination of urban infrastructure to lower carbon emissions, reduce accidents and save lives.

In education, it will provide personalized instruction, adapt materials to each student’s pace and learning style, and shrink learning gaps.

There are many more positives, of course, as well as many more negatives.

AI – like most transformative technologies – is not inherently good or bad.

It is a set of risks… and opportunities.

Yet little of the discussion centers on the most transformative aspect of AI: How it will dramatically enhance corporate productivity and efficiency at non-tech companies.

AI will boost economic growth, increase corporate sales, and make public companies far more profitable.

That’s great news for shareholders.

And investors have bid up The Magnificent Seven – and other megacap tech leaders – to record highs.

Since these stocks make up more than a third of the S&P 500, the market has hit record highs too.

But as an investor, the important thing to understand is the world-changing ramifications…

This is not just about the companies creating and improving AI.

It’s about the many hundreds of public companies whose business fortunes will improve dramatically as a result.

For example, during the dot-com boom 26 years ago, investors could foresee the dramatic impact of the internet.

As a result, they bid the leading internet companies on the Nasdaq to levels that were ultimately unsustainable.

The result? From its March 2000 peak to its October 2002 trough, the Nasdaq lost three-quarters of its value.

And many internet stocks lost over 90% of their value.

Think about that. The leading internet stocks were worth only a tenth as much a couple years later, even though the internet did indeed “change everything.”

Over the past few decades, every company has had to move a significant portion of its operations online.

Every company had to cut costs by eliminating middlemen.

And every company began selling products and services on its own website and through other e-commerce sites.

If they didn’t – or were slow to adapt – they’re no longer around.

Many of the dot-com names that investors were chasing – like eToys and Pets.com – are gone.

Former tech darlings like Cisco Systems (Nasdaq: CSCO) and Intel (Nasdaq: INTC) have massively underperformed the market.

Heck, Intel is worth less than it was 26 years ago.

Meanwhile, companies that were not obvious internet beneficiaries at the time – Old Dominion Freight Line (Nasdaq: ODFL), Deckers Outdoors (NYSE: DECK) and Visa (NYSE: V) for example – are up tens of thousands of percent.

Don’t get me wrong. Most AI stocks are not as overpriced today as internet stocks were in the first quarter of 2000.

I don’t believe they will crash and burn like the Nasdaq did 25 years ago.

But many of them are likely to underperform in the months and years ahead.

And the likely outperformers? They are not the ones spending countless billions to build and improve these platforms.

They are the ordinary companies that will be the beneficiaries of all that spending.

Banks, manufacturers, retailers, hospitals, homebuilders, energy companies and even utilities will see a huge increase in efficiency, productivity, and profitability.

But – here’s the key point – without spending all that money, much of it will ultimately be written off because the innovations don’t turn out to be best of class.

Instead, these non-tech companies will merely buy – or subscribe to – what they need and reap the benefits.

That means many of tomorrow’s best-performing stocks – from both an offensive and a defensive standpoint – will be not The Magnificent Seven but smaller companies.

We have many of these in our Oxford Club portfolios now, as we position for the eventual rotation out of Big Tech and into Global Value.

Bottom line? The upside is greater. The valuations are better. (Much better.) And the downside risk is far lower.

Given the market events of the past few weeks, this rotation already appears to be underway.

That means the high-growth/low-risk play today is not the tech behemoths that everyone has been chasing for the past two years.

It’s value stocks, both large and small.

The post The Move Out of Big Tech Is Underway appeared first on Wealthy Retirement.

Sure, anyone can make a good call occasionally.

But no one gets it right consistently.

That means it’s just a matter of time before market timers end up on the sidelines while the market puts on a furious rally.

The past few months have been a perfect case in point.

Every time President Trump threatened or imposed tariffs, the market would sell off.

And every time he delayed, reduced or negotiated them away, the market would rally.

Just look at the tariff timeline since this year’s inauguration…

On February 1, the Trump administration announced tariffs on Mexico, Canada, and China to take effect on February 4.

On February 3, Trump reversed course and delayed tariffs on Mexico and Canada but allowed 10% duties on China to go into effect.

On February 13, the administration unveiled a plan for “reciprocal tariffs” on an array of countries and goods to take effect around April 2.

On February 26, Trump claimed the European Union was formed to “screw the United States” and again threatened the bloc with 25% tariffs.

On March 4, the administration imposed 25% tariffs on imports from Canada and Mexico and an additional 10% tariff on imports from China.

On March 6, Trump reversed course and excluded an array of goods from Mexico and Canada from the new tariffs. But tariffs on China stayed on.

On April 2, Trump announced “Liberation Day” tariffs of 10% worldwide and additional duties on the “worst offenders.”

On April 11, the administration announced reciprocal tariffs will exclude consumer electronics from most countries but retained a 20% tariff on electronics from China.

On April 23, a dozen U.S. states filed a lawsuit to stop President Trump’s tariffs, arguing they are unlawful because they bypassed Congress.

On April 29, Trump signed executive orders to relax some of his tariffs on automobiles and auto parts.

On May 12, the U.S. and China agreed that for 90 days, the U.S. tariff on Chinese imports would drop from 145% to 30% and the Chinese tariff on U.S. imports would drop from 125% to 10%.

On May 28, the United States Court of International Trade put a temporary pause on Trump’s wide-ranging tariffs, ruling that the International Emergency Economic Powers Act (IEEPA) does not give the president “unbounded” authority to issue worldwide and retaliatory tariffs.

On May 29, an appeals court temporarily paused the order from the United States Court of International Trade, making the fate of Trump’s tariffs uncertain.

Wow. That’s a lot of tariff impositions, delays, reductions, and negotiations.

Now… let me ask you a question. Who predicted all of this?

The answer, of course, is no one.

Who predicted most of this?

Again, no one.

That made timing the market’s plunge and recovery impossible.

Yet Oxford Club Members had the chance to make a boatload of money over this period.

How? By knowing that the worst tariffs were unlikely to last.

As I wrote to our Chairman’s Circle Members on April 7, as the market was melting down…

Trump views the stock market as a barometer of his success as president.

(And you should never underestimate a man who can turn a mug shot into a campaign poster.)

Knowing this, Oxford Club Members had the chance to use the multi-week meltdown to buy over a dozen beaten-up stocks.

Today they are much higher. In fact, one of them is up over 100% in less than two months.

Following “Liberation Day,” equity investors everywhere got whipsawed.

The worst sold in a panic as stocks collapsed.

Average investors sat on their hands and did nothing. (Or made the mistake of waiting for stocks to get even cheaper before committing any fresh money to the market.)

But smart, opportunistic investors took our advice and bought great companies while they were inexpensive.

Now we are reaping the rewards.

Bear in mind, we are not market timers. We had no idea what Trump would do next. We had no idea how quickly the market would recover.

However, we invest according to time-tested principles.

History shows that the smartest thing to do in a market meltdown is to buy quality assets while they are inexpensive.

Yes, you can always wait for stocks to go even lower.

But that’s market timing, and it doesn’t work.

Bottom line? When assets are cheap, don’t get caught stealing in slow motion.

The post How We Turned a Multi-Week Meltdown Into a Buy Opportunity appeared first on Wealthy Retirement.

Below, Alex gives us an important and inspiring reminder that the American Dream is still within reach.

For more of this type of content from Alex, check out the Liberty Through Wealth website here.

– James Ogletree, Managing Editor

I recently debated with author and economist Dr. Gregory Clark, who argues that there is no social mobility in this country.

In his view, you are statistically unlikely to rise above the economic quintile that you were born into.

There is a problem with his argument, however. It is demonstrably untrue.

Most readers have experienced economic mobility themselves.

Part of growing older is moving from earning no income, to earning minimum wage, to performing low-skill jobs, to landing better jobs – thanks to education and training – to earning your peak income (due to greater experience), to retiring and earning less.

This is a fundamental part of most workers’ experience. And it results in increasing income mobility right up until retirement.

Workers who, in addition, live within their means, save, and invest generate substantial assets as well.

And higher income and greater wealth make it far easier to live the American Dream.

I can now look back a half-century to my high school days and recognize dozens of men and women who followed this path. And I’ve met many hundreds more along the way.

This is merely anecdotal evidence, of course. (Although I’ll bet your experience is similar.)

A scholar like Dr. Clark would insist on reliable and convincing statistical evidence instead.

And there is plenty of it.

A few years ago, Senator Phil Gramm, Dr. Robert Ekelund, and Dr. John Early – three men with different political views – co-authored an excellent book entitled, “The Myth of American Inequality: How Government Biases Policy Debate.”

The authors note that there are essentially two ways to assess income mobility.

The first one measures changes in income over an individual’s lifetime (as I described above).

The other – Dr. Clark’s particular interest – measures the change in children’s income compared to the parents. (Intergenerational social mobility, in other words.)

Combining data from the Census Bureau, the Treasury Department, and the Pew Charitable Trusts, the authors demonstrate the following…

• The vast majority of Americans have experienced rising real incomes over all extended periods in the nation’s history.
• No matter what step of the economic escalator individuals begin on, rising productivity tends to increase inflation-adjusted earnings over time.
• Those who exert more effort – through education or persistence – earn even more.
• Multiple studies reveal a high level of mobility no matter what income level a child was born into.
• Almost 90% of adult children’s economic success comes from factors not related to the income ranks of parents.
• For children reared by parents in the bottom income quintile, 93% grew up to have more income than their parents.
• They conclude by saying, “Economic mobility is alive, powerful, and widespread in America today.”

Ours is a story of extraordinary upward mobility driven by the efforts of American workers and the most prosperous economy in the history of the world.

They also point out that most American fortunes – even the very largest – disappear within a few generations, thanks to charitable gifts and spendthrift heirs.

In the book, the authors cite Dr. Clark for doing a bang-up job of depicting wage stagnation from 1200 until 1800.

How he could remain impervious to the evidence that things are dramatically different today is a mystery.

It’s true that some countries have higher levels of social mobility than others.

What accounts for this difference?

1. Family structure: Communities with a higher proportion of two-parent households tend to have ever greater upward mobility, even for children of single parents.
2. Early childhood environment: Parent interaction and quality-of-life experiences give kids a head’s start. (Many inner-city toddlers grow up in a culture of silence. They come to kindergarten lacking basic knowledge, such as the fact that peas are “small, round, and green.”)
3. Education: Lower drop-out rates mean more kids have the skills they need to hold higher-paying jobs.
4. Social capital: Neighborhoods with strong social networks and community involvement have higher rates of mobility.
5. Migration: People who find it easy to move from rural areas to the city – or from one city to another – are better able to pursue better job opportunities.

Many U.S. communities do a good job of nurturing these values. Others, less so.

As a parent, I would try to foster these conditions to make it as easy as possible for my children to rise.

Looking at the list, I’m reminded of a story about Nobel Prize-winning economist Milton Friedman.

A Swedish economist once told him, “In Scandinavia, we have no poverty.” Friedman replied, “In America, among Scandinavians, we have no poverty either.”

Other nations do not struggle with the same racial history that we have here.

However, if Sweden’s robust welfare state is superior to the American system, it’s also worth pondering why Swedes here earn far more than Swedes over there.

Perhaps what individuals who believe the dream is dead really need is a change of perspective.

They may still have a long way to go to achieve their most important financial goals. But opportunities exist.

All they need is a plan to get there, the desire to get started, and a determination to carry through.

The American Dream is an aspiration and, ultimately, an achievement. Those who see it as an entitlement are bound to be disappointed.

The first step in achieving it is realizing that it exists – and then moving toward it in a systematic way.

The post The Case for American Social Mobility appeared first on Wealthy Retirement.

Below, he discusses one of his favorite topics: the steps that almost anyone can take to join the “Seven-Figure Club.”

– James Ogletree, Managing Editor

The Federal Reserve has reported that the average net worth of American families now tops $1 million, surging 42% from $749,000 in 2019.

Inflation rose sharply during this period, too.

Yet, even after inflation, real average wealth was up 23%, according to the Fed’s Survey of Consumer Finances.

This is something to celebrate. (Perhaps especially if you’re one of these new millionaires.)

Money gives you choices – not least of all the freedom to choose how to live your life.

Yet the Grinch isn’t just a fictional character created by Dr. Seuss. Many are angry about our nation’s rising wealth.

Why? Because prosperity creates inequality. And that’s unfair.

Or is it? Let’s take a closer look at what is happening and why.

That nation’s average household net worth of more than $1 million is skewed by the relatively small number of multimillionaires and billionaires.

About 16 million Americans – just over 12% – have a net worth that exceeds $1 million. Approximately 8 million families are multimillionaires.

These households tend to have higher incomes. They generally earn between $150,000 and $250,000 a year.

Yet millions of families with middle-class incomes have also joined The Seven-Figure Club.

What are they doing that other middle-class families aren’t?

They are being smart about money. That means they are paying down high-interest debt, contributing to an IRA or 401(k), building equity in a home, and earning better-than-average returns in the stock market.

Over the past few years, in particular, Americans accumulated trillions of dollars more than they were on track to save before the pandemic.

COVID-19 relief and stimulus spending – along with a government shutdown that prevented them from blowing it – is one reason.

Savings increased. Interest rates rose. As a result, the total assets in money market funds recently hit a record of nearly $6 trillion.

That’s good news. But only if you were a saver.

Residential real estate continued to rise in value. Also good – but only if you own a home.

Stock prices are considerably higher than they were in 2019.

Still more good news if you’re one of the 61% of Americans who own equities, either directly or through mutual funds and ETFs.

In short, the recent jump in the number of millionaire families had something to do with government largesse.

But it had more to do with personal financial decisions.

Let’s set aside for a moment the families who earn too little to save.

(We should have compassion for these folks.)

Tens of millions of Americans with average or above-average incomes – consumers who splurge on designer brands, drive late-model cars, eat out regularly and treat themselves more than occasionally – made a conscious decision not to save or invest.

Some would say they are reaping what they sowed.

More to the point, they didn’t sow. After all, making fresh investments is like planting seeds.

Just as the tiny acorn turns into a mighty oak, small investments – left alone to compound over years or even decades – will turn an average investor into a millionaire or multimillionaire.

The folks who save and invest get richer. They also leave those who don’t further behind.

But unequal doesn’t necessarily mean unfair.

All that’s needed to become a millionaire – or turn a million-dollar portfolio into a multimillion-dollar fortune – is to work, save, invest and compound.

Yes, it takes discipline and patience.

Yet tens of millions of Americans whose wealth would define them as poor today will one day be rich.

As a young man in my 20s, for example, I had no job security, no savings, no health insurance, no investment portfolio and a net worth of approximately zero.

Looking around at the time, my friends and neighbors were pretty much all in the same boat. Yet that changed over time.

Polls show that my experience was not unusual.

For example, only 1% of families under 35 are millionaires. But that rises dramatically with age.

By ages 55 to 64, more than 1 in 5 families are millionaires. In fact, 11% of those in this age group have a net worth of over $5 million.

Don’t get me wrong. There is still plenty of economic struggle in the U.S.

Yet many of these folks are lacking only direction – and a plan of action.

The post The Road to the “Seven-Figure Club” appeared first on Wealthy Retirement.

Should he sell? Not necessarily.

There are plenty of reasons that officers or directors might sell that have nothing to do with the outlook for their business.

For example, insiders might sell to diversify their portfolios.

Bill Gates has been a regular seller of Microsoft (Nasdaq: MSFT) for decades.

Is it because he doesn’t like the outlook for the company he founded?

Hardly. The overwhelming majority of his net worth is tied up in the stock.

But even Bill Gates has an overhead. He must sell shares from time to time to pay his bills and fund his activities.

Or… insiders might sell to meet specific financial needs, like paying for a second home or Ivy League tuition for their kids.

Or maybe they’re getting a divorce and have to sell their shares.

There are lots of reasons an insider might sell that have absolutely nothing to do with the near-term prospects of the business.

On the other hand, there are good reasons an insider would sell that have everything to do with the company’s near-term prospects.

The insiders at Enron, for example, sold $1.1 billion worth of the stock in the 12 months before the company filed bankruptcy.

Insider selling is tricky. Sometimes it’s a negative signal. Other times it’s not.

But turn the equation around. Why would insiders buy significant amounts of their own companies’ stock with their own money at current market prices?

There is only one logical answer.

Given all they know about the company, its employees, suppliers, customers and competitors – including plenty of material, nonpublic information – they feel the shares are selling far below their intrinsic worth.

And that’s a signal worth noting.

I’ve been tracking insider buying for nearly 40 years now.

In early 2020, for example, I recommended At Home Group in one of my VIP Trading Services. It’s an operator of home décor superstores.

I told readers that the company had missed sales and earnings estimates over the last few quarters.

That explained why the stock had collapsed from more than $40 to about $6.

With most of its sales coming from brick-and-mortar operations, it looked like a classic victim of the so-called “retail apocalypse.”

Especially with the pandemic growing and store closures on the way.

However, I noted that insider Clifford Sosin – who owned more than 10% of the outstanding shares – had recently purchased another 470,000 shares.

Insiders aren’t prone to throwing their money down a rathole.

And Sosin’s track record showed that he had been particularly astute with his previous insider purchases.

Sure enough, the stock bounced back.

And in early 2021, At Home agreed to sell itself to private equity firm Hellman & Friedman for $2.8 billion – all cash – or approximately $36 a share.

Does insider buying always pan out this way? Of course not. No market signal is infallible.

But insiders do have a massive, unfair advantage.

That’s why the federal government requires them to file a Form 4 with the Securities and Exchange Commission every time they buy or sell their own companies’ shares.

Insider buying is one of the most compelling signals you can get.

When you see officers and directors piling into their own companies’ shares, you can safely ignore what the analysts are saying.

After all, analysts are covering dozens of stocks. Insiders are actually running that one company.

Analysts don’t have access to material, nonpublic information. Insiders do.

More to the point, analysts are putting out opinions. Insiders are risking their own money.

Who do you really want to listen to?

The post Insider Buying: One of the Strongest Buy Signals You Can Get appeared first on Wealthy Retirement.