This Breakout Points to Double-Digit Gains

We recently saw a breakout in an index that looks beyond the largest stocks. And that jump is important to what's coming next... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [DailyWealth] This Breakout Points to Double-Digit Gains By Brett Eversole --------------------------------------------------------------- The biggest stocks lead to the biggest gains... That has been the investment theme of the past two years. The idea of the "Magnificent Seven" came into existence last year for this exact reason. But now, the tide is turning... Specifically, we recently saw a breakout in an index that looks beyond the largest stocks. And despite the volatility that followed, that jump is important to what's coming next. As I'll explain today, it suggests this unique market tracker could see double-digit gains over the next year... --------------------------------------------------------------- Recommended Links: [LAST CHANCE: 2024 Stansberry 'Partner' Enrollment]( There's a much higher level of service and access that we provide to a small number of our very best customers. Until 5 p.m. Eastern time today, we're inviting YOU to look behind the curtain and get all the details. This could be the No. 1 move you can make today to prepare yourself for what could be a very long and volatile period in the markets. [Get the details right here in our special 25th-anniversary broadcast](. --------------------------------------------------------------- ['Brace for 50% Unemployment']( At the esteemed Fortune Innovation Forum, a world-famous venture capitalist warned that HALF of all people on Earth could soon find themselves out of a job. Not thanks to a recession or a depression... but a new collapse that has only just begun. For the surprising story of this looming collapse... and what it could mean for your life and retirement savings, [click here](. --------------------------------------------------------------- The S&P 500 Index is the most popular way to track the U.S. stock market. But like most major indexes, the largest companies dictate how the index moves. That's because the index weights companies based on their size. The bigger a business, the more influence it has on the index. And right now, the three largest stocks make up about 20% of the S&P 500. It doesn't have to be this way. You can use the same stocks to build the index without weighting them by size. If you do that, you end up with the S&P 500 Equal Weight Index... This index holds the same S&P 500 stocks, but at an equal weight. So instead of the three largest stocks making up 20% of the index, they make up less than 1%. That said, buying the equal weight index hasn't been a good strategy in recent years. Owning less of the biggest stocks would have meant missing many of the strongest performers of the past few years. But last month, this index staged a breakout. Take a look... The equal weight index recently broke out to a new all-time high. And at the end of July, it hit a new 52-week high. Even with the recent market pullback, that second breakout is worth paying attention to right now. To see it, I looked at every similar setup since 1990. New 52-week highs have happened 25 other times since then. And the index tends to keep rising after rallies like these. Take a look... The equal weight index may not have kept up with the S&P 500 in recent years, but it has been a smart investment over history. It has gained 9% per year since 1990 – even better than the 8.2% annual gain we've seen in the regular S&P 500 over the same three decades. Still, you can do a bit better by buying after a breakout. Those setups led to 4% gains in six months and nearly 10% gains over a year. That's a slight underperformance in six months... and slight outperformance over a year. But these setups also led to gains 84% of the time a year later. So the odds of success are high. More important, we shouldn't panic over the recent pullback. And we shouldn't view the new dominance from smaller stocks as a bad sign for the overall market. History shows the opposite... The equal weight index should keep moving higher. What's more, the normal S&P 500 led to outperformance in the year following these setups as well. So however you own stocks, the good times are likely to last. Good investing, Brett Eversole Further Reading The recent pullback has caused some folks to panic. But remember, corrections are perfectly normal. Here's why now isn't the time to sell based on knee-jerk reactions... [Read more here](. Small-cap stocks staged a rare breakout in July. Investors have gotten used to ignoring these smaller companies. But according to history, you shouldn't overlook this group of stocks today – because double-digit upside is likely from here... [Learn more here](. --------------------------------------------------------------- [Tell us what you think of this content]( [We value our subscribers' feedback. To help us improve your experience, we'd like to ask you a couple brief questions.]( [Click here to rate this e-mail]( You have received this e-mail as part of your subscription to DailyWealth. If you no longer want to receive e-mails from DailyWealth [click here](. Published by Stansberry Research. You're receiving this e-mail at {EMAIL}. Stansberry Research welcomes comments or suggestions at feedback@stansberryresearch.com. This address is for feedback only. For questions about your account or to speak with customer service, call 888-261-2693 (U.S.) or 443-839-0986 (international) Monday-Friday, 9 a.m.-5 p.m. Eastern time. 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This work is based on SEC filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. It may contain errors, and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.