Today, we pull back the curtain on a big lie. 

In part one, we showed you that the U.S. stock market is speeding toward an unprecedented wave of withdrawals. Baby boomers – the richest generation in world history – have driven a massive boom in U.S. stocks. They’ve poured trillions into the market to save for retirement, sending markets soaring to levels never seen in history. 

But 2018 marks a crucial turning point. This year, the average baby boomer turns 64. The average retirement age in America is 64. About 3.9 million boomers will retire in 2018 alone, and this number will grow every year through to 2023. 

If you read part one, the above statement may shock you. Baby boomers are the richest generation in history. How is it possible that the world’s richest people can’t afford retirement? 

As you’ve probably heard, the average baby boomer has a healthy net worth of just over $1 million. The financial media loves to trot out this statistic to assure us everything will be fine. 

Unfortunately, although it is factually accurate, it is wildly misleading. 

As Raoul explained, the numbers are massively skewed by the richest people at the top. If you drill down past the headline stats, you’ll discover the sad truth. Most boomers can’t afford to retire. 

The gap between the average boomer’s savings vs. what they need to retire is huge. It's so huge that, in most cases, it can’t be bridged by saving more money. Filling this gap requires earning big returns in the markets. 

And so boomers, realizing they need to play catch-up, have piled into stocks. 

In fact, Americans today have the highest allocation to stocks in all of recorded history.

In some ways this is a logical response. Stocks, after all, have achieved the highest returns of any asset class in the long-term. 

But they’re also the riskiest, prone to downcycles of 50% or more. And as we’re about to show you, 2018 is the exact wrong time to be piling into equities. 

If you’re overexposed to U.S. stocks today, you’re putting yourself in an extremely dangerous financial situation. 

By many measures, U.S. stocks are more overpriced today than they’ve ever been in history. One popular way to judge the value of the stock market is to divide its price by the amount of revenue the companies in it generate. As you can see below, this price-revenue ratio puts the S&P 500 at its most overpriced level of all-time:

We hope you’re starting to see what’s at stake here. 

There’s a high likelihood that the coming recession will catch most folks by surprise. As Raoul puts it: 

 “This is going to dwarf what we saw in 2008, and it is going to hit the Baby Boomers 
 incredibly hardTheir retirement savings will be decimated. 
 They will have no way of retrieving their losses.”
 

Recall in part one we discussed how baby boomers have plowed unprecedented amounts of cash into the stock market. Every week without fail, rich boomers constantly purchased stocks through their retirement accounts. 

This propelled the stock market to all-time record levels. But that’s not all it did. The constant influx of boomer cash also made the stock market incredibly resilient. 

We all remember how painful the 2000 and 2008 crashes were. But in both cases, high-earning boomers kept right on pouring their paychecks into the stock market. This fueled recoveries, and markets clawed back their big losses to achieve new highs. 

In the coming crash, there will be no rich baby boomers to step in and “buy the dip.” 

Instead, they’ll be retiring by the millions… selling stocks instead of buying. 

If you’re “holding the bag” when it all hits the fan, you’re likely looking at what traders call a permanent loss of capital. That means you’ll suffer massive losses that you may never make back. 

The math is clear. Total retirement assets in the U.S. are about $28.2 trillion. The vast majority is owned by boomers who’ll soon be permanently retired. 

Do you know how much the entire U.S. stock market is worth? 

Just under $30 trillion. 

We hope we’ve made the danger clear to you. 

A freight train is speeding toward us at 200 miles per hour. 

And right now is our chance to step off the train tracks. 


Ask yourself: can your wealth endure a 60% permanent loss? 


Say you have $200,000 invested in stocks. Will your retirement be OK if the value plummets to $80,000 and takes years and years to recover? 

We think that for a lot of us, the answer is “absolutely not.” 

Look, the coming crash will cause financial hardship for those who don’t see it coming. 

But that doesn’t have to be you. 

If you act soon, you can increase your options at retirement. In our third and final essay, we’ll explain the five steps you should start taking now to protect yourself.   

© Copyright 2018 Real Vision 

Author: Raoul Pal 

CEO and co-founder of Real Vision, Raoul Pal, is a Goldman Sachs alumni and ex-hedge fund manager from GLG, with over 27 years’ experience in the financial markets. Raoul also writes and publishes an elite macro-economic and investment service called Global Macro Investor (GMI) for the world’s leading hedge funds, pension funds, banks and sovereign wealth funds.

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Author: Raoul Pal 

CEO and co-founder of Real Vision, Raoul Pal, is a Goldman Sachs alumni and ex-hedge fund manager from GLG, with over 27 

years’ experience in the financial markets. .

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 The hard evidence suggests that the tsunami of retiring baby boomers 
 will have a massive and lasting negative impact on U.S. stocks. 

A 50% drop is very possible. 

This would slam the S&P 500 down to 1,350 and erase six years of returns: 

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Just like 2008, its going to be painful for investors who are unprepared. But for those of us who understand what’s coming, there’s a light at the end of the tunnel. 

 Big shifts create big opportunities, and this will be the biggest shift 
 of a generation. 

We're about to give you the five-step blueprint to protect yourself, and maybe even profit, as the retirement crisis unfolds. 

Whether you’re a boomer, a millennial, or somewhere in between, taking these five steps will be the key to preserving what you have. 

But first, we need to understand a little-known but crucial fact: most boomers can’t afford to retire.

Aside from today, the most dangerous levels of overvaluation in history occurred in 1999-2000. 
Many people refer to that era as the “dot-com bubble.” Like history’s most overpriced markets, it was ultimately crushed by an economic slowdown. 

In early 2001, the U.S. slipped into a recession. By 2002, the Nasdaq had plunged to 80%, wiping out millions of retirement accounts. 

Today, most people think the risk of a recession is small. They see the low unemployment rate and high stock market, and assume there’s no recession coming. 

This thinking is dangerously wrong

The U.S. is all but guaranteed to experience a recession soon. And this recession is all but guaranteed to cause a very painful drawdown in the stock market.

 You've seen Raoul's discussion of the inevitable recession, 
 but did you catch his chilling prediction? 

 The life savings that are in equities are going to get wiped out in one recession…  

COMING UP IN PART THREE...

 Raoul Pal, CEO and co-founder of Real Vision, explains the real truth 
 behind the accurate net worth the average baby boomer. 

If you take just one thing from today’s essay, please let it be this:

 The hard evidence  suggests that 
 the tsunami of retiring baby boomers 
 will have a massive and lasting 
 negative impact on U.S. stocks. 

A 50% drop is very possible. 

This would slam the S&P 500 down to 1,350 and erase six years of returns: 

 Raoul Pal, CEO and co- 
 founder of Real Vision, 
 explains the real 
 truth behind the accurate 
 net worth the average 
 baby boomer. 

 You've seen Raoul's 
 discussion of the inevitable 
 recession, but did you catch 
 his chilling prediction? 

 The life savings that are in equities are going to get wiped out in one recession…  

Just like 2008, its going to be painful for investors who are unprepared. But for those of us who understand what’s coming, there’s a light at the end of the tunnel. 

 Big shifts create big opportunities, 
 and this will be the biggest shift 
 of a generation. 

We're about to give you the five-step blueprint to protect yourself, and maybe even profit, as the retirement crisis unfolds. 

Whether you’re a boomer, a millennial, or somewhere in between, taking these five steps will be the key to preserving what you have. 

But first, we need to understand a little-known but crucial fact: most boomers can’t afford to retire.

 Raoul Pal, CEO and co- founder of 
 Real Vision, explains the 
 real truth behind the accurate net 
 worth the average baby boomer. 

WATCH RAOUL EXPOSE THE BIG LIE

WATCH RAOUL'S CHILLING PREDICTION