As regular readers of our premium Half-Priced Stocks newsletter are aware, we have had a bearish outlook for domestic equities for the past several months.

Though corporate profitability remains healthy, the impact of sixteen consecutive rate hikes is beginning to clamp down on economic growth, and rising inflationary pressures have alarmed investors and sparked widespread equity market sell-offs around the world.

Aside from the troubling macroeconomic fundamentals underpinning the market, the current bull market has now extended into its 44th month -- considerably longer than the typical up cycle usually lasts. Since bottoming out in October 2002, the Nasdaq Composite has soared +82%. Meanwhile, the Dow Jones Industrial Average and S&P 500 have delivered impressive gains of approximately +45% and +54%, respectively.

If nothing else, stocks may need some time to catch their breath after this sharp advance.

However, history has taught us that the markets seldom move up (or down) in straight lines. And given the strong run-up over the last four years, the risk/reward dynamics currently favor a more defensive posture.

When the next bear market finally does arrive, it is important to be prepared for greater volatility. However, we are not suggesting that you need to liquidate your holdings and hide the proceeds under a mattress until the storm has passed -- only that you make your portfolio as watertight as possible.

In the "Feature Article" section of our next issue of Half-Priced Stocks, we will outline a number of proven strategies to help you profit from today's volatile market. By taking action now, you can make your portfolio as rock-solid as possible, and you should be able to post continued gains even if the overall market heads south.

Meanwhile, in our next "Industry Spotlight" article, we will zoom in on the shipping industry. All goods have to get from point 'A' to point 'B', and ocean-going tankers are an often overlooked link in the supply chain. In our next issue we will examine some of the strongest players in the space -- companies that churn out steady cash flows and offer generous dividend yields of up to 18%. Best of all, with the industry stuck in a cyclical downtrend for over a year, many shipping stocks are now trading 40% or more below their highs. As a result, there are many excellent bargains to be had -- several firms in this group are now selling at a steep discount to their fair value.

Stay tuned . . .

Thanks for reading!

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