Investing doesn’t have to be complicated.

Simply own great companies…especially technology names.

2 key signals forecast strong gains for NASDAQ stocks.

Let’s be honest, clouds of uncertainty are everywhere you look. We’re facing:

The list goes on and on. Sounds complicated, right?

It doesn’t have to be. Focus where institutions are placing their bets and odds are you’ll grow your wealth… and ideally worry less.

At MAPsignals, our money-flow indicators have signaled healthy appetite for stocks for months. That’s kept our unpopular bullish message in play.

Today’s write-up offers 2 evidence-rich studies pointing to healthy gains ahead for the NASDAQ. The lagging group is getting an upgrade today.

If you’re like me and are hunting for positives in a sea of uncertainty, we’ve got you covered.

But first, let’s size up the money-flow landscape.

Working on Wall Street taught me to respect the flow of money. Handling countless equity orders for institutions revealed the ultimate power law in markets: supply and demand.

If demand outstrips supply, stocks have nowhere to go but up.

Our Big Money Index (BMI), which gauges unusual buy and sell pressure on thousands of stocks, has been steadily rising.

On a 3-year basis, you can see how it tends to lead markets when we reach extreme readings (overbought red line and oversold green line).

Currently, we’ve been cruising along in the mid-70s:

This is healthy action. However, we all know that stocks haven’t been climbing in a straight line. We’ve had a number of selloffs along the way.

This is where we find our first signal study on the NASDAQ.

Respecting the trend is paramount.

However, there are explicit capitulation signals to understand as well. These are some of the most powerful signals you’ll find anywhere.

The last notable selloff was in early August when the VIX exploded to over 38. We were front and center with our subscribers telling them to buy the dip.

One of the reasons was due to ETF liquidations. When investors dump ETFs, it often signals a near-term bottom is in play.

On October 5th, we logged 142 ETFs sold. This is one of the largest outflow days in recent years:

Now you may think this is old information. But you’d be wrong. These force-selling events act like a reset for markets. They often create a mega-uptrend for months and years later.

Here’s why this level of selling is bullish for the NASDAQ.

In our August liquidation piece, we highlighted the forward returns for both the S&P 500 and NASDAQ 100 post 125 or more ETFs sold since 2010.

I’ve updated the returns through yesterday. Whenever 125 or more ETFs are sold:

For those keeping score, since August 5th’s plunge, the NASDAQ has gained 13.4% in just over 2-months…we believe we are in the early innings of this signal.

And if this doesn’t get you excited, I’ve got another reason to own Tech stocks now.

It comes down to momentum. The month of September clocked a gain of 2.48% for the tech-heavy NASDAQ 100. This was the best September performance since 2013.

Turns out, strong Septembers are bullish omens for Q4.

Since 1984, the average gain for the NASDAQ in the months of October – December is a juicy 6.08%.

Not bad.

BUT whenever September gains at least 2%, the following 4th quarter climbs to 9.1%! Don’t fade strong September momentum:

Putting all this together, we’ve got a cocktail for solid gains into year-end. Use any potential October surprise weakness as a buying opportunity.

That’s how we stay ahead of the game at MAPsignals…follow the money into the best stocks.

Here’s the bottom line: Tech stocks have languished recently. But they’re ripe to climb soon.

We’re in the midst of an ETF liquidation oversold signal that lasts for months and years. Couple that with the evidence that big Septembers tend to see outsized outperformance in Q4…you’ve got a powerful backdrop to own growth stocks.

And the best news is MAPsignals finds the explosive high-quality opportunities loved by institutions.

Don’t follow the never-ending negative headlines.

Follow a map.

Right now, the NASDAQ is the destination.

If you’re a professional money manager, RIA, or are a serious investor, get started with a MAP PRO subscription today.

It’s a great way to navigate uncertainty!

Indices keep climbing. After posting a 26% total return last year, the S&P 500 is up another 20% YTD.

As this bull market has blossomed, leadership has really broadened out.

Here’s how to buy low at all-time highs.

This rally’s proven it’s not a one trick pony.

After underperforming in the first half, the S&P 500 Equal Weight Index rose 9.1% in Q3, easily besting the tech-heavy S&P 500’s 5.5% advance.

Whenever one sector cools off, another steps up to power the market’s next leg higher. This bullish rotational action keeps happening again and again.

We know it’s tempting to think that there’s nothing left to buy. All the good news must already be priced in by now, right?

Judging from Wall Street’s latest worry list, you’d certainly think so. It’s even longer than usual.

Popular scare stories include the recent flare-up in the Middle East, to the pace of Fed rate cuts, recession fears, high valuations, election uncertainty, and October’s weak seasonal track record.

The notion that “all the good news is already priced into stocks” sounds catchy but doesn’t really hold up.

Today we’ll show you five underappreciated, bullish macro tailwinds that signal new all-time highs loom.

Then we’ll show you three lagging sectors that offer the best bang for your buck as this broadening bull market just keeps on charging.

Let’s start with the recent spike in geopolitical risk in the Middle East. Most people think geopolitical flare ups are an obvious reason to sell stocks. This is understandable but ill-advised.

History shows major geopolitical scares typically don’t hold stocks back for more than a few weeks.

Iran bombed Israel on April 15. On April 29, we published Don’t Overreact to Geopolitical Headlines. After a brief sell-off, the S&P 500 was 3.6% higher a month later and 9.9% higher 3 months later.

We’ve analyzed 29 geopolitical events since 1940, ranging from wars to terrorist attacks to pandemics.

While the S&P 500 has averaged short-term losses of 1.4% and 0.9%, respectively, a week and a month after major geopolitical events, it hasn’t paid to cash out.

On average, the S&P 500 was up 1.6% three months after geopolitical events. Even better, the index chalks up 5.8% and 12.1% gains after six and 12 months, respectively, both of which are way above average.

Our #1 reason stocks can keep rallying is that geopolitical risk is highly unlikely to hold stocks back for long.

OK let’s shift gears and uncover other underappreciated macro equity tailwinds.

We know stocks follow earnings. Both keep hitting new all-time highs.

Lower short-term rates (controlled by the Fed) aren’t the only reason corporate profits are ramping.

A trifecta of under-acknowledged macro themes is also boosting earnings. These include dollar weakness and sharp falls in both energy prices and long-term interest rates (chart).

Note the 1Y returns for each of these benchmarks:

Let’s unpack why these three macro dynamics are positive for stocks.

We’ll start with the big drawdowns in long-term interest rates and oil prices – these are the 2nd and 3rd catalysts this bull market has further to run.

Many investors dismiss the bullish stimulative benefits of lower oil prices and long-term rates arguing their declines are harbingers of economic weakness.

While it’s true rates and oil usually decline in recessions, that’s not why they’re falling now.

Low oil prices are a function of excess supply, from the US, the world’s biggest oil producer, and OPEC+. Global demand has been very steady. Even geopolitical risk hasn’t been enough to keep crude from falling.

As for the collapse in long-term bond yields, that’s been a function of falling inflation, not weak economic growth. The latest Atlanta Fed GDP Now Q3 real GDP forecast stands at a healthy 3.1%. It’s been in the 2-3% range for months.

The reality is sharp drops in oil and long-term rates are a net positive for the economy, earnings and stocks.

And history says their stimulative benefits aren’t yet fully priced into stocks.

Check out this next chart.

Since 1980, the S&P 500 has averaged an 18.9% gain in the 12 months following 15%+ declines in oil prices and 10-year Treasury yields (chart).

This is in stark contrast to the 5.2% subdued returns for large caps when oil and rates have both gained 15%+:

Can this bullish situation get better? YES.

The 4th underappreciated macro catalyst this bull market isn’t over is persistent dollar weakness.

S&P 500 companies generate roughly 40% of their sales overseas, led by the tech and materials sectors with a whopping 58% and 56% respective international sales tallies (chart).

When the dollar falls, overseas sales and EPS are worth more when translated back into US dollars.

It’s no surprise the S&P 500 bull market started exactly when the greenback’s last bull market ended in October 2022. The Dollar Index is down 11% since with half that decline coming in the past 12 months.

Expect the dollar to remain soft as the Fed continues cutting rates, making greenbacks less attractive to global investors.

While other big central banks like the ECB, BOE and Bank of China are easing too, they started sooner and so have fewer rate cuts left to do.

Here’s the percentage of international revenues by S&P 500 sector:

Reason #5 this bull market isn’t over is investor positioning. At MAPsignals we’ve learned that positioning is key to stock performance. The big money watches it like a hawk.

It’s a contrarian indicator. When everyone’s bullish on something it’s time to lighten up because there’s no one left to buy. On the flip side, when everyone’s scared to death, it’s time to back up the truck.

Right now, the market’s huge run up and Wall Street’s long worry list, has investors hedging their bets. They’re crowding into low volatility stocks which are overrepresented in counter-cyclical sectors like utilities, staples, telecom and defensive corners of real estate.

Check out this chart.

High beta stocks normally outperform low volatility stocks by 2.5% in any given 6-month period because they tend to have faster long-term growth prospects vs low volatility names.

But right now, the opposite is happening. Low volatility stocks have outperformed high beta stocks by 8% over the past 6 months.

That’s a whopping 10.5% better than average (chart) and shows the crowd is cautious.

This defensive investor positioning is a bullish signal for the overall stock market.

When bull markets end, investors are tripping over each other and reaching for risk. The opposite is true today.

The crowd is nervous and positioned for bad news. They’ll be most surprised by better than feared news-flow and will be forced to chase stocks higher as that happens.

Defensive positioning signals the pain trade for stocks is higher.

Below shows how we are in the lower threshold tilted in favor of low vol equities. It’s paid to add risk when folks are crowding into safety areas:

Now, where can investors find appealing valuations?

Stay with me.

We’ve made the bullish macro case for stocks. Now let’s tackle portfolio construction.

The constant rotations markets have experienced this year is proof that hunting for underappreciated values is being rewarded.

With that in mind, we screened the market to see where investors can get the most bang for their buck.

The PE to growth (PE/G) ratio measures value for money. The PE/G ratio = 12MF PE / Forward EPS growth.

The holy grail is finding a sector with accelerating EPS growth and a forward P/E below its 12MF EPS growth rate. That produces a PEG ratio under 1.

It’s hard not to consistently outperform over the next 12 months when you buy sectors with PEGs <1.

Here’s why: Investors think the forward EPS forecasts are too high so they refuse to pay up, keeping valuations low.

But as the macro and sector news-flow continue to clear a low bar, coming in better than feared, the sector takes off as the crowd starts to believe the forward EPS are more realistic.

This dynamic generates significant alpha as the sector is re-rated higher.

The challenge in practice is that low PE/G ratios aren’t easy to find two years into a bull market.

The S&P 500 is up roughly 64% since its October 2022 intra-day bear market low of 3491.

Our analysis revealed only 3 sectors trading at a forward PE to growth ratio of less than 1.

Check out the table below.

The S&P Small Cap 600, the S&P Mid Cap 400 and the S&P 500 Health Care sector made the cut.

Sentiment surveys show most investors are still heavily underweight on all three.

Remember, you want to be where the puck is going, not where it is now.

As we constantly prove over and over again, there’s always opportunity under the surface. Plenty of small, mid, and healthcare names litter our Top 20 list.

When value areas are under institutional sponsorship, that’s a winning ticket.

Stocks have had an amazing run. Resist the natural urge to sell. Equities will be even higher by year-end.

The notion that “all the good news is already priced into stocks” sounds catchy but doesn’t really hold up.

Fed easing isn’t the only reason to like stocks. A bullish trifecta of less discussed, macro tailwinds including weakness in the dollar, oil and long-term rates will also keep boosting the economy, earnings and equities.

Defensive investor positioning is yet another underappreciated bullish signal for the stock market.

When bull markets end, investors are all bulled up and reaching for risk. The opposite is true today.

Lastly, history shows major geopolitical scares typically don’t hold stocks back for more than a few weeks.

The S&P Small Cap 600, the S&P Mid Cap 400 and the S&P 500 Health Care sector offer the best bang for your buck 2 years into this bull market with PEG ratios under 1.

If you want to find specific small cap, mid cap and all cap health care stocks ramping with Big Money support, get started with a MAPsignals PRO subscription. It’ll get you access to our portal that updates every morning, showcasing the exact tickers getting bought and their scores.

MAP your own stocks and ETFs. AND you’ll get our prized Top 20 list in your inbox every Tuesday!

There are plenty of winning stocks to pick up on sale before the next leg higher. If you’re a

Registered Investment Advisor (RIA) or are a serious investor, use a MAP to find them!

Invest well,

-Alec Young

Writing a dissertation can be one of the most challenging academic tasks you’ll encounter, but the right support can make all the difference. Are you feeling overwhelmed and unsure of where to start, or perhaps you’ve already begun but find yourself stuck? Don’t worry—you’re not alone. Many students seek dissertation writing help at some point, and finding the right resources can lead to a successful and rewarding outcome. In this post, I’ll share some key insights on how to get effective dissertation support and what you should consider when choosing assistance.

First, it’s important to recognize the type of help you need. Some students struggle with the initial planning and structuring of their dissertation, while others may have difficulties with research, analysis, or writing up findings. Understanding your specific needs allows you to seek targeted assistance, whether it’s through academic advisors, online resources, or professional dissertation writing services. Academic advisors are often the best starting point; they can provide guidance on developing a research question, choosing a methodology, and structuring your chapters. However, for more specialized help, you may want to look for expert services that offer one-on-one coaching or comprehensive writing support.

Another effective option is joining online forums and communities where students discuss their dissertation journeys and share resources. Engaging with other students who are also working on their dissertations can provide both practical advice and emotional support. Some online communities even offer peer review systems where students can give and receive feedback on each other’s work. Alternatively, if you prefer expert guidance, there are numerous professional services available that provide dissertation writing help tailored to your specific subject and requirements. When selecting a service, look for one that offers a transparent process, experienced writers in your field, and a proven track record of successful outcomes.

Lastly, remember that while seeking help is important, maintaining your own academic integrity is crucial. It’s essential to use any assistance as a learning tool rather than relying on it solely to complete your dissertation. Many services offer coaching sessions and editing support that help you develop your skills rather than doing the work for you. Utilizing these resources can not only improve your dissertation but also enhance your overall academic abilities. With the right approach and support, you can turn the dissertation writing process from a stressful task into a valuable learning experience that prepares you for future academic and professional challenges.

Writing a dissertation can be one of the most challenging academic tasks you’ll encounter, but the right support can make all the difference. Are you feeling overwhelmed and unsure of where to start, or perhaps you’ve already begun but find yourself stuck? Don’t worry—you’re not alone. Many students seek dissertation writing help at some point, and finding the right resources can lead to a successful and rewarding outcome. In this post, I’ll share some key insights on how to get effective dissertation support and what you should consider when choosing assistance.

First, it’s important to recognize the type of help you need. Some students struggle with the initial planning and structuring of their dissertation, while others may have difficulties with research, analysis, or writing up findings. Understanding your specific needs allows you to seek targeted assistance, whether it’s through academic advisors, online resources, or professional dissertation writing services. Academic advisors are often the best starting point; they can provide guidance on developing a research question, choosing a methodology, and structuring your chapters. However, for more specialized help, you may want to look for expert services that offer one-on-one coaching or comprehensive writing support.

Another effective option is joining online forums and communities where students discuss their dissertation journeys and share resources. Engaging with other students who are also working on their dissertations can provide both practical advice and emotional support. Some online communities even offer peer review systems where students can give and receive feedback on each other’s work. Alternatively, if you prefer expert guidance, there are numerous professional services available that provide dissertation writing help tailored to your specific subject and requirements. When selecting a service, look for one that offers a transparent process, experienced writers in your field, and a proven track record of successful outcomes.

Lastly, remember that while seeking help is important, maintaining your own academic integrity is crucial. It’s essential to use any assistance as a learning tool rather than relying on it solely to complete your dissertation. Many services offer coaching sessions and editing support that help you develop your skills rather than doing the work for you. Utilizing these resources can not only improve your dissertation but also enhance your overall academic abilities. With the right approach and support, you can turn the dissertation writing process from a stressful task into a valuable learning experience that prepares you for future academic and professional challenges.

October brings falling leaves, pumpkins, and spooky Halloween.

It’s a season of change.

The same goes for election years in the stock market.

Here’s your 2024 October surprise playbook.

The term October surprise dates back to the 19th century as presidential elections routinely experienced unexpected events heading into November.

Recent notable October surprises include:

Could there be an October surprise in 2024? My vote is yes.

Whether or not October surprises influence elections is up for debate. What isn’t, though, are the powerful patterns that exist in stocks in the 10th month of the year.

Today we’ll revisit a powerful election study we showcased months ago highlighting the spooky returns typical of October.

We’ll take it a step further, unmasking how you can play this setup to your advantage.

Don’t get scared if 2024 brings an October surprise.

Get prepared!

In our ultimate election year playbook, history revealed how stocks tend to sputter in September and October heading into the vote.

While September closed up 2%, the best since 2013, don’t forget about the big 4% drop to begin the month. 2024 has seen massive performance of +20.8% with 3 notable setbacks along the way:

Now that October is here, don’t expect smooth sailing. Since 1928, election year Octobers see the S&P 500 drop .3%.

While there is no guarantee what the future holds, don’t be surprised if October brings equity weakness:

We’ve been on record voicing how you’ll want to buy any pre-election dips. When you slice up October election year performance, a powerful pattern emerges.

Turns out, the brunt of October weakness hits in the first half from October 1st through 15th. Check this out.

Analyzing election year Octobers since 1988, the first half sees the S&P 500 drag 2.83% before firming up in the back half.

Additionally, this anomaly can be seen in both the tech-heavy NASDAQ 100 as well as the small-cap Russell 2000.

Importantly, bumpy Octobers pave the way to jumpy Novembers and Decembers:

Hopefully your eyes are zeroing in on the powerful setup. October dips tee up big rips…especially for small-cap stocks.

The average 7.3% surge in the Russell 2000 in November and December of election years only reinforces our overweight stance in smaller capitalized firms into next year.

And our unique Big Money lens agrees. Our Big Money Index (BMI) continues to break higher week after week, highlighting institutional sponsorship of small- and mid-caps…

The past 4 weeks of money flows shows heavy appetite for smaller cap companies with 81% of buys targeting market caps below $50 billion:

And to be clear, off-the-run small- and mid-cap stocks have been beaming all year in our data. When you dive below the surface, we find all sorts of single stock stories working.

One example is Allison Transmission Holdings (ALSN). With a rock-solid MAP Score of 79.3, indicating healthy institutional support alongside favorable forward earnings growth, that’s the go signal.

Below showcases how ALSN has made our rare Top 20 list 6 times this year. Typically, we find recurring inflows power stocks higher and higher.

That’s the stairway to heaven that all great equities exhibit:

For me, the playbook is simple.

Election mudslinging is well underway. Expect an October surprise to jitter markets.

But don’t get spooked out of stocks. Instead, strap on the helmet and buy any pre-election dip that typically emerges in the first half of October.

Focus on off-the-run stocks that the media doesn’t cover. That’s where institutional investors find alpha.

Beginning in November, the bearish costumes often fall to the wayside and markets begin a swift recovery.

Don’t follow the headlines…follow the money.

Get a MAP!

Here’s the bottom line: October surprises date back to the 1800s. Heading into presidential elections, unexpected events routinely surface out of the blue.

Just don’t let these surprises spook you out of stocks.

History shows that early October weakness is met with back-end October stabilization. Furthermore, November kicks off bullish season for equities.

If you’re like me and want to kick start your portfolio during this spooky period for markets, get hedge fund quality research with our MAP PRO subscription.

Not only will you learn what truly moves markets and stocks… money flows…

You’ll also find under-the-radar stocks loved by institutions.

That’s the October surprise your portfolio will thank you for!

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For years now, a popular mantra has been cash is king.

Wealthy households poured into money markets at a breakneck pace.

We are now witnessing the unfolding. The trillion-dollar money market bubble is set to unwind.

That’s the conversation I envision many financial advisors (FAs) were having back in 2022 as yields surged.

As interest rates climbed, the allure of high-yielding cash not only made sense, but also good fortune. Earning a risk-free 5%+ return has been a boon!

But as they say, all good things must end…ushering in waves of change.

As interest rates are now finally on the decline, well-to-do investors face a looming dilemma…where to redirect this cash hoard that’s losing its luster day by day.

Today, I’ll reveal startling stats on the growth of money market assets. We’ll cover which areas suffered during this monster crowd-chase, and ultimately make the case for the beneficiary of the latest trillion-dollar migration that’s coming.

…and there’s evidence this money wheel is already in motion.

### Trillion-Dollar Money Market Bubble is Set to Unwind

Econ 101 taught us the power of supply and demand.

When income-starved investors are greeted with a new-found cash stream, they pounce.

You can see how from Q1 2022 to Q2 2024, total money market assets climbed from $5.1 trillion to $6.5 trillion:

When we zoom in, we can clearly understand how the rise in rates correlated with the increase in money market asset demand.

The call from FAs to start the money migration back in 2022 was met in full force:

This week I took the liberty to break down the massive money market bubble by wealth percentiles.

Specifically, I wanted to learn which strata of earners were mostly responsible for the big capital influx into MMs.

For this exercise, I bucketed money market assets into 4 wealth groups:

Each of these wealth groups vary based on the state you reside in. But a good idea for a 1% earner is those making well north of $500k per year.

The top 10% bucket are typically the 6-figure crowd.

It should be no surprise that wealthy investors are responsible for the lions’ share of money market asset growth.

Check this out. As of Q2 2024, the top 1% of households controlled 35.3% of MM assets. The 2nd tier, 90-99th percentile made up just over 41% of the total pie.

For those keeping score, that’s 76% of household MM assets. But what is striking is the growth of cash assets from each cohort.

The top 10% of households were responsible for 80% of the money market asset growth as just over $1 Trillion.

This is the wealth transfer that’s building up a lot of potential energy soon to be put to work elsewhere.

When one asset class thrives, another suffers.

Notice that beginning January 2022 through June 2024, popular income-equities massively underperformed, indicating dividend stocks were funding the explosion in money markets.

From 2022 – June 2024, the S&P gained 18.79%. Under the surface saw incredible underperformance from dividend sectors:

Back in June, we were early in suggesting a monster reversion trade was coming. After the June CPI cemented the case for the Fed to finally start cutting rates, a violent money wave was set in motion.

Small-caps rips. Breadth improved.

But also hidden under the surface was a monumental money-shift into dividend-oriented equities.

Using the same framework as above let’s look at the sector performances since July. That’s when the money migration was set in motion.

From July 1st – September 25th:

Without question, money market assets are searching for a new home as rates fall. Odds are now calling for Fed Funds rates to reach a 3-handle in a year+.

Now I’m imagining FAs making this call to their clients.

And my recent FA channel checks suggest this is the case. Of course, there are other income alternatives to mention like munis and corporates…those do have a place for specific investors.

But last I checked, Warren Buffett didn’t get rich off munis!

Seriously though, the biggest prize resides in owning all-star companies that have wonderful businesses, high profit-margins, and consistent dividend growth.

That’s the holy grail of investing as far as I’m concerned. Don’t focus on the highest yielding stocks…those yields won’t keep up.

Instead focus on compounders. That’s the ticket.

And the other evidence that this money wheel is rolling is by looking at the Big Money Index (BMI). It’s ramping as plenty of high-quality income stocks are benefiting from the trillion-dollar money wave:

Calls are happening all over the country right now. Cash is no longer king.

Hopefully you see the call in front of you today.

There’s a cash bubble. Those assets are searching for a new home. Elite dividend growth stocks are prime beneficiaries in 2025.

That’s why we released an all-star 32 stock report focused exclusively on this theme. MAP PRO subscribers can find it here.

Don’t wait for the media to blow the bullhorn on dividend stocks…you’ll miss the boat.

Just follow the money…and it’s already in motion.

Here’s the bottom line: Wealthy investors have a looming choice. The trillion-dollar money market bubble is set to unwind.

Dividend stocks were abandoned as the thirst for yield gathered steam.

The evidence highlights how this crowded trade is reversing course. Dividend areas are rerating by the week.

2025 is setting up to be a monumental year for high quality superstar dividend growth stocks.

The call to consider other income alternatives is in motion. Now’s a wonderful time to take advantage of one of the biggest themes we are witnessing.

If you’re a serious investor, money manager, or RIA – kickstart your research with a MAP PRO subscription. Follow the money-shift in real-time.

And get your hands on our latest 32-stock report, highlighting stocks that are set to thrive with this new money-flow tailwind.

Don’t follow the news. Follow the money with a MAP!

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Let’s discuss the huge money-elephant in the room.

Millions of investors hiding in money market funds are about to see their income fall in a big way.

With the Fed finally cutting rates, yield hungry investors will have to work harder to generate income.

Today, we’ll show you why now’s the time to buy dividend growth stocks as the Fed cuts interest rates. Then we’ll show you how to maximize the theme with timely ETFs and sectors.

And the income rotation is already underway.

There’s a record $6.3 trillion crowding in money market funds amid the lure of 5% risk-free returns (chart).

But the Fed funds futures market predicts money market yields will fall to just 3% by the end of 2025.

Bond funds aren’t the answer. While bonds generate big capital gains as yields fall, that’s already happened. Yields on short, medium and long-term bond funds are all down big in anticipation of Fed easing.

By contrast, dividend strategies still have plenty of upside. It’s no surprise dividend paying S&P 500 stocks are up 14.5% vs. only 8.1% for non-payers YTD.

Since the great rotation that began on 7/11/24, dividend-yielding S&P stocks are up 8.4% vs just 5.2% for non-payers. Even more striking is the fact that stocks with a 3% yield or higher have gained 10.9% in the same period.

The pivot to dividend stocks is money in motion. It’s only a matter of time before the crowd recognizes that money-market rates are a sinking ship:

Once large income shortfalls hit money market investors…they’ll be hunting for an income-generating alternative.

Albert Einstein once described compound interest as the “eighth wonder of the world.” He was 100% right.

How else could low single digit stock dividends account for a stunning 37% of the market’s long-term returns (chart)?

Since 1930, the S&P 500 has returned only 6.6% a year excluding dividends vs. 9.8% with those payouts reinvested.

Below you can see how reinvesting growing dividend payouts has helped equity returns over time:

Let’s face it, dividends make a huge difference!

Dividend growth explains the outsized impact of equity income on long-term stock performance.

The ability of high-quality companies to reliably grow their payouts year-in and year-out takes the “compounding” effect Einstein referenced to the next level.

You’re not reinvesting the same amount every year. The annual growth of your reinvested payouts supercharges long-term compounding.

Since 2000, S&P 500 dividends have more than quadrupled from $139B to $588B in 2023 (chart).

That equates to 6.8% annual income growth. It doesn’t take much annual growth to generate huge long-term gains.

Better yet, despite record payouts, the S&P’s payout ratio – the percentage of profits its constituents use to cover dividends – is still only 35%, well below its 50% long-run average. That leaves lots of room for future dividend appreciation!

Let’s shift gears. Growing dividends in a falling rate environment isn’t the only reason to like dividend growth stocks.

Volatility hasn’t been a huge problem this year. Stocks are doing great as the rally broadens out.

Even with all the recession and election handwringing, market drawdowns have been short and sweet.

But investor surveys consistently show market volatility as the #1 reason they shy away from stocks.

Here too, dividends can help. Check out this next chart.

Since 1990, companies with the financial strength to grow their dividends outperformed during volatile markets.

The $VIX is the leading gauge for measuring S&P 500 volatility.

In all months when the VIX Index increased, dividend growers beat non-dividend paying stocks by an average of 1.06%.

Even better, the more volatility rises, the more dividend growth stocks outperform.

In months when the VIX rose over 20%, dividend payers outperformed by 2.06%.

Holding dividend growth stocks can enhance performance whenever volatility rears its ugly head:

We’ve made the macro case for dividend growth stocks. Now, let’s tackle portfolio construction.

We know big yields are tempting, but oftentimes, a high dividend yield signals distress. The payout may be high because the company’s shares have either fallen due to poor fundamentals, or it’s the only way to entice investors to buy the stock, or both. Think CVS ($CVS), Walgreens ($WBA) or AT&T ($T), ouch!!

Either way, it’s a head fake and that juicy yield is often wiped out by a few months of capital losses.

It’s no surprise dividend growth strategies consistently outperform their high dividend yield counterparts (chart).

The bottom line is quality matters. Dividend growth stocks have a return on equity of 27% vs. only 17% for high dividend stocks. It’s impossible to consistently grow your dividend without impressive financial strength. Over time, that beats high, but iffy, yields.

Vanguard’s $100B Dividend Appreciation ETF, VIG, tracks S&P’s Dividend Growers Index which requires 10 years of dividend growth for inclusion. VIG yields 1.9% and sports a rock-bottom 0.06% expense ratio.

VIG’s 64 MAPsignals’ map score shows accelerating institutional buying without being anywhere near overbought (think 80+).

By contrast, our ETF rank for the smaller, $72B Vanguard High Dividend Yield ETF, VYM, also a category leader, is only 61.

VIG’s more cyclical sector allocation is yet another reason to favor dividend growth over high yields (chart).

Regular readers know we’re bullish on stocks because we believe a soft landing is in the cards.

Cyclical sectors have been held back by relentless recession worries. As the economy continues to hold up, expect cyclicals to reassert their leadership.

As for defensives, if the economy dodges recession and the Fed isn’t forced to cut rates far more than currently expected, expect these rate sensitive sectors to fade fast as interest rate declines slow.

Dividend growth is better positioned for an economic soft landing thanks to its greater exposure to the growthy tech and health care (think biotech & medical devices) sectors, coupled with lower allocations to defensive utilities and the sickly energy patch.

Note that, over the last decade, energy is the worst performing S&P 500 sector with only a 3.3% annualized return. Utilities have also underperformed the S&P 500’s 12.9% gain, chalking up just 9.1% annualized gains.

Make sure to get access to our Top 32 list of dividend-growth stocks for 2025 only for MAP PRO members. Subscribe and be prepared for what we believe is a big portfolio reweighting towards dividend-rich companies next year.

Let’s wrap up.

Bringing It All Together

Fed rate cuts are bullish for dividend growth stocks as money market yields finally start falling.

Meanwhile, bond yields have already collapsed in anticipation of Fed easing, reducing bond funds’ income appeal.

Plus, dividend growth not only cushions stocks when volatility rises, reinvested dividends contribute a surprisingly high 37% of the stock market’s long-term gains.

The dividend “sweet spot” isn’t risky, sky-high yields. It’s high-quality stocks with 1.5%-3.5% yields and strong track records of doubling their payouts at least every decade.

Many such dividend growers live in the S&P 500, whose dividends have more than quadrupled from 2000 through 2023. Healthy corporate balance sheets and low payout ratios mean more dividend hikes loom.

If the economy dodges recession as we expect, and the Fed isn’t forced to cut rates far more than currently anticipated, expect the huge rip in defensive sectors to fade fast as interest rate declines slow.

Dividend growth is better positioned for a soft landing than defensive leaning, high yield dividend strategies.

It has a much larger 40% combined weight in the growthy tech and health care sectors, coupled with far lower allocations to counter-cyclical utilities and the sickly energy patch.

VIG brings it all together, offering a convenient, low-cost way to target this timely theme. And our ranking process agrees!

So just sit back and let compounding do the rest. And remember, dividend growth is the best cure for falling rates and any future market volatility.

Lastly, there are great stocks positioned well for this money in motion theme. If you want our latest star-studded list of 32 companies loved my institutions, get started with a MAP PRO subscription today.

Invest well,

Alec Young

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