Dear Reader,

The ongoing market pullback has officially sent the S&P 500 into bear market territory.

The most recent inflation reading, as measured by the Consumer Price Index (CPI), is officially 8.6%. Put another way, our money is now worth 8.6% less than it was 12 months ago.

The sad truth is that real inflation figures are likely much higher. For instance, the latest figures from the CPI tell us that the cost of housing has increased by 5.4% year-over-year.

Yet we’re currently in one of the hottest housing markets in recent memory. We’ve all seen housing prices soar over the past two years. Do we really believe that the cost of housing has only increased 5.4%? Absolutely not.

Sadly, I predict inflation will continue to eat away at the value of our capital for years to come.

We’re feeling the effects every time we fill up our gas tanks… buy groceries… or even when considering whether or not to place our capital into new investments.

With the potential for more aggressive interest-rate hikes and rising inflation, it makes sense to approach this market with caution. So, the natural question is… Where should investors turn next?

Today, I’d like to propose a unique strategy that I’ve never shared before. It’s a way to “lock in” returns in advance. It’s an investment strategy that I call “mandated money.”

The Next Step for Careful Investors

It may surprise readers to know, but I’ve long been a fan of income investing. I’ve even always liked tax-free municipal bonds… And not fancy bonds linked to things like golf courses, but those related to critical infrastructure like water and sewer projects.

When we’re seeing volatility like this, there’s comfort in knowing our capital is secure and we can expect a steady stream of income. And the upside of rising rates is that fixed-income investments are now becoming more attractive for the first time in years.

As a colleague wrote to me recently, “When the market is crashing, I know all I have to do is sit back and collect my check every six months.”

Behind the scenes, my team and I have been actively investigating new income strategies for my readers. And what we’ve seen so far is very encouraging. As just one example, some of the opportunities for convertible bonds from large, well-established companies are unlike anything we’ve seen in years.

I plan to discuss this topic more in future issues of The Bleeding Edge. But the strategy I’d like to discuss today has nothing to do with bonds, CDs, or dividend-paying stocks.

In many ways, this strategy has the security of fixed-income, with the upside potential of small-capitalization stocks. And these investments can be found in one corner of the initial public offering (IPO) market.

“Mandated Money”

Over the last decade, we saw a series of major milestones for the public markets. Record levels of investment capital found their way into hundreds of promising startups.

With record-low interest rates and an influx of private funds looking to bring the next Amazon-like deal public, we saw investment banks willing to underwrite the most promising IPOs of the last decade.

And 2021 was a banner year for tech IPOs. Over 951 tech companies accessed the public markets last year… a record-setting number.

But even more interesting, there was an emerging investment vehicle that allowed companies to reach public markets without all the usual red tape and expense associated with a traditional IPO. And it’s here where we will find “mandated money” investments.

This is a strategy that allows investors to invest in the most exciting private companies – before they go public.

And they have special safeguards in place for investors. These investments grant us the contractual right to get our money back within a set timeframe. Even more interesting, in some situations, these investments allow us to lock in returns in advance.

That’s the key to these deals – what I like to call “Mandated Money” deals.

Further, these deals provide a path for early investors to gain exposure to many of the other tech trends I follow across my investment research products. I believe they are key to keeping investors’ capital protected during this volatility.

So on Wednesday, June 22, at 8 P.M. ET, I’m going to explain why we should pay special attention to these opportunities…

It’s all happening at my special event. You can sign up for it right here. I hope to see you there.


Jeff Brown
Editor, The Bleeding Edge

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