Americans are being betrayed by their own government.
Never in our 237 years as a country have 12 faceless bureaucrats had so much control over our wealth.
You see, these bureaucrats, along with their leader -- in the blink of an eye -- could soon be responsible for one of the worst market crashes in history.
So what market do I think is about to take one of the biggest hits in a century?
When Federal Reserve Chairman Ben Bernanke and the 12 voting members of the Federal Reserve Board meet in late October, there is a very real possibility they'll vote to taper the $85-billion-a-month bond-buying program, or quantitative easing (QE), that's helped boost the market.
Just look at how much the iShares Barclays Aggregate Bond Fund (NYSE: AGG), which tracks the bond market, popped when the first round of QE got started, and just what the hint of it ending QE has done to it:
I know many of you are probably reading this and thinking, "I don't have much in bonds; I should be OK." Well, when the bond market crashes, it's going to send a ripple through the stock market that will touch every single American.
And here's the worst part: Bonds have been in a bull market for over 30 years. This has lulled investors into complacency. It's not like it's being talked about around the water cooler.
So just like in 2008, few individual investors see this coming.
But don't just take my word for it... look at what MarketWatch said recently:
"Why are investors complacent? Because 'the public thinks bonds are safe, but they're not. ... Bonds are a big problem, and most people don't understand that yet,' according to Harry Clark, chief executive of Clark Capital Management. Deep down, the public has a vivid memory of the $10 trillion in market value lost on Wall Street in the 2008 collapse. But after four years of being lulled into feeling safe in bonds, 'they have no idea what's about to happen to them.'
"Listen to the warnings. Start planning now. You have no excuse. Something big is 'about to happen,' and you are not going to like it." (emphasis added)
But I have a plan to make sure investors are prepared for the inevitable.
This plan is designed to insulate you from the entire boom-bust stock market cycle. We operate under one rule: DO NOT LOSE MONEY.
And we forget trying to "time the market" -- which actually means we stop trying to pick tops and bottoms, chase trends, and compete with hedge fund experts.
Instead, we look for high-quality investments that pay a high dividend... and they must have a track record of bouncing back from market crashes.
High quality investments return to -- and surpass -- their pre-crash price over time. Low-quality investments usually hang around the bottom and are seldom heard from again.
Which brings up the question: If we're not chasing the trend, what do we do if the market goes down? I'm sure you've heard the maxim "You don't take a loss unless you sell." Small comfort for most investors... but it's actually exciting if you're an income investor.
Because, since you bought high-quality investments, you're confident they'll rebound from a crash. That's what happened to the Dow Jones Industrial Average during the biggest financial crisis of our generation.
It bounced back. And it even went on to make new record highs:
But during the crash, too many investors panicked and sold. Yet that only locked in their losses. And afterward, many stayed on the sidelines, afraid to re-enter the market when stocks rallied back -- which means they made their losses permanent.
Chasing trends, investing for gains, and worrying about losses is not how High-Yield Investing, my premium newsletter, makes its money. If you have a quality investment, it has an excellent chance of rebounding. Why sell when it takes a dip, if it will regain its value?
Especially if it continues to do its job... which is to pay you an increasing income.