A key market indicator was just triggered.
In a recent report about it, The Wall Street Journal wrote that we’re “headed for a record…”
Every time this happened in the past, investors made a fortune.
But this time around, you could make a fortune…
In fact, our forecasts show that you could earn gains of 1,000% or more…
Two Ways To Grow
Before I tell you what market The Journal is referring to (perhaps surprisingly, it has nothing to do with stocks, bonds, or cryptos), let me explain why it’s headed for a record.
It has to do with the basic but fascinating way that big companies grow.
You see, when an established company wants to grow bigger or better, it has two options:
Option #1 — It can grow “organically” by building up its operations over time, increasing its sales & marketing efforts, etc. — or…
Option #2 — It can grow quickly by buying up other companies.
Today, we’re going to focus on Option #2 — the strategy of acquiring other companies.
This strategy is known as Mergers & Acquisitions (M&A)…
And as you’ll see in a moment, it can lead investors like you to earn huge returns.
Headed for a Record
Companies are always looking to grow, so there’s always some base level of M&A.
But once in a blue moon, M&A activity goes off the charts. And if you know how to take advantage of it, you could make a fortune.
Well, as it turns out, we’re in one of those rare times right now:
The Wall Street Journal reported that the “M&A market is zooming into record territory…”
And The New York Times announced that a record $2.5 trillion in M&A deals have been announced in the first half of 2018. That’s up 57% from the same period last year.
If this pace continues, the full-year number will reach $4.8 trillion. That would beat the all-time record of $4.3 trillion set in 2007, as well as the prior record of $3.3 trillion set in 2000.
There are three main catalysts behind this jump in M&A activity.
Let’s take a quick look at each of them…
Three Catalysts for Record M&A
Any of the following catalysts could cause a flurry of M&A activity…
But when they happen at the same time — as they are right now — M&A activity skyrockets.
That’s why Susie Scher, a senior executive at Goldman Sachs, calls this a “Goldilocks environment.”
Catalyst #1 — Low Interest Rates
When interest rates are low, corporate buyers can borrow money cheaply.
This gives them billions of dollars to spend on M&A deals.
For example, in 2017, during the last M&A boom, the “Federal Funds Rate” was in the 5% range — that meant money was cheap to borrow.
But today, that rate is even lower: it’s recently been between 1.5% to 2%.
The thing is, the Fed has already hiked interest rates twice this year, and it intends to raise them twice more. That’s why companies are so focused on M&A right now:
They know rates are going up — and their easy access to capital will soon disappear.
Catalyst #2 — Record-High Stock Prices
Instead of paying cash to fund M&A, companies often pay with their own stock. This strategy is particularly effective when the stock market is at high levels.
For example, in 2000, Pfizer (NYSE: PFE) acquired Warner-Lambert, the maker of Lipitor, for $89 billion. But Pfizer didn’t pay in cash… instead, it gave Warner-Lambert shareholders Pfizer stock.
Makes sense: in 2000, the stock market was at a record high. In fact, Pfizer was trading at about $45 — an all-time high it never hit again. By taking advantage of its sky-high stock price, Pfizer saved itself billions of dollars.
And today, with the stock market at new all-time highs, companies are once again leveraging their richly-priced shares for M&A.
Catalyst #3 — The Domino Effect
There’s nothing like one big “marquee” acquisition to ignite more acquisitions — it’s like a domino effect.
As soon as one massive deal gets announced, other companies feel compelled to make similar moves. They don’t want to get left behind.
For example, in 1999, Yahoo bought GeoCities for $3.6 billion, and acquired Broadcast.com for $5.7 billion. All of a sudden, the domino effect took over and M&A went through the roof. That’s why, in 2000, at the height of merger-mania, AOL bought Time Warner for $160 billion.
The same thing happened in 2007. For example, first, wireless service provider Alltell was acquired for $27.5 billion — then, MetroPCS bid $7 billion for Leap Wireless; Vivendi offered $6.4 billion for Neuf Cegetel; VimpelCom bought Golden Telecom for $4.2 billion; etc etc.
And the same thing is happening right now…
AT&T just bought Time Warner for $85 billion. As Time Magazine reported, this could “pave the way to further consolidation…” — in other words, more M&A!
So, now that you understand why 2018’s “Goldilocks” environment is leading to a record year for M&A, let me tell you how to take advantage of it…
Making Money from M&A
To make money from this wave of M&A, you need to know which types of companies will get acquired.
Now, when most people read the last sentence, they think they need to be in the right stocks. But here’s the thing…
The vast majority of M&A deals aren’t for publicly traded stock…
According to Capital IQ, 95% of takeovers are for private startups — startups like GeoCities and Broadcast.com.
And these are the opportunities that make investors a fortune.
For example, we once told our readers about a startup called Cruise Automation. Cruise builds software for self-driving cars…
Well, just six months after we wrote about it, General Motors (NYSE: GE) stepped in and acquired Cruise for $1 billion… and early investors made 1,000% gains.
And now, because of today’s M&A bull market, we believe more deals like that are just around the corner.
Capture Your Share of this M&A Boom
You probably missed out on the M&A booms of 2000 and 2007.
That’s because, up until recently, the U.S. government prohibited all but its wealthiest citizens from investing in private companies.
But thanks to new legislation called the JOBS Act, you won’t miss out on this boom!
To get started, we recommend diving into the startups listed on our Deals page here »
These startups are currently accepting investors like you…
And in today’s market, any one of them could soon get acquired — and make investors like you a fortune.