The Trump presidency has been nothing if unpredictable. The President seems to wake up with new tweets on his mind every day, and the markets love overreacting to every one.
The result is a stunning whip shaw effect of large market moves up and down, often during the same day. This morning, U.S. Trade representatives said that the new tariffs Trump announced in a tweet on August 1 would be delayed. Some tariffs will be delayed until September 1 and others until December.
Does that mean that progress is being made on a trade deal? Only the President knows, although he doesn’t really know either. Depending on how talk show hosts talk over the next few weeks, and what he advisors say, he may or may not think he is getting a good deal.
Or getting credit for a good deal.
Or maybe just get bored.
Long-Term Diversified Portfolio
Every financial planner eventually gets tired of beating this drum, but the answer is always the same. A long-term, well-balanced, risk adjusted, annually rebalanced portfolio is the solution to the dramatic, unpredictable moves of the market.
Sooner or later, this market will roll over. Although, the tons of analysts “predicting” it now have no idea how or when that will happen, just like always. Someone will get lucky and publish an analysis calling for a market correction close enough to the actual event to use it in advertising and “news” articles for the next decade. However, don’t forget that big-name and small-name analysts form every major firm and publication have been writing those exact same articles for over two years now. No one is predicting anything other than something that is inevitable will inevitably happen.
Remember, every early prediction that pulls your money out of the market costs you as much, and often more, as not pulling your money out at all.
Buying all of those dips with regular investments into your diversified portfolio would have made you a fortune, while pulling out because of all those analysts and their indicators would have you missing out. Just because they’ll be “right” eventually, doesn’t mean you should listen to them now.
In the meantime, enjoy your China trade drama. I’ll watch this month’s investments flow into my portfolio of index funds (weighted for value at this point, because… I mean, come on!)