The financial markets have been rattled by tariffs. As investors, we reserve judgement on policy and seek to interpret economic impacts on companies we might invest in. We have to assume that tariffs, in some form, will go into effect. A pickup in inflation and lower economic growth is on the table. The impact of this uncertainty is bearish for stocks. The only certainties are that economic and market risk is high, we are in an extremely dynamic situation, and there will be rarely-seen investment opportunities.
As the credit (bond) markets often foretell economic deterioration, when the warnings appeared, we took action. At the end of March, we reduced holdings of more vulnerable sectors in our strategies, like tech and mega-cap stocks. Then when the S&P 500 Index® failed to hold its 200-day moving average (known as a “death cross”), we again took some stock exposure off the table.
Market volatility spikes like this are likely to prove short-lived. When it does settle, we are in position to reinvest parked cash with a constructive long-term perspective. While stocks are random in the short term, they always reward investors over longer periods of time.
Our clients take comfort in knowing that they have truly diversified portfolios. We insulate projected spending for the next few years from market gyrations, so the bulk of investments can remain in stocks for many years to capture gains. So, whether we see a bear market or even an economic recession, our clients are able to continue living life as normal.
Call us today to learn how we can help. 404-941-2800
