Last week we said the first quarter had gone out with a bang. We guess the 2nd quarter didn’t want to be outdone, and this week has been a doozy. We’re going to focus on these issues below.
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Brad McMillan gives his update for the first quarter of the year. Despite overall market weakness, bonds and international stocks were bright spots. This has NOT been the case in recent years, highlighting the importance of diversification*. Since we don’t know which sector of the market will perform best, this continues to be an important strategy.
Blackrock provided their assessment of the Trump administration’s tariff policy: “we do not see the new tariffs creating a recession in the U.S. given the resilience of economic fundamentals and consumer balance sheets. However, we do expect them to result in lower growth and higher inflation, but the full effects are hard to determine right now.”
Investment firm Ocean Park exhibits a little more concern: As this economic uncertainty persists, the probability of a recession grows commensurately.
For most investors, the best action is to hold to the investment principles that have worked in the past, and that we believe will continue to work. Trading activity is more volatile than it used to be, with more participants looking for short-term advantages. We do not need to jump on the reactive train, especially when it could be damaging to make big changes.
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Ask the Joes® (and Cale) is planning an interactive webinar to discuss current market conditions and answer your questions. Please send them to us and we will provide more information soon!
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*Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.