Looks Like This Won't Trigger a Big Stock Sell-Off
You always want to circle back to fundamentals. Athletes - at the good ones - stick to this practice. Those who don't generally aren't all that good.
In investing, one of the fundamentals is the whole "long term" thing. As a general rule, you want to follow strategies that focus on long-term results. That goes for both your planning as well as investing. So jiggles up and down in asset prices shouldn't consume too much - if any - of your time.
On the other hand, being aware of potential pitfalls that could lead to big moves can be helpful, even if only to prepare you so you're not caugh off guard. For example, being caught unawares when the market drops like it did in December created panic in many investors. They just didn't see it coming. When it came, they didn't understand what was going on. It was a perfect recipe for creating panic.
With that in mind, be aware of what may or may not happen on March 1st - which happens to be this coming Friday. That's the day Trump said he would decide whether to impose additional tariffs on China. We've got our calendar marked.
On the other hand, over the weekend, noise came from the Trump administration that any consideration of additional tariffs would be delayed, based on recent talks between the U.S. and Chinese governments. On Monday, markets leaped for joy. If the news holds, it could create more fuel for the "Melt-Up" that we keep mentioning.
So do we scratch it off the calendar. Likely we'll leave it be until Friday's come and gone. A lot can happen in a week. And, like many adminisraitons, President's and their advisor can flip-flop on a dime if there's some political advantage to doing so.
But unless a flip-flop lies in our future, it certainly does look like the tariff waters will remain calm - for now.
So will stocks continue shooting for the moon? Shorter-term technical indicators say "No." Prices are over-extended when compared to various moving averages - a condition knows as "overbought." While prices don't respond in clock-work fasion to such conditions, they do respond eventually. If it's not by Friday, then it'll be some time thereafter.
We're watching to see how overextended prices become before they snap back. Like a rubber band, the higher prices get, the more volatile the snap-back. When it occurs, it likely own't cause us to make any significant adjustments to our portfolios. Nevertheless, we do want to be aware of the possiblity. And in the case of new money we're looking to invest for a given portfolio, it might present us with an opportunity to put that money to work - or not. It all depends on how much prices move up or down.
The key benefit to being aware of potential big moves remains, however, control of our emotions. We want to stay as far from panic as possible. And if, in doing that, we can actually remain cool, calm and in control, all the better. It's simply healthier for mind, body, and soul to avoid sharp swings in emotion.
In investing, one of the fundamentals is the whole "long term" thing. As a general rule, you want to follow strategies that focus on long-term results. That goes for both your planning as well as investing. So jiggles up and down in asset prices shouldn't consume too much - if any - of your time.
On the other hand, being aware of potential pitfalls that could lead to big moves can be helpful, even if only to prepare you so you're not caugh off guard. For example, being caught unawares when the market drops like it did in December created panic in many investors. They just didn't see it coming. When it came, they didn't understand what was going on. It was a perfect recipe for creating panic.
With that in mind, be aware of what may or may not happen on March 1st - which happens to be this coming Friday. That's the day Trump said he would decide whether to impose additional tariffs on China. We've got our calendar marked.
On the other hand, over the weekend, noise came from the Trump administration that any consideration of additional tariffs would be delayed, based on recent talks between the U.S. and Chinese governments. On Monday, markets leaped for joy. If the news holds, it could create more fuel for the "Melt-Up" that we keep mentioning.
So do we scratch it off the calendar. Likely we'll leave it be until Friday's come and gone. A lot can happen in a week. And, like many adminisraitons, President's and their advisor can flip-flop on a dime if there's some political advantage to doing so.
But unless a flip-flop lies in our future, it certainly does look like the tariff waters will remain calm - for now.
So will stocks continue shooting for the moon? Shorter-term technical indicators say "No." Prices are over-extended when compared to various moving averages - a condition knows as "overbought." While prices don't respond in clock-work fasion to such conditions, they do respond eventually. If it's not by Friday, then it'll be some time thereafter.
We're watching to see how overextended prices become before they snap back. Like a rubber band, the higher prices get, the more volatile the snap-back. When it occurs, it likely own't cause us to make any significant adjustments to our portfolios. Nevertheless, we do want to be aware of the possiblity. And in the case of new money we're looking to invest for a given portfolio, it might present us with an opportunity to put that money to work - or not. It all depends on how much prices move up or down.
The key benefit to being aware of potential big moves remains, however, control of our emotions. We want to stay as far from panic as possible. And if, in doing that, we can actually remain cool, calm and in control, all the better. It's simply healthier for mind, body, and soul to avoid sharp swings in emotion.
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