I’ve literally just finished sending out Flash Alerts to each and every one of my newsletter members (if you subscribe to Growth Investor, Breakthrough Stocks or Accelerated Profits, you may want to check your inbox) about today’s dramatic pullback.
But then I got to thinking: What I had to say to them today really applies to anyone who invests in the stock market. There’s a lot of fear and misinformation out there, so I want to help clear the air for everyone, not just my paying subscribers. So in today’s blog let’s tackle what happened today and what I believe your best course of action is.
To make a long story short, the ongoing trade spat between the U.S. and China is making the financial markets nervous today. The two economic powerhouses are continuing their trade negotiations, with both parties threatening to slap more tariffs on foreign goods.
Last Friday, China and the U.S. proposed more tariffs on American-made and Chinese goods, respectively. President Trump revealed a 25% tariff on $50 billion worth of Chinese imports, with a focus on technology products. China responded, stating it would increase tariffs on $50 billion worth of American products.
So this morning, President Trump announced that he would impose a 10% tariff on $200 billion worth of Chinese goods. By doing this, the U.S. is trying to level the playing field, as well as decrease its ever-expanding trade deficit. And China doesn’t appear ready to play ball yet, which spurred on more trade war fears today. Now, there are plenty of doom and gloom headlines out there about this trading spat, but I don’t want you to panic.
The fact is that the U.S. economy is firing on nearly all cylinders and shows no signs of slowing down. And with the current interest rate and economic environment, there is an excellent foundation under the stock market, and stocks remain the best value in town. So, I have every expectation that the market will bounce back, and I consider today to be a great buying opportunity.
For those of you who subscribe to my premium newsletters, you know that we have been preparing for summertime volatility by shifting our strategy. We’re reducing our exposure to multinationals, which are now experiencing a currency headwind. And we’re zeroing in on smaller, domestic plays that are benefitting from all of the money that’s flowing down the capitalization ladder. Especially with the ongoing drama on the international stage, a predominantly domestic strategy is the way to go in this market.
To reiterate, I consider today’s pullback to be a buying opportunity, especially for premium domestic plays. In the meantime, please know that I’m keeping a close watch on the market’s activity. I’ll be in touch in this daily blog with additional market updates, my stock analysis and more.