When moments like this happen in the markets, it’s always good to take a breath and remember what your game plan is and what you are trying to accomplish. To that end, we want to continue to make sure that our asset mix (stocks vs bonds) provides the appropriate amount of volatility that our risk profile calls for. If a move like yesterday causes distress, then your asset mix/risk profile might need to be revisited. Assuming all is well with the construction of your portfolio, the next thing we want to remember is to never try to react to news headlines- especially the type of news headlines we get these days. The minute you might think you have something figured out, someone with a smart phone is going to tweet something that will change the direction of markets in seconds. DO NOT make investment decisions based on emotions that are driven by hyperbolic headlines. You have a game plan in place for a reason. Stick to it. We know how investment success is achieved. It’s by remaining calm and keeping focused when outside forces are doing everything they can to distract you. Investment success is achieved over years and even decades. Investment success is not achieved by trying to game the next headline.
As for today, after yesterday’s 3% decline, an early look at futures overnight indicated that we might be in for another day of pain when the markets opened this morning. Instead, a Chinese currency headline made stocks open to the positive and after some ebb and flows, buyers pushed stocks higher. For the day, the Dow Jones Industrial Average was up 311 points to close at 26,029. The S&P 500 was up 37 points to finish the day at 2,881. Gold was up $7 to trade at $1,438 per ounce, while oil was down $.95 to trade at $53.74 per barrel WTI.
We’ll get a look at Disney’s earnings after the bell today, but tariff and trade headlines are likely to be the main market movers this week. Stay tuned, we’ll keep you up to date.
Have a nice evening everyone.