Look For Trade War Agreement Soon Between US & China
It is my opinion that we will hear the outline of a deal between the US & China, ending the Trade War in the next few weeks. I think the US & China will agree to faze in Tariffs on trade over the course of many years into the future. This will allow President Trump to promote how he addressed the trade imbalance with China, as any agreement in the future that helps the US, is still better than if President Trump never addressed the issues with China at all.
If you look at what is currently happening in the Chinese Stock Market, the slowing of their Economy, the lack of confidence the US Stock Market is starting to experience, I think both President Trump & President Xi Jinping of China have realized their countries are starting to slow or decline severly, and neither side is benefiting from the ongoing Trade War, Tariffs & verbal threats.
Once we hear the outline of an agreement has been made between the US & China, look for Chinese & US Stocks to rise. Due to the steep decline in Chinese Stocks over the past few months, look for those stocks to rise much greater than US Stocks, recovering much, but not all, the losses they have experienced since the Trade War began.
After China & the US make a formal announcement, I do see US Stocks rising close to where they were early October 18′ over the coming months, however, if / when that happens, it would be a good idea to start taking profits and reducing your exposure to high growth stocks.
As the Federal Funds rate continues to rise, it is going to be more difficult to find stocks that rise. I believe in the near future, buying stocks on dips in the market and selling on a market recovery, will be the best way to make money while also reducing day to day exposure to Equities! Using a Covered Call strategy moving forward may be another way to earn additional income, and help your overall Total Return! Whether this strategy is right for you depends on your risk profile, financial situation, and years until you need access to the money invested.
All investments contain some risk, therefore, it is important that you understand the risk of all investments.
If you need help with your portfolio, please contact me and I will see how I could best help you!
James R. Wigen