Over the past few weeks, the tariff negotiations have been a rollercoaster ride at best. Regarding Europe, on May 25th, the administration extended the deadline from June 1st until July 9th before a 50% tariff went into effect for European Union members (Reuters – EU Tariff Deadline Extension).
On May 12th, after days of tense negotiations, China and the U.S. decided to reduce tariffs to allow time for further negotiations (NPR – U.S. and China Trade Talks).
However, on May 30th, the U.S. administration claimed that China had “completely violated” the trade agreement (BBC – U.S. Claims Violation).
How Are We Managing Risk Within Portfolios?
Within our managed portfolios, we attempted to reduce risk by selling some stocks both because of all of the uncertainty revolving around tariffs and trade deals, but also because we are seeing some stock market indicators that are overbought in the very short term.
There is still a distinct possibility that the stock market hits new all-time highs by year-end, and possibly even a few months from now, but we feel the probabilities favor a short breather before we get back up there.
Assuming a drop occurs, our goal is to buy in as low as we can by re-adding the risk/stocks we sold. Anything is possible, and you could argue this is a time that is more unpredictable than most, so if you’d like to adjust your exposure to stocks in any way within your personal portfolio or have had any changes to your risk tolerance, please let us know.
What Could Trigger the Next Market Move?
The amount of money in money market funds hit a new all-time high recently at over $7 trillion (Federal Reserve Economic Data – Money Market Funds). Whenever these savers feel confident about the market again, this money could be deployed to buy stocks, which could potentially push it much higher.
Speak With a Trusted Advisor
If you have any questions about your investment portfolio, retirement planning, tax strategies, our 401(k) recommendation service, or other general questions, please give our office a call at (586) 226-2100. Please feel free to forward this commentary to a friend, family member, or co-worker. If you have had any changes to your income, job, family, health insurance, risk tolerance, or your overall financial situation, please give us a call so we can discuss it.
We hope you learned something today. If you have any feedback or suggestions, we would love to hear them.
with contributions from Robert Wink, James Wink, Zachary Bachner, James Baldwin, and Daniel Ladzinski
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Article Sources:
- Reuters – EU Tariff Deadline Extension
- NPR – U.S. and China Trade Talks
- BBC – U.S. Claims Violation
- Federal Reserve Economic Data – Money Market Funds
Notes & Disclaimer: Investment advisory services are offered through Summit Financial Consulting LLC, an SEC registered investment advisory firm. Summit Financial Consulting Investment Advisory Firm Representatives do not render tax, legal, or accounting advice. Life/Annuity Insurance products and services offered by the individual insurance agent. Health insurance is offered through Summit Health Services, LLC and Property/Casualty (P&C) Insurance is offered through Summit Insurance Services, LLC and our local P&C agency partners. Please update Summit Financial Consulting LLC, if your investment objectives have changed or if the personal or financial information previously provided has changed. Past performance is no guarantee of future results. Representatives of Summit Financial Consulting LLC offer tax preparation services through Summit Tax Services. Summit Tax Services is a DBA of Heemer Klein & Company and they are owned and operated independently.