Please find below our Weekly Market Update for the week ending 10th May 2019.
Blue Sky Comment
We thought the week was best summed up by 7IM’s post earlier today. This week featured a very unexpected comeback although we’re not talking about European football, we’re talking about trade wars.
A week ago, markets were at record highs – not exactly mind blowing given they’ve been rising steadily for over ten years. Since then however, the major markets are down around 3%.
After months of silence, Trump tweeting that the US will raise China’s trade tariffs came from nowhere. This game-changing tweet came just nine minutes after he voiced concerns at the result of the Kentucky Derby offering another “interesting” insight into his presidency.
This was the trade war’s comeback. Except now, it isn’t just words.
Yes, it really is that easy to shock markets. However, volatility is expected and we’ve positioned our portfolios accordingly. Trade wars don’t change that. Some are already speculating that this is the time for cash. Just like they did in December. Markets won’t be calm and won’t be full steam ahead but we believe that moving to cash when markets are choppy can have a hugely negative impact on long-term investing. Very few of the planet’s brightest minds will time a move perfectly and even fewer could then keep a plan on track.