Newton’s Third Law of Physics states that: for every action, there is an equal and opposite reaction.
While this law is applicable to physical movement and force, there is also some argument that can be made that this can also apply to choices we make in life – for every actionable choice, something will happen as a result.
Man, are we seeing this come true today in the US stock markets. The markets have been absolutely crushed by the news of reciprocal tariffs being imposed by the Chinese on a number of US imports as a result of tariffs recently imposed by President Tump on a handful of Chinese imports.
The market was already fearful of a trade war with China as a result of the tariffs, and it appears the fears were with merit. The “farm belt” in the US is particularly concerned, as they are big exporters of produce and other crops to China, and whose products will be impacted by the stiff Chinese tariffs.
When making a big decision, you must consider the potential impact of the reaction your decision will cause. It certainly appears that President Trump is willing to take drastic action without counting all the costs or considering the potential reaction. For someone who has taken credit for the stock market doing so well, he must also take the blame when the Dow drops 700 points based on his actions, which were fairly controversial in the first place.
While I am not too concerned about short-term price declines in the markets since I have a long-term investment horizon, the bigger concern is the continued uncertainty caused by decisions made with a perceived lack of care or support – what is the next decision that will haunt the markets? More care must be exercised in big decision making.
Just my two cents.
Brian