Its been a while since I posted about the stock markets, but I've been watching them with intent for a number of months. At the end of Jan, I sold most of my holdings, as soon as discussions about tariffs being put on Canada and Mexico became a reality. I thought the market was rather high and that point (too high in fact), and with the threat of a global trade war looming, I assumed it would start to fall. I then sweated it out over Feb when there wasnt too much movement !
Anyway, come march and April, and here we are - plunging markets:
[Credit - Screen shot taken from Yahoo! Finance at the time of posting - NASDAQ 3 months chart]
As per above, the NASDAQ is down over 20% since Feb !
Key points were the introduction of 10% tariffs on saturday (5th April) that led to quite a sell-off on monday (7th April) across all markets. I was a bit surprised by the by-back today (8th April), but I assume its institutions making a quick buck. With the higher tarriffs coming in tomorrow (wed 9th April), I'm assuming we will see red again.
And even as I was writing this post another headline popped up on BBC News confirming the US will impost 104% tariffs on some Chinese goods from tonight:
Source (BBC News at the time of posting):
https://www.bbc.co.uk/news/live/cp8vyy35g3mt
So I think there is a great opportunity coming to invest in stock markets if you have cash available. Timing is everything though and the advice is always not to try and time the market, however I'm keen to atleast try and dial-in the timing a little. I could invest now and probably do alright over time, but are there more drops coming ?
The next round of deeper tariffs are due to be enacted tomorrow (Wed 9th of April) which will impact loads of other countries including the European Union at 20%.
[Credit - Screen shot taken from Yahoo! Finance at the time of posting - FTSE 100 - 3 months chart]
The above graph shows a fall of around 11% in the FTSE 100 (UK main index) since early march.
My main interests are:
- To buy back into the US via the NASDAQ & S&P500 - where I will spend most of my money,
- Then the UK via the FTSE100 mainly,
- Then some in Europe,
- Then some in the Pacific Region and particularly Japan.
[Credit - Screen shot taken from Yahoo! Finance at the time of posting - Nikkei 225 - 3 months chart]
The above graph shows a fall of around 18% in the Nikkei 225 (Japan main index) since Jan.
So when is the right time to buy ?
- I struggle to believe it will be tomorrow (wed 9th of April) when the next round of higher tariffs will be implemented - surely the stock markets will react badly to that, but for how long I'm not sure,
- All of the news indicates that there are already 70 countries clamouring to agree better trade deals with the US (UK, my country being one of them). So my guess is that once some of those trade deals start coming off, and tariffs begin to lift then we may see some confidence return to the markets - but I've no idea how long that will take - it could be months,
- Other countries are also maneuvering to agree improved trade deals with each other, which is no surprise - if the US is a problem, then it makes sense to have other markets to sell to. Again, these may not happen over night, but they must surely help when they do start happening, and again I guess it will take months to agree these even if they are fast-tracked,
- As soon as the impact of tariffs start being seen in economies (inflation, jobs data, company profits, GDP growth, etc) then that will also probably have some impact on the markets, with all expectation being that these will be negative. There will be a time-lag of months (say~3 months anyway) before we start really seeing the impacts from this,
- Then there are other ongoing world problems that could impact the markets - positively and negatively depending on the outcome, and again these are more than likely to be long term (months+).
So there is so much data to take into account. I cant predict it. I dont think its today or tomorrow or any time this week. I struggle to believe that its next week, and maybe when we start seeing some trade deals come in, that could be the time - but how long will it take - 2-3 weeks at a minimum if not months ? No idea.
Anyway - I'm reading as much as I can each day to try and understand it. I dont want to jump in too early, or wait too long and miss it.
[Credit - Screen shot taken from Yahoo! Finance at the time of posting - S&P 500 - 3 months chart]
The above 3 month chart for ****the S&P 500 (US Index) shows roughly a 19% fall since Feb****.
So its a guessing game again - just got to try and read our way through the signals, but as can be seen by the falls above, there are gains to be made - assuming the markets will recover at some point. So once you buy back in, its just about sitting tight until the recovery kicks in (could easily be a year+).
Anyway - I'm keen to hear what anyone else thinks !!!
