Posted By RichC on August 5, 2019
Monday, August 5th, 2019 was not a good day to be long in the stock markets – WSJ update. I think we are often too complacent with investing and fall victim to the “stay the course” and invest for long run mentality. It is easy to forget just how painful market drops can be.
Economist and analysts have warned repeatedly that our long running recovery is due for a correction, yet they have been so wrong since the election of President Trump that most ignore their cries of “wolf.” But as the saying goes, “even a broken clock is right twice a day.”
Today’s (and pretty much all of last week’s) selling was all due to trade talks with China and their response to more tariff threats from President Trump come September. The Chinese in turn continue to devalue their currency and pressure companies to not purchase agricultural products from the U.S. and seek to develop other relationships. We are entering a new and frightening phase in what is now definitely a trade war. Add to this, the rest of the world is economically slowing, all which dries up markets for U.S. goods and drags down our “strong for the moment” economy. The U.S. workers are finally getting comfortable with being employed and even seeing a few more dollars in their paychecks. As they say, “just when you thought it was safe to go back into the water …”