Trumped Up Volatility
The President speaks and the market moves. Day by day it seems like the message and the direction are changing all the time. The President's detractors see him as clueless and inconsistent. His supporters see him as negotiating and flexible. Regardless of how you see him, what's the best way to navigate the Trump volatility?
Markets tend to move on news and June was no exception. The strange thing was that even though there were relatively few important topics, the news on those topics was incredibly inconsistent.
During June there was an historic meeting between the President of the United States and Chairman of North Korea. It was scheduled, it was cancelled, it was rescheduled, it was held. Also, it was a success, failure or meaningless depending on whom you asked. Everyone of those stories came with a market swing.
Also, during the month there was near endless discussions of tariffs. Some were implemented, some were threatened, some were considered, rethought or cancelled. All of them made the news and had an accompanying market swing.
If you're in the business of updating economic models this was a tough month!
However, if you're in the business of long term investing, not that much changed in June. In fact, the markets haven't moved all that much in 2018. The S & P 500 opened this year at 2,683, the high was 2,872 and the low was 2,581. That means we've moved in a 10% range and never been more than 7% from where we started. No big deal.
What the media is looking at as Trump volatility, I consider trumped up volatility. When you are looking at your investments and financial planning, perspective is just as important as knowledge. If this month or year has felt crazier than the steady one the numbers show, consider my 6th Rule for Investing and Finance and "Turn off the TV". You can still talk markets by giving me a call. You might even prefer it because, my channel is dedicated to making you money.
