Q: Dear 5i
I have considerable cash yet in my portfolio and have been doing some buying of late , easing back into the market .
I feel that the worst is likely over but with Trump and his tariffs how can you know for sure . My one concern still is not ,so much what additional tariffs could be added but what will be the near future effects of the current tariffs that are in place . Even with no additional tariffs the ones currently in place once in effect are likely to cause increased inflation , higher prices , higher unemployment and the potential for perhaps a mild recession . That said , is it wise to be buying a whole lot now and be mostly invested or would it be prudent to be maintaining steady buying , regardless of the potential for the negative consequences of the tariffs once they take effect ?
Thanks
Bill C
I have considerable cash yet in my portfolio and have been doing some buying of late , easing back into the market .
I feel that the worst is likely over but with Trump and his tariffs how can you know for sure . My one concern still is not ,so much what additional tariffs could be added but what will be the near future effects of the current tariffs that are in place . Even with no additional tariffs the ones currently in place once in effect are likely to cause increased inflation , higher prices , higher unemployment and the potential for perhaps a mild recession . That said , is it wise to be buying a whole lot now and be mostly invested or would it be prudent to be maintaining steady buying , regardless of the potential for the negative consequences of the tariffs once they take effect ?
Thanks
Bill C
5i Research Answer:
We would remain comfortable with 'steady buying'. We also think the worst is over, but high volatility still may be a factor. But with inflation so far under control and good earnings from companies, we think investors are starting to adapt to the current set of worries. Interest rates and inflation will be things to watch. Also, there may have been some 'pull through' orders in the Q1 so Q2 may not look so hot. But prices have adjusted, and tariffs may not end up as bad as expected at the end of the day. Investors are anticipating a recession already, and may start looking forward to lower rates and an economic recovery down the road.