In the long run trade wars benefit no one. Nevertheless, in the short term they may provide a buying opportunity for the wise investor with a high tolerance for risk.
Threats of tariffs may evaporate as cautious minds prevail. On the other hand they may not. This plunge into possible protectionism may well be the straw that breaks the Dow’s back. Proceed with caution.
The fundamental question is, is this the end of the bull market in the US or the start of a bear market? Given that Canadian markets generally follow the US closely this would also apply to Canada. Fundamentally the US economy is robust with the first stages of wage inflation on the horizon. Trade wars will increase price inflation in some sectors but still it will be a while in coming. Having said that there is still one large uncertainty in the States. I’ll leave that to my sage readers to discern on their own.
I think there is more steam in the Bear making this a good buying opportunity in ETF’s and mutual funds. This may be ideal for those of you rebalancing your asset investment portfolio. Be cautious. Uncertainty is the prevailing climate at the moment.