Coming To a Theater Near YouSubmitted by RetireWiseCFP on July 10th, 2019
Please get ready NOW for the hyperbolic and scary rhetoric from presidential candidates and the media from now until November 2020. This or that candidate will inform us that everything will become a disaster if some other person is elected. Please know this NOW: We shall stay calm, and we generally (I don’t want to be absolute) do not make investment decisions based on hot political rhetoric.
Where are we now?
While the overall trend is positive, I’ve noticed a lot of short-term thinking by so-called investors and professionals lately. There are overreactions to presidential tweets—daily and weekly BIG up and down whiplash moves. I have remained disciplined and ignored the noise. We have tried to participate in some of the recent new companies (IPOs) that will refresh and reenergize the future of America. Unfortunately, many people miss the mark when they look at new companies; they mistakenly focus on short-term stock market reactions. Not all IPOs are the same—some companies are truly game changers, but many are just “me-too.” We want to participate in the game changers because they are the companies that will potentially provide real opportunities for 10x returns on investment.
Where do we go from here?
I expect lots of amplified hot noise and tweets that will induce volatility in the coming months. We shall stay very calm and disciplined! Employment is solid, and companies are benefiting from lower interest rates and are using this opportunity to shore up their balance sheets. The country is on a sound economic footing right now. The next questions are: Will America make a structurally beneficial deal with China? If not, will the Federal Reserve Bank come to the rescue?
On fixed income and alternatives:
If China decides not to make the requisite concessions and structural changes that America is demanding and there is no deal, I expect a negative stock market reaction and then for the Federal Reserve Bank to cut interest rates to keep the economy going strong.
On Alternatives: The Bitcoin mania may be back from the dead. Facebook has declared its intention to start a new cryptocurrency. That has excited new enthusiasm for Bitcoin and other cryptocurrencies by speculators. I am following the development closely, but so far I’ve seen no reason to participate even on a small scale.
What should we look out for?
Same as the last time: The outcome of the negotiations between the US and China is really the next shoe to drop, and that, my friends, is a BIG one. There is no need to speculate or take action in anticipation. Whatever happens, I make only one promise: I will deal with it. We will buy more of the companies that will benefit from whatever outcome occurs. America is a resilient and dynamic economy; I am confident America will make the necessary adjustments, and China will not overcome America.
I have traveled far and wide throughout this great country, including the middle of America—I’ve observed with my own eyes that the American people and industries are far bigger, more resourceful, resilient, innovative, and most important, 100x problem-solvers than bloviating Washington politicians can imagine. American businesses and people will be okay, will strive, and will thrive—regardless of Washington.
Femi T. Shote, MSF, ChFC, CFP®, Accredited Investment Fiduciary®