Another week and a bad start.
Last week, we dealt with Deep Seek.
This week we are dealing with tariffs.
No matter the subject another week and another hurdle to overcome.
Just remember that we ended last month at record levels for the S&P 500.
I am not making light of the impact on citizens of the US.
This is just another tax based on consumption.
I would prefer taxes to be a flat amount, but that is a debate for another time.
What is of equal importance are the ongoing earnings reports.
A couple of the Mag 7 reported better than expected earnings last week.
The market however cares far more about projections of future earnings.
You have to understand and appreciate that there is no benefit over the long term for CEOs to be
overly optimistic.
In most cases, it’s better to Uber promise and over deliver.
My concept of investing, looking for value, has not worked since the pullback during the pandemic.
That takes patience, which is easier if you are receiving dividends.
For younger investors, funding your retirement account, simply follow Warren Buffet’s advice.
Buy the S&P 500 index.
It has outperformed almost every money manager over the long term.
An alternative is to purchase Buffet’s Berkshire Hathaway stock.
It has outperformed the S&P 500 over the last decade.
I finding keeping it simple is far more rewarding.
I do have a trading account that I trade shorter term with stocks that are much more volatile.
The good news is that the market has lifted all boats and I picked a good portion of the Mag 7.
No great shakes on my part, more luck than anything.
The problem with these stocks is the volatility and the PE is historically high.
What we have to realize is that the current administration sees tariffs as a tax.
Essentially it is a consumption tax that we will all have to pay.
If you are not going to raise taxes, you have to get the money somewhere to pay down the debt.
The current administration believes if the economy improves, we will gain more taxes, which is in fact true.
Then you have to also cut spending, which did not happen the first time around.
We are only two weeks into this term and each week brings another issue to evaluate.
This appears to be a market that will be difficult for the weak of heart.
I do lean towards less regulation and far-less government, but the jury is out.
I would suggest avoid the panic and focus on each company’s earnings if you feel like trading at these levels.
The simplest concepts and sticking to a strategy are hard, but the best over the long term.
