Trump is awful. He has single handedly screwed up markets and caused issues for people, companies and countries. But I am not worried. It will recover.
When we set up your investments we knew this would happen. Not Trump specifically, but the markets always go up and down. Whilst I had hoped for a little more of a breather from the volatility, as we have had a bit recently with covid, then Russia invading Ukraine and inflation and interest rate increases, we don’t always get what we hope for.
Trump’s tariffs came as a big shock to the markets, not that he was going to do them, but the size of them and how far reaching they would be, especially for companies such as Tesla, Apple and the others in the Magnificent Seven (the 7 big tech companies who have been generating most of the recent stock market performance).
This has played into EQ’s hands quite nicely (EQ Investors are the sustainable part of our portfolio) as they had limited exposure to those companies. Amazon is out due to how they treat staff, Meta who own Facebook is out due to their data leaks, Tesla was in, but before the big drop was taken out, due to how Elon Musk has made the brand unpopular with his work for Trump. So EQ’s portfolios have dropped less than our “normal” ones.
Some clients have asked me whether they can change the geographic allocation of their portfolios as they are concerned about the US. But where would you put it?
The “fun” that Trump is having at the moment is affecting everywhere and whilst the US tech stocks have been hard hit, not only were they slightly overpriced (in my opinion) and priced to continue doing brilliantly with no competition, but they make so much of their tech in China and sell it all over the world. If we took money out of the US, where else would it go? Nowhere seems safe, even the islands with just penguins were hit by Trump.
Therefore, research has shown that it is best to hold tight and keep your investments as they are. Trying to predict what will do better at what time is near impossible.
Damien Lardoux, EQ’s Head of Impact Investing, has recently said: “Experience shows us that it’s often darkest just before the dawn, and turnarounds in market fortunes are often sharp and unexpected. Rather than trying to call the market, the right course of action amidst this market volatility should be to keep the long-term picture in mind, and to resist the temptation to sell investments when markets are at such a high level of volatility.”
So as always when these things happen, my advice is to do nothing. If you worry about this sort of thing, then just eat some chocolate 🍫 and don’t look at your investments until they have gone up again, which they will. And call me 😊.
