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12:00 TUESDAY – Investing Insights #258 – 04/08/25 - Stock Market Investment Letter



by Robert Holman, CFA CFP | www.DefensiveAdvisor.com


STOCK MARKET RATING (THE BIG PICTURE) … 5.0 (1 - 4 is bearish, 5 is neutral, 6 - 9 is bullish).


One week ago, I said the relationship between the US and China was relatively quiet, and it was, but now, it is anything but quiet. Over 100 countries have been impacted by the tariffs. It’s all the market can think about. Every utterance either rallies the market or raises more questions, which lowers it. Concerns over slowing growth and a possible recession abound.


You can make a case that when the US raises tariffs, like we did under Nixon, the economy suffers, and when we lower tariffs, like we did under Kennedy and Reagan, the economy booms. But that is a little off-target, as I’m about to explain.


What Trump wants, for the benefit of all Americans, is for US trade activities to result in NET MONEY INFLOWS into the United States (currently, it’s net outflows). He cares about the money, the prosperity it will bring, and the freedom it will bring for American companies to compete.


FIRST, UNDERSTAND THIS. Tariffs are only one of the five key sources of fair and free trade. Others are rules, regulations, and restrictions (the 3 R’s that prohibit selling into foreign markets). The fifth problem is foreign currency manipulation. All five barriers keep the US from selling its goods overseas, but the 3 R's are huge. For example, the 3 R’s keep every country out of China, even with tariffs of less than 10%.


Improving fair trade has been discussed before. Previously, at a G-7 meeting in Ottawa in 1981, President Reagan proposed that the US would go to zero tariffs if our 6 trading partners would go to zero tariffs. Of course, the other 6 partners would have nothing to do with it.


SO, KNOWING THIS, i.e., being unable to FORCE anything on other countries, even our allies, President Trump decided the only way to NEGOTIATE all five keys was to impose a tariff (or tax to be paid to the US) on foreign goods imported into the US. It was a sort of “you can pay me now through tariffs or you can pay me later through negotiated free trade”. Your choice. But either way, the US WILL receive its share of $$$$$.


It's estimated the tariffs can bring up to about $750 billion of NET MONEY INTO the U.S every year, which will begin to pay off the US National Debt. Budget cuts can pay off the rest. And these tariffs will cripple or crush China who would love to go to war with the US. Surely, this is a very good thing for farmers, factory workers, businesses, etc.


Our 6 trading partners and the rest of the world now have a problem to deal with – in essence, either pay the money or negotiate to try to get a better deal. So far, over 70 countries have placed calls requesting a meeting. Israel has already met with the US and decided to lower their tariff to zero and eliminate all of the 3 Rs.


ABOVE IS THE TRUTH – and now I hope you TRULY understand WHAT IS GOING ON, and WHAT IS ABOUT TO TRANSPIRE over the next 6 months or so. IT ADDRESSES OUR PROBLEM OF A GROWING NATIONAL DEBT (caused by both political parties) and WILL BENEFIT ALL AMERICANS GREATLY.

ARTICLE THAT MAY BE OF INTEREST


PORTFOLIOS … After reading this report, if you are unsure how to respond to these conditions, you may send a message to my Secure Email and I’ll reply with the information you need. I’ll also give you a free portfolio assessment, see the link below.


TO MY CLIENTS … THANK YOU FOR YOUR TRUST.



LEARN FROM THE BIBLE … Proverbs 15:22 MSG - Refuse good advice and watch your plans fail; take good counsel and watch them succeed.


This report is a 3-4 minute read, published every other Tuesday afternoon, or more frequently when needed. To sign up for this bi-weekly e-Newsletter, go to: http://www.defensiveadvisor.com/blog.


Opinions in this post are for general information only and are not intended to provide specific advice to, or recommendations for, any individual without our complete knowledge of that individual’s total financial profile. No strategy assures success or protects against loss. Nor does past performance guarantee future results.








 
 
 

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Last Edited: July, 2024

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