Check out two really good slides.
The first slide outlines the vast difference of when a recession really occurs and markets anticipate the recession and react, versus when the government (the NBER, National Bureau of Economic Research) “declares” a recession.
It is time again for “the Greatest Chart Ever”.* And to extend the expression, often “the greatest” takes a while to develop.
The current situation that may take a while is tariff policy by the US with respect to trading partners. Tariffs are in effect for barely one week. Markets in short order have punished stock prices and caused heavy volatility in US Treasuries. Most of the volatility is due to uncertainty on a large scale about how and how much tariffs will affect availability, demand and end prices for consumer and industrial goods globally. That is a massive amount of goods and only time will tell. Stock markets do not like uncertainty – even if the eventual goal is to make a positive difference.
Please see the simple graphics and detail above for reasons why a globally diversified portfolio has outperformed despite recent (and in several cases, major) declines in the “Magnificent 7”. The article sites three charts. TGIF 2 Minutes chose two of the three.
In addition to these data points, there are still more reasons to keep faith in a well-laid out long-term strategy that takes into account more than solely the large growth area of the stock market.
This material has been prepared for informational purposes only and is not intended to provide, and should not be relied upon for, tax, legal or accounting advice.
