Greetings from Incredible India! The Ignorant Investor is currently attending a wedding near the ancient city of Jaipur, India. The Pink City is a beautiful place with many historical landmarks to visit; and the food, full of spices, is absolutely delicious. The festivities result in less time for posting, so please excuse the quick look at the market today.
Equity markets have continued to make solid gains this month, with the S&P 500 rising more than 3% for February through yesterday’s close. Granted, news from the USA has been mostly good; maybe not always great, but good. Most recently, Trump chose to delay re-imposing tariffs (extending the current détente) on Chinese goods next month, citing progress in US-China trade talks. Questions do remain about whether the current rally is sustainable, however, since we’ve come quite far since December lows. And once a trade deal is reached between the US and China, will markets treat this as a “sell the news’ event? Will the terms be favorable or enforceable? After all, a considerable amount of meaningful economic data coming from outside the USA (think China, Europe) has been disappointing. And on the political front, the spectre of a “hard” Brexit rises again next month.
Going forward, The Ignorant Investor would postulate that cautious optimism, with investments focusing on solid companies with compelling stories and pristine balance sheets, is still the safest path forward here. Note that sectors matter too! Getting caught in indirect crossfire from trade or policy events is never fun.
