US Weakness and Its Effects on Stocks
We don’t know what US weakness means to future private personal income in the Western democracies. At the same time, psychological or sentiment indicators have been flashing red since the beginning of the new year.
Stocks had a large decline in 1962 months before the Cuban Missile Crisis. The economy was strong. Inflation and interest rates stayed low — like now. But behind the scenes, not publicly like now, geopolitics were destabilizing.
Transparency with the global Internet and social networks might speed up corrections caused by instability and uncertainty concerning the global economy when autocrats run over weak Western democracies.
A Manager’s Take on US Weakness
John Hook in New York is my guy that I look to for the probabilities based on historical precedent that unknowable and uncertain events might occur.
Today, before the market tanked to its bottom, he recommended that we hedge more — or that traders short the market.
I took action and reined in our exposure to market fluctuations by about another 10%. I will not hesitate to go further if the geopolitics continues to favor those countries like Russia and China that are looking to restrict worldwide economic freedom.
Geopolitics and Stocks of Great Companies
I still think the best way to hedge against inflation — and geopolitical turmoil — while growing your assets is to invest in stocks of great companies. Learn more by signing up for my email news. And contact me at firstname.lastname@example.org or 732-800-2375 if you’d like help getting started.