What ever happened to the lazy, hazy days of summer?! Labour day has come and gone, the kids are back in school and the days of wearing shorts all the time are numbered. August was anything but relaxed as far as global events were concerned. Brexit continues, the US and China are no closer to agreeing on trade issues, Hong Kong unrest is in its third month and various hotspots keep the headlines churning. The markets, in turn, have been volatile. In spite of that, most assets are up quite handsomely, year to date.
Recession - it is not out of the question to expect one. After all, it's perfectly natural to hit the reset button from time to time. Signals such as inverted yield curve (long term rates lower than short term), declining corporate profits, slowing Global GDP, manufacturing contraction, rising gold prices, declining copper prices and consumer confidence ebbing are all typical signs of late cycle pre-recession conditions. Right? There is the possibility that the current indicators have moved negative artificially due to trade uncertainty. Any sort of breakthrough could send the indicators in the opposite direction. No shortage of noise.
In reality there have always been events and conditions to worry about. 2019 is actually normal, except, maybe some of the characters on the world stage, who shall remain nameless.
What can we be certain about? Fundamentals. Let's keep our eye on fundamentals; stay diversified, buying long-term assets for the right reason (long-term growth not short-term), looking for buying opportunities when things look grim and above all don't use funds needed for near term objectives to buy long term assets on speculation. And, oh yes, it is worth repeating, stay diversified.
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