The global market has entered a correction phase, marked by a significant decline of about 20%. This downturn is not solely driven by economic fundamentals but also by geopolitical factors, particularly the ongoing U.S.-China trade tensions. This escalation highlights the challenges faced by investors in navigating such a volatile environment.
China Will Lose Scenario
From the communications so far, it appears that Trump's strategy involves isolating China economically. China seems aware of this approach, which complicates the possibility of reaching a trade agreement. The U.S. has signaled to other countries not to retaliate, suggesting that any nation not aligning with U.S. policies could face significant consequences. This dynamic suggests that the conflict may not escalate into a full-blown trade war involving multiple countries, as China might bear the brunt of the isolation.
Quick Result
In this phase, Trump is likely to seek quick results, potentially through simplified agreements with willing parties. Countries like Singapore might capitalize on this opportunity by negotiating favorable terms. However, nations seeking more exceptions could face delays and less favorable conditions. The urgency to achieve these agreements means that the bar for negotiations will be lower, and time is of the essence for all parties involved.
Trading Plan
Given the current market conditions, my strategy involves pacing my investments carefully. The plan is to expand my portfolio's dividend yield by rebalancing from safe stocks to those that have been sold down. This approach is particularly beneficial when fully deployed, but it requires careful attention to diversification. While it's tempting to focus on high-yield blue chip stocks, maintaining a balanced portfolio is crucial. The pace of investment must be measured, as the downtrend could be prolonged due to unforeseen scenarios.
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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.
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