Yesterday’s market selloff was a reaction to multiple events that came to a head over the past week. The Fed’s underwhelming rate cut, followed by the subsequent tariff hikes from the administration led investors to sell risk assets in fear that the trade war may slow the economy faster than previously expected.
As investors, we are naturally upset by severe market reactions but must remind ourselves that volatility is normal and that in a healthy economy we should use these moments as an opportunity to find investments that are undervalued.
While we acknowledge that global economic pressures will persist and that geopolitical issues (trade war, Brexit, U.S. elections) will be a part of the investment landscape for the foreseeable future, we firmly believe the U.S. economy is on solid footing and the Fed is likely to do what will be needed to avoid a recession.
Disclosure: This Commentary represents a review of topics of possible interest to Pennsylvania Trust’s clients and is not personalized investment advice. It contains Pennsylvania Trust’s opinions, which may change following the date of publication. Information obtained from third-party sources is assumed to be reliable but is not guaranteed. No outcome – including performance – is guaranteed, due to various uncertainties and risks. This document is not a recommendation of any particular investment. Investment decisions for clients are made on an individualized basis and may be different from what is expressed here. Past performance is no guarantee of future results.