Up to 30 and counting? What? The number of vacant U.S. ambassador-ships as one after another resigned because of difficulties, neigh, the impossibility of working for Trump and, at the same time, following ambassadorial protocol.

How is your luck? When markets are volatile with big swings, its best to stay on the sidelines unless your lucky and want to gamble. In the long run, a good investment will gain but, in the short term, there can be ups and downs. If an investor gets on the wrong side of the swings, instead of buying low and selling high the obverse occurs and losses result. So through these volatile times either hold what you have (provided that there good investments) or get into cash and watch.

Eastern European and Latin American bourses had the best of it last week. I think the same will occur this coming week. 

Brazil went through a few weeks of declines which wiped about 4% off the BOVESPA but it rebounded last week. The Argentine (MERVAL) keeps clocking up good gains interspersed with big declines. Its hard to find a good Argentine investment vehicle.  Mexico is best left alone.

Moscow (IMOEX) has gained well this year but has recently gone through an adjustment. It is worth watching. The smaller Eastern European countries of Hungary and Rumania did well last week and have a good yearly record after years of “decay”. As with Argentina, its hard to find a good investment vehicle.

The EEC and Europe are best left alone for now. If you must invest then look for an ETF which can be traded quickly as volatility occurs. Last week, EEC indices declined over 1% on 3 occasions and only rebounded on 1 occasion. So EEC equity funds are a no win situation for investors. Add to that the growth fears in the EEC and UK then they are clearly danger zones.

Asia – we’ve seen Asia become a danger zone many times before now. The Japanese yen is a safety play but there is a negative interest rate. China is resilient when it comes to business but Chinese prefer to play safe and invest in their own property market. Who can blame them when housing prices are rising by 8% to 10% p.a. HK is shooting itself through the head. They are not protests, they’re riots. Whoever is behind them (CIA, Russia, China, Taiwan or who?) is ruining decades of sound reputation for success and resourcefulness. Singapore is on the edge of recession. Thailand devalued an over-valued baht but it is still too high. This did not please the Thai elite.

That leaves the USA with a president who is totally unpredictable. Apart from lying, his claim to fame is jobs, stock market gains and tariffs. Surrounded by a pack of “yes men” and unready to take advice which he doesn’t like, he will continue to cause his usual havoc. Markets are strong because of the weight of money being invested and equities provide better returns than bonds, gold or treasuries. If it were not for Trump’s erratic outbursts and policies, the USA would be the best economy in the world leading with strong growth. As it is, it is the pariah. Keep USA investments safe as Trump has to fire up markets again if he is to win the next election. He will not win it if the USA is on the verge of a recession. There’s a long time to go before 11/20 so the stimulus needed to fire up the economy may not be ignited this year but the longer Trump leaves it and the deeper markets fall then the harder it will be for him to play the good guy and turn it around.

 

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