One of the biggest challenges in investing is to stay focused and on course. Investors must look at the markets from a historical perspective for broader context, and to better understand why it is important to stay the course during both calm and perilous markets.
The domestic equity markets were roiled in August by the trade war between the US and China. The announcement of another round of higher tariffs on Chinese goods at the beginning of the month was quickly followed by an increase in the tariffs on US goods entering China. The Trump Administration responded with even higher tariffs on virtually all Chinese goods.
On the morning of September 14, 1814, Francis Scott Key penned the first verse of The Star Spangled Banner on the back of a letter as he watched with pride as a group of US soldiers raised the American flag over Fort McHenry a day after more than 24 hours of continuous bombardment by the British. For the history buffs among us, the battle was a critical victory in the War of 1812 that began, somewhat ironically, given the current state of affairs with China, over a trade war with Britain.
The Business Roundtable announced this week that, in its latest reading, the organization’s CEO Economic Outlook Index had its biggest quarterly decline in seven years. Business Roundtable President and CEO Joshua Bolton said, “American businesses now have their foot poised above the brake, and they're tapping the brake periodically.”