New Allocation: 100% G Fund
It was a very rough weekend for the Asia market. The futures tanked as soon as the President tweeted an increase in tariff’s on Chinese goods from 10% to 25%. All of the major indexes gapped down about 2% at the open on Monday and then fought their way back throughout the day. It was a wild swing but, by the end of the day, the C fund was down only 0.45%, S fund down 0.07%, I fund down 1.13%, and F fund up 0.13%.
There may be a bit more upside to this market. Today’s reversal, after a huge gap down at the open, shows that investors are in a mindset to “buy the dip”. This mindset may push the market a bit higher from here but, it’s days are numbered…
Take a look at the chart of the Dow Jones Industrial Average below. We have come a very long way since the lows in 2009 and have formed a triple top since the January 2018 high. This is HUGE resistance. The potential gains from here, in the short run, are vastly out weighed by the longer term potential downside risk.
Bottom Line: Market risk is very high. The medium to long term potential for loss far out weighs the short term potential for gains. My #1 rule is, Don’t Lose Money! I’m out… for now.
Please post questions to comments. Buckle up; this summer is going to be one heck of a ride…