Video Transcript:
Good afternoon. Brent Chavez with Aequitas Equitas Investment Group working hard this Friday afternoon to level the playing field for all of our valuable clients.
I want to introduce my latest addition to my family, Magnus. He is an 11 week old Doberman. And when you come into my office you will get to meet him up close and personal on your next visit.
Just wanted to briefly talk about the markets since we’ve had a volatile week and we haven’t had this type of volatility since the end of 2018. The recent market draw down of almost 5% has been caused by tariff scares, the US and China walking into a trade war.
Last night President Trump enacted an additional $200 million in taxes with tariffs on goods coming into America from China, again, so we see continued Friday morning sell off of the markets. And as of 2:30pm, we have seen a rebounding up towards neutral, as we go we don’t know how markets will end today, but in any event, this too shall pass.
In many of our videos at the end of 18 we talked about the data not supporting the large sell off that took place starting in September through Christmas Eve. Data did not suggest that we should be selling off like this. And we had repeatedly recommended staying calm, staying in the markets and that was the right thing to do. As we quickly saw a rebound touching back up to these highs that we reached twice before, but now we see again about a 5% pullback in the markets as we stand here Friday afternoon.
You probably won’t get this video to Monday, because it has to go through our compliance department, and you will receive it on Monday at some point. But in the meantime, we want to keep things in perspective not get overly concerned that this is going to lead into some full fledged war between China and US.
Some things we want to remember is that being in the markets first and foremost is always difficult. There’s always issues that are facing people who have their money invested into the market, whether it’s Brexit, Grexit, North Korea, financial scares within the system itself, to terrorism. There’s always going to be various issues that are going to cause people to be scared in the market, making it very difficult in periods of time to stay in the market. But we know from here to here, that has been the place to be for the last three, five and ten year period.. the greatest opportunity was found being in the markets.
So, with that being said, the realization is that both of these countries, for the benefit of both sides, need to come to some sort of agreement. Trade talks could end today, Friday, very badly with no agreement, but again, those trade talks can be started anytime moving forward.
We have a presidential election in 18 months here in the United States, so I know that the President Trump does not want this to drag out longer than it has to. What does China, what is their interest? Well they have the largest population in the world by far as we look at the breakup of the demographics around the world. China is the largest country followed by India. So they have billions of people that they need to keep employed and continue to grow their economy.
The US, what do we have at stake? We have what is the largest economy in the world. About 21 and a half trillion dollars in GDP is going to happen in 2019. So we have, the United States, the largest economy by far. China has is about $7 trillion behind the GDP, with a much larger population.
So we have the US and its GDP, its ability to produce, we have China, largest population of the world… it’s in the best interest of both parties to come to an agreement and we feel that ultimately that’s what will happen, but we may have some more rough times in between.
So I just want to get this out to you and assure everybody we’re here working hard staying on top of it, the data that’s coming in, looking at all possibilities of outcomes. And we will always keep you informed and I’d like to thank all of you who are my clients. Have a wonderful weekend. If you have any concerns that you want to talk to me more in depth about, feel free to give me a call at the office. Again, have a wonderful weekend. Bye bye.
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Images Used in Video:
– World’s Biggest Economies for 2019 and 2020
