Keep a Wary Eye on the Horizon
Watching Lex Fridman interview Elon Musk makes me wonder if we are living in a simulation. This month has seen two major events. The assassination attempt on former President Trump and the departure of President Biden from the presidential race. I wrote in early 2024 that the party candidates appeared set, and we would see some stability.
How wrong I was.
Thankfully for investors neither of these two events was catastrophic, I do of course feel for the man that was killed and the two wounded men.
Other international events could also pose problems in the near term. I think most people have put the Russo-Ukraine war in the back of their minds (except for the first delivery of F-16s), but events in Israel, Lebanon, Syria, and Iran have the potential to create additional issues across the Middle East. The most critical issue of concern for me as an investor is the escalation of the attacks in the Red Sea moving to other parts of the Middle East. Should the Suez Canal or the Strait of Hormuz become threatened, we could see a global supply chain crisis.
As an investor, I cannot take stability for granted ever again. We have the Democratic Party convention in August which could prove to be disruptive and campaign events for Trump will continue until election day. As mentioned above, I think parts of the world are watching what Iran does in retaliation for the assassination of the Hamas leader in Tehran. I’m not quite to the point of recommending the Bond Funds, but I think I am close-I might shift in September. We have had an incredible year, and even with the crazy events we saw positive returns across all funds. Unfortunately, the S&P500 funds were the laggard for the month, but for the year it is still returning an amazing 16.67%.
Aside from my potential shift to the Bond Funds in September, I am somewhat positive on the stock market in September. The Federal Reserve continues to remain hawkish on their efforts to fight inflation. They seem dedicated to get it low and make sure it stays low. However, just today they opened the door to a rate cut in September. I would expect the markets to react positively tomorrow.
Keep a wary eye on the horizon and keep investing!
** Mutual fund prices are delayed so the monthly returns do not represent the full month of July as of this posting.
