Kid Rock is Briefing Military Officials. Your Investment Strategy Should Be Indifferent to the Iran Situation
The last few months you may have had questions about how much influence over the markets one man’s social media account should carry or whether Operation Epic Fury has any real timeline. I am not a political scientist however, I am an investment advisor. I will stay in my lane.
I recon it’s a fool’s gambit to try and determine which direction oil and related securities may sway after a Truth Social post on any given day. Monday we could have promise of the biggest peace deal the world has ever seen, by Friday threats of wiping a civilization off the face of the planet.
So what can be done? If you’re in the accumulation phase the boring (and probably best) answer is sticking to your long term investment plan. Ignore the short term and keep contributing to your investment accounts. If you’re in the decumulation phase (i.e you’re retired and selling assets) then you might want to sell anything that has gone up significantly these past few months first. For example the energy sector is up over 30% just this year so far. By selling your high fliers you are locking in gains on those names while giving the underperformers time to recover.
Macro Indicators in April
U.S Stocks
$SPY +13.54% MTD
U.S Treasury
10 Year Yield 4.383% +1.51% MTD
Volatility
VIX 16.91 -33.03% MTD
Top Performing Sectors
- Information Technology
- Consumer Discretionary
- Industrials
Bottom Performing Sectors
- Energy
- Healthcare
- Utilities
I don’t think there is anything too profound to be discovered looking at which sectors did well and which ones did not.
+The month was good for risk assets, cyclical sectors outperformed defensive ones. Its honestly quite textbook. The ones that were most beat down had the most room to recover.
Long Term Outlook
Last month I said I was pessimistically sideways. April was a good, in a vacuum even a great, month for risk assets. The S&P up over thirteen percent in a single month, it even made an all time high (The Dow Jones is still under 50,000 iykyk). All of that to close the month only slightly higher than what it was two months prior. All I’m questioning is does this rally/recovery have room to run? Everyone loves the “Be greedy when others are fearful” portion of Warren Buffett’s quote, but its important to remember the other half “Be fearful when others are greedy”
So going back to the question earlier “What can be done?” The less boring answer is I’m going to be looking at value opportunities. I might look for sectors or industries NOT trading at all time highs.
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