Do what you do best, so you can be the best at what you do

I can’t take credit for that line, but I also can’t give proper attribution either.

For the last few weeks, I have been writing opinion pieces about subjects that seemed important at the time. Brexit, Corporate buybacks, the political climate in this country and China. While I enjoy giving an opinion now and then, my readers want me to go back to what they felt I did best, talk about the markets.
Today, I will start mixing in market commentary with my regular opinion pieces and tweak it as I go along.

Let’s recap the year so far. Basically, it’s been a one-way ticket to retracing all of December’s losses and at some point, testing new highs.
Earnings were well within the expected ranges and the last JOBS report was exemplary. Trade tensions seem to be getting all the headlines and that’s a legitimate cause for concern.
Shutdown? What shutdown?
The looming threat of another shutdown doesn’t seem to be carrying the same weight as it did in January. With both sides agreeing in principle on a new spending bill (did someone mention compromise?), it’s all up to the President.
Will politics derail a robust economy?

Now that we are caught up, let’s go over the market today. The Dow rose 373 pts yesterday mainly on the possibility of some sort of deal with China on trade. This is a fluid situation and will continue to be one for a while. As I have said previously, I think the Trump Administration is dealing from a position of strength and the Chinese know it. I also think the bigger issue here, intellectual property rights, will not be solved and while our trade imbalance with China might shrink somewhat, they will still steal proprietary information and use that information to rob US companies of hard-earned cash.

One thing that should be noted and this will develop further is that while the global economy is slowing, the US economy is still growing steadily. When this dichotomy existed before, foreign money flowed into the US in record numbers.
This could keep a tired bull market going for another few months as foreign investors lose faith in their own markets, they look for the strongest economies and money follows money.
From my experience, and this is not a knock on foreign investors, foreign money moves into the US market at the end of a bull market. They also tend to look for possible takeover targets as well. Foreign takeovers of US companies has not been a thing for several years but I think you may see a pickup because as I said, money follows money.

My money is staying put,

50% Stock
25% Fixed Income
25% Cash