Sometimes, the best thing to do is nothing. Such may be the case now. The markets are in turmoil. The Federal Reserve is hawkish on rates. The President says they are "crazy." Bond yields are going up...
At the same time, companies are reporting increasing earnings. Revenues are up, and the tax break has given them billions of dollars with which to buy back their own stock - which is now trading at a low compared to a year ago.
Meanwhile, my favorite company Square (NYSE: SQ) has lost its CFO, and the sellers have bitten into our former $100 share price, taking it down to today’s $69. But fear not (he said) Jack is still running the show, and they have multiple assets in house that are being run by other great leaders, so if you’re interested, there may be a time to get in over the next few days. The Wayback Machine has been set to early summer levels.
For the record (if there is one) I have sold nothing, even though the temptation is there. I invested in these companies because I liked their fundamentals. The only thing that has changed is the market. Nothing about the companies has changed, so if anything, I have reason to buy more, not sell. That said, I am most interested in Microsoft, AMD, Target, and (still) Del Taco, who seems to be overlooked in the domestic food industry. We’ll see soon enough, as they have earnings coming up at the end of October.
What else? Oh yeah - the safe haven of commodities. You should be looking at copper (CPER) silver (SIVR) and an overall commodities ETF that trades under the ticker symbol GCC. If you are nervous about stocks, several commodities are trading at historical lows, and you could do worse than investing in silver, copper, and raw materials. Dribble money in over the next few months and be prepared to hold on for five years or so.
If you like bonds, go ahead, but as rates rise, your good old cash will start paying in the 3% range, so that’s also a safe haven for you. For now though, I’d sit tight and see what happens over the next week or so. The Fed has yet to decide on another rate increase, and we’re at the start of earnings season. A lot will depend on what the banks (Goldman, Morgan Stanley, Citibank et al) say about the overall outlook and their revenues going forward. Bad news could be a sell signal. Good news could be -- well -- good.
Just don’t be in a hurry to do anything. It’s bigger than we may realize.