Edition #153

Premium Market Update

Investors,

Times are becoming increasingly uncertain, with markets being increasingly impacted by geopolitical tensions. In last week’s premium update, I mentioned how concerns have shifted from Fed tapering/tightening to Omicron, and now to the Russian conflict. While Omicron fears have generally subsided, with several countries completely removing COVID restrictions, the market has still been concerned about the ongoing shift in monetary policy. Investors and market participants are now grappling with these two concerns:

1. Monetary tightening

2. Russia & potential global conflict

It seems we have certainty around the first topic, but the latter is throwing markets into a whirlwind of uncertainty. Will Russia invade Ukraine? When? Will the attack be from multiple fronts? Will the West get involved? Will China get involved? How will trade and energy supplies be impacted? Will there be a diplomatic solution? What will be the economic conditions, fiscal policy, and monetary policy during a war? The nuances of how the market react to each of these questions are difficult to assess; however, the general takeaway is that escalation will create more downside in asset prices. That’s no secret, which is why the market has been hinging on any news pertaining to the Russia/Ukraine situation.

If this uncertainty has been too much to handle, that’s generally a sign that you’re risk averse and that you should likely reduce your equity exposure. If you’ve been able to stomach the uncertainty and don’t mind seeing your stocks decline in the short-term, you’re likely more risk tolerant. Those who reduce their exposure will experience an opportunity cost if/when tensions are resolved, watching the market celebrate higher after they reduced their exposure. Those who do nothing will experience an actual reduction in their wealth should escalation continue. These are the tradeoffs and decisions we must make as individual investors.

In this premium report, we’ll be discussing several key topics & follow-up items:

1. How U.S. stocks have generally performed during former wars & global crises.

2. Are oil & energy stocks still attractive?

3. Nine important “under-the-hood” metrics for the S&P 500.

4. Reviewing my shipping & container stock picks.

5. Update on non-profitable tech stocks.