Market Corrections and When to Buy Back in to Stock Markets?

We have been warning about Trump ‘thumps’ i.e., President Trump and the possible effects of tariffs since 7 December 2024 before the President Elect was inaugurated. 

We said in our traffic light Alert on 7^th December that: “It’s a mess out there and, as you already know, we have been worried for some time and are maintaining our ‘buy low/sell high’ stance.  We continue to drip feed out of the West (all markets at or near their year highs) and drip feed into the Far East (still 7-14% off year highs).  We wait with fear/anticipation on how far Trump will hit global trade with tariffs which could be 20%, 30%, 40% or even 60%?  Confused?  So are we.“

In every single weekly alert since then (that’s 4 months and 16 X weekly Traffic Life Alerts) we have warned investors of potential correction (-10%) or even crash (-20%) and that we were ‘drip feeding’ out of the West.

Given Mr Trump’s tariff announcements last Wednesday, there was a ‘bloodbath’ in markets last week and then this Monday.

FTSE 100, FTSE 250, Dow Jones, S&P 500, French CAC and Japan’s Nikkei, all set year lows on Monday with a staggering average of nearly -20% off all year highs.

Market Lows on Monday 07/07/2025

The Golden Rules of Ashley and Joanne Roberts-Clark (directors of Financial Advice.net)

1. When we personally have made +10% gains or more in a sector, we are not greedy, we are ‘fearful when others are greedy’ and we start to ‘drip feed’ out of a sector or completely disinvest from that sector to hold in defensive areas such as cash funds and index linked/fixed rate gilt/bond funds.
2. When we see sectors have fallen -10% or more in a sector, we are not fearful, we are greedy, and we start to ‘drip feed’ into that sector or completely invest fully into that sector and disinvest our ‘opportunity’ reserves in cash funds and index linked/fixed rate gilt/bond funds.

We do not believe in making this complex as many market commentators, economists and fund managers get it wrong all the time.  It is impossible to ‘call the market’, so why try?  Stick to a phrase attributed to Warren Buffet “Be fearful when others are greedy and be greedy when others are fearful”.

Current View

We don’t get it right all the time, that’s impossible, but we do generally get results based upon our ‘golden rules’, also trying to second guess what consumers and businesses are likely to do upon each possible event.  We have now started to drip feed back into markets with our own funds but we are mindful that tariff and trade war is not over with China and the USA ‘headbutting’ each other at present, so we are drip feeding in to spread investment risk over the coming months with the comfort to know that we started buying back in with some indices some -27% off their year high on Monday, meaning with are confident of buying for value despite the way ahead being unclear.

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