Daily Commentary

MarketMinder’s View: According to this piece, investors who focus on age and expected lifespan when constructing their portfolio may end up with an asset allocation (the mix of stocks, bonds, cash and other securities) that isn’t aligned with their investment goals and individual circumstances. We agree! However, the titular questions presented here to help investors dig deeper seem oversimplified to us, and the piece still leans too hard on age. For example, the first question about whether your asset allocation is “reasonable” at your age overlooks some critical points raised in question two about individual considerations (i.e., what if you want to leave asset to heirs?). Rather than zero in on age alone, we think investors are better served asking about what kind of growth they require. Having a “high” stock allocation capable of delivering long-term growth may make sense for an 80-year-old investor if they want to leave a gift or legacy that lasts beyond their lifetime. It may also be necessary to support cash flows and reduce the risk of outliving your assets, especially if you have a younger spouse or dependents. We agree with the thrust of questions three (do your allocations reflect a long-term strategy or reaction to recent market movements?) and four (do you have sufficient diversification?). We would add diversification means spreading your assets within your strategy’s components, not simply owning many things. For more on that, see this week’s commentary, “Investing Isn’t Collecting, Private Equity Edition.”

MarketMinder’s View: After President Donald Trump paused tariffs for most trading partners, some shipping and logistics firms are reporting that businesses are re-booking recently canceled orders. (As a reminder, MarketMinder doesn’t make individual security recommendations, and companies mentioned here are coincident to the broader theme we wish to highlight.) We think the expected surge in freight orders highlight two notable themes. The first: businesses’ adaptability. When governments announce changes, companies don’t sit around and wait—they act. As one container line CEO mentions here, “We are seeing order [sic] in everything from construction equipment, engines, truck parts, dinnerware, cranes, agriculture equipment and booze among a lot others. The ships are filling up.” The second theme: Tariff policy has created a lot of uncertainty, which makes it more difficult to do business. As a freight service company executive out of Mexico noted, tariff uncertainty has discouraged commerce, with companies putting many shipments on hold until they get more clarity. Now, from an investment perspective, we don’t think folks benefit from trying to trade based on tariffs. Unless you know something others don’t, you would likely be acting on information many others are already aware of (and acted on), which is therefore priced in. In our view, staying patient focusing on your longer-term goals is the wisest move right now. For more, see yesterday’s commentary, “Positive Volatility Still Calls for an Even Keel.”

MarketMinder’s View: Tariffs have dominated headlines recently, but deflation remains a lingering—and false—fear in the Middle Kingdom. Yes, China’s consumer price index (CPI) declined a second consecutive month. But March’s -0.1% y/y mild dip after February’s -0.7% is in line with a yearlong trend of flattish prices. Moreover, core CPI (excluding volatile food and energy prices) rose 0.5% y/y after a -0.1% February dip—evidence prices weren’t broadly down across the board. Little here looks like the dastardly deflation of the Great Depression, not least because recent money supply growth argues against falling prices. The rest of the article worries the US trade conflict will deliver yet another setback to China’s flagging economy, which says more about sentiment than reality, in our view. To be clear, tariffs are bad economic policy and make it more expensive for businesses to trade. But with consumer demand more resilient than appreciated and manufacturing activity picking up, China looks likely to continue to add to global economic growth—an overlooked positive, in our view. For more, see last month’s commentary, “Delving Into China’s Latest Data Dump.”