Newton’s Third Law of Physics and Today’s Market Action
Newton’s Third Law of Physics states that: for every action, there is an equal and opposite reaction.
While this law is applicable to physical movement and force, there is also some argument that can be made that this can also apply to choices we make in life – for every actionable choice, something will happen as a result.
Man, are we seeing this come true today in the US stock markets. The markets have been absolutely crushed by the news of reciprocal tariffs being imposed by the Chinese on a number of US imports as a result of tariffs recently imposed by President Tump on a handful of Chinese imports.
The market was already fearful of a trade war with China as a result of the tariffs, and it appears the fears were with merit. The “farm belt” in the US is particularly concerned, as they are big exporters of produce and other crops to China, and whose products will be impacted by the stiff Chinese tariffs.
When making a big decision, you must consider the potential impact of the reaction your decision will cause. It certainly appears that President Trump is willing to take drastic action without counting all the costs or considering the potential reaction. For someone who has taken credit for the stock market doing so well, he must also take the blame when the Dow drops 700 points based on his actions, which were fairly controversial in the first place.
While I am not too concerned about short-term price declines in the markets since I have a long-term investment horizon, the bigger concern is the continued uncertainty caused by decisions made with a perceived lack of care or support – what is the next decision that will haunt the markets? More care must be exercised in big decision making.
Just my two cents.
Brian
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None of this worries me too much because, like you, I invest for long term in solid companies. Hopefully the upcoming earnings season will bring more positive news.
Canada has been feeling the impact of Trumps decisions as their has been repeated threats to impose and increase tariffs on a variety of resources that we have been trading with the US for years. It doesn’t feel like international relationships are important these days when it comes to the economy.
Yes. I agree with your pint of view. Thanks for this great post.
That law of Newton applies in any circumstance, bad for the market of the United States, hopefully the panorama improve, thanks for your information friend
I totally agree with you my friend, I was hit very hard in one of my stocks that reacted to the president's careless talk. I was forced to sell and search for something more stable. This guy has got to be mindful of what he do and say.
Friend Brian, President Trump must be more cautious when making decisions like this that can affect the economy not only of your country, but of the stock markets. With China you have to think with your portfolio and not with your feelings, because unfortunately they are getting stronger and stronger. All the best for you and yours. Best regards.
I know little about the American market but those Chinese people want to be everywhere or everyone wants to do business with them or I do not know, here in Venezuela the government has many agreements with them, we depend on the Chinese, hopefully things will improve
btw thanks brian, for always upvoting my material, super nice of you
All these losses are being seen in the US government, friend @brian.rrr, it is incredible how the trump president is making all these negotiations with China and he is practically forgetting his country and its citizens. Also worth mentioning is the 1.3 trillion dollars that President Trump has donated to other countries for different situations. All these things are very important and it is incredible how the prices have fallen, well I'm glad that you have many long-term investments and you will not be affected so much by the fall in prices because you recover with your investments, the bad is for those people of that they have no investments or anything, if they will be greatly affected by this fall in prices. But I hope things can improve for the better and everything stabilizes. Greetings friend