The phrase, “In like a lion, out like a lamb” always referred to March and the weather.  If the winter weather was still going full blast, the hope was that March would end with mild weather or vice versa.  As far as the equity markets were concerned, March started like being on the wrong end of a fight with a bunch of lions.  Definitely not a good idea.

I am a “free market trader”.  Any time you try to regulate trade, and history supports me on this, it hasn’t worked.  Combine President Trump’s announcement of tariffs on steel and aluminum with the fact that we could see as many as 4 rate adjustments by the federal reserve this year and you have a jumpy stock market.

February marked the first time in almost a year and a half that the S&P 500, as measured on a total-return basis, fell 2.6% over the course of the month.  That drop represents the benchmark index’s first such decline since October, 2016, meaning an uninterrupted 15-month rally that came to a close.  The article about stocks testing the lows of February is a nice summary about the potential effects of a trade war.

And, our old friend Alan Greenspan is back in the news.  (Mr. Greenspan was chairman of the federal reserve board for almost 20 years).  As I mentioned in last week’s digest, interest rates are becoming more than just a blip on the horizon.  The federal reserve board will raise interest rates several times this year.  That causes all borrowing to cost more, whether it’s a car loan, home equity loan or a mortgage.  It also means investors could move some of their investment dollars from stocks to bonds.  We’ll just have to wait and see how all of that might affect equity markets.  Regardless of what happens, the investment strategy that is used, while not guaranteed, protects against fast, sudden and steep drops.

Finally, my mother always used to tell me that “an apple a day keeps the doctor away”.  Now, there seems to be science that suggests an Avocado a day may keep the cardiologist away.  Hope you enjoy the article and have a super week.

Doug Alden

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