You need to protect your portfolios again immediately.
Markets could easily return to December 2018 lows after the latest trade war news.
Over the last month, markets pushed higher on hopes for a trade war resolution. That was until Larry Kudlow told Fox Business, “The president has indicated that he’s optimistic with respect to a potential trade deal. But we’ve got a pretty sizable distance to go here.”
With those three untimely words, “pretty sizable distance” markets fell apart.
Remember, if China and the U.S. cannot reach a deal by the start of March 2019, additional tariffs on Chinese goods will take effect. That’s likely to include tariffs on $200 billion on Chinese goods to 25% from 10%. Should that happen, we could run into further global economic slowdown fears, and further market downside.
Making matters worse, the European Commission just cut its outlook for the euro zone as it expects for its largest economies to be hurt by global trade tensions.
It’s part of the reason the Dow Jones fell 220 on Kudlow news.
Then, President Trump said he would not meet with Chinese President Xi Jingping before the March 2019 deadline adding to the volatility.
In short, if there’s no progress, markets could begin to pull back severely.
And we could see the Volatility Index (VIX) spike again as it did in December 2018.
Should that happen some of the best ways to safeguard your portfolio is with trades that spike along with volatility, including:
- Velocity Shares Daily 2x VIX Short-Term ETN (TVIX)
- The iPath S&P 500 VIX Short-Term Futures (VXX)
- ProShares Ultra VIX Short-Term Futures (UVXY)
Now is not the time to be foolish in the markets.
We could see a good deal of pain and downside ahead if the trade war enthusiasm dies off.
The last thing you want to do is be unprepared for what could happen.
If you remember the December 2018 sell-off we asked you to prep for, you’ll act now to protect your portfolios from potential doom and gloom.