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Why You Shouldn't Trade the Trade War


Published on 2025-02-19 08:21:16 - Morningstar
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  • The trade war continued to play out over the course of 2018. Tariffs expanded, and retaliation came
  • most notably from China. Manufacturers reported higher input costs and lower margins. Worries grew that companies would pass these costs on to consumers. The inflation rate ticked up to 2.4% in 2018 from 2.1% in 2017.

The article from Morningstar titled "Why You Shouldn't Trade the Trade War" discusses the complexities and unpredictability of trade wars, particularly focusing on the U.S.-China trade tensions. It advises investors against making knee-jerk reactions to trade war news due to several reasons: the long-term nature of trade disputes, the difficulty in predicting outcomes, and the potential for misinformation or exaggerated market reactions. The piece highlights that trade wars involve numerous variables including tariffs, negotiations, political rhetoric, and economic indicators, which can lead to volatile market movements. It suggests that instead of trying to time the market based on trade war developments, investors should focus on long-term investment strategies, diversification, and understanding the broader economic implications rather than reacting to daily news. The article also points out that while certain sectors might be directly affected by tariffs, the overall market impact can be less predictable, advocating for a more measured, strategic approach to investing during such uncertain times.

Read the Full Morningstar Article at:
[ https://www.morningstar.com/economy/why-you-shouldnt-trade-trade-war ]