Investing for the Long Term: A Conversation with Marc Lichtenfeld

King Copper slides on trade war fears
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Before sharing with you my interview with Marc Lichtenfeld, chief income strategist at the Oxford Club, I think a mea cupla is in order. When President Donald Trump began imposing tariffs on China and other U.S. trading partners, I believed it would have a negligible impact on metal prices. The main reason why I thought this was because I assumed the tariffs would be very short-lived and that negotiations would be swift. Clearly I underestimated the effects of Trump and his economic advisor Larry Kudlow’s China bashing. As you can see above, the tariffs and rhetoric have been a strong headwind for copper, which has long been seen as a barometer of the global economy. This could mean further weakening for a handful of other metals and commodities. Zinc, for instance, has been badly hammered.

Trump’s selection of Kudlow as economic advisor, I believe, has only helped aggravate the rhetoric between the U.S. and the world’s second largest economy. In March, when Kudlow was appointed, I described what I’ve viewed for many years as his bias toward gold and China. Remember, it’s not the political party as it is the politics that investors should care about.

The trade war has also turned up in the U.S. Global Sentiment Indicator, which recently dropped to the 20 percent level, indicating that markets are oversold. Investors appear to be concerned.

back to oversold territory
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It’s not just investors, though. The University of Michigan announced today that its consumer sentiment index dropped to an 11-month low in August.

Ramifications of the trade war are showing up across the board. It’s important to remain diversified in short-term government and municipal bonds, and to think long-term, while we wait for a potential short-term rally.

My good friend Marc Lichtenfeld from the Oxford Club has always been savvy in following such strategies. I invite you to learn from his investment journey in this special Q&A.