It was an interesting day of trading–although not really much movement after the 1st hour or so–at least in stocks.
The 10 year treasury closed at 1.79%, which is a good bit lower than the 1.87% to 1.94% range we had been trading in for the last couple of weeks. Obviously this is a move to safety after the killing of Iranian General Soleimani.
I have read numerous articles on the affect this will have on the market–and unfortunately they are all pure speculation and mean almost nothing. But this being said a rational person needs to look over their portfolio and see where they might be vulnerable.
The obvious place to be looking for vulnerabilities is in the energy and shipping sectors. If I was a betting person I would expect Iran to attack either oil fields in Saudi Arabia or ships in the Straits of Hormuz in retaliation. I’m not telling anyone reading this anything at all–we all know about these obvious weaknesses. It is the unknown areas that will cause the real issues.
For now I have mostly ‘sat on my hands’. History tells us that this will not be meaningful to income investors–BUT one never knows–if we knew we would have our own reality TV show reading minds and making predictions.
Investors always need to do what makes them able to sleep at night. If that means lightening up for a few weeks, so be it. I think everyone on this website knows that there are no right or wrong answers–just the answer that works for you.