European economic press this past week has published articles about a new investment strategy during the tax chaos.
The European press this week has been full of articles about a new stock investment strategy, adapted to the tax chaos. That strategy clearly shows the professional way of financial investment, that there is no good news or bad news, no complaining about what happens, just thinking about how to act.
European stock markets have fully recovered since the terrible crash in early April, when the US announced extremely high tariffs on foreign goods imported into the US.
The Spanish newspaper Cinco Días reported last Thursday that “the performance of listed stocks worldwide has increased by 19%” since April 2. “Global stocks have recovered from the trade tsunami and are reaching record highs.” So after just two months, the stock index has returned to its previous high, although nothing is clear yet. In addition to the tariff agreement with the UK, the US is still negotiating with other countries. The article said: “Global stock markets are no longer afraid of the US President’s economic measures.” A financial expert interviewed by the newspaper even said that “the market may now enter a consolidation phase, with profit-taking in the summer, the next performance will depend on the direction of businesses.” It was as if the US President had never displayed a board with corresponding tariffs on more than 180 economies.
The European business press has been reporting on a novel investment strategy during the tariff chaos this week. According to Norway’s Aftenposten, the strategy even has its own name, “a term that refers to the tendency to announce sky-high tariffs, causing the market to crash, then reverse course a few days later and the market rebounds.” “Some stock speculators have figured out the pattern, buying heavily when the market is down and then selling for a profit when the market rebounds” a few days later.
The Swiss Times also wrote in an analysis: “Investors have noticed that the US tends to announce a very strong measure that makes financial investors around the world panic, then unilaterally make concessions, when the partner has not had time to do anything”. “Announce extremely high reciprocal tariffs to the whole world, then declare a 90-day postponement. Issue a decree to impose an additional 50% tariff on imported European goods, then a few days later postpone it to July 9”. Increase tariffs on Chinese goods to 145%, then suddenly reduce to 30%. The Swiss newspaper based on that to suggest: “If you are holding stocks, do not sell off when you hear bad news, surely everything will be back to normal in a few days”. Or if you are following a stock with a solid foundation, when bad news from the US causes that stock to plummet, that is the time to consider putting money into buying.