What Cruise Missiles and China Mean to Your Investment Retirement Plan

IMG_164359 Tomahawk missiles to Syria. Oh my, we’re at war again…or are we?

To add to the confusion, The Chinese Premier Xi Jinping is visiting Washington. China is an important trading partner for the United States. However, Trump’s tweets have not been very complimentary towards china.

Do I sell? Do I buy? What does this mean to my retirement plan and my portfolio?…. so many questions!

First off, do not read too much into the Syrian attack. This was just a new President posturing, which I deem positive for the country. It’s good when the world knows we will back up our words with action. The Russians will fall in line.

There has been a lot of big talk from the new Trump Administration on foreign policy so far, but nothing has spooked the market more than his hardline stance on China. After all, China holds $1.12 trillion dollars of U.S. debt, just behind Japan with $1.13 trillion.

Trump is hitting China from both ends. They must help us neutralize North Korea and also play fair in the world currency market, where China artificially props up their currency. This gives them an unfair advantage in global trade, which Trump claims costs millions of American jobs.

I agree that China can control North Korea but, why would they? It’s like asking Russia to control Cuba during the Cold War. Nevertheless, I believe North Korea has nothing we should fear and is nothing more than a distraction. The real issue is global trade.

The reality is that just because China may benefit doesn’t mean that U.S. loses. China does hold a large trade surplus while America holds a huge trade deficit. However, 40%of the trade surplus China holds is actually generated by U.S. companies doing business in China. But wait, there’s more. China claims that the two countries’ bilateral trade and investment has created 2.6 million American jobs and saves American families over $850 every year due to cheap Chinese goods.

China cannot live without us either. Over 20% US exports to China is agriculture related, with the single largest item being soybeans, valued at almost $15 billion. From there the next biggest imports are crude petroleum, cars, gold and iron ore.

China’s biggest exports to the United States are computers and computer chips, telephones and office machine parts. Basically, cheap technology parts that keep our costs down.

So, forget all the rhetoric and brute posturing. This is how the New World fights wars. No longer will superpowers send troops into battle to see who reigns supreme. It’s all about trade. “Show me the money!”

Investor Strategy

There is a lot going on that can easily distract you from the real picture: building a retirement master plan that is designed for you and your family, not a one size fits all. When building your retirement master plan and managing your portfolio, be sure you are set up properly to get the best returns…but with the least risk possible. Or what I like to say on my show “Invest for need, not for greed”™. It’s what we do for our clients every day.

I’m sure I don’t have to remind you that, at this point in your life, you cannot replace this money! Be the expert or work with a Retirement Advisor that can help you stay on track.

Now is the time to review, not only your portfolio, but your overall master plan. Things have changed and it’s time to Trump up your portfolio!

As always, feel free to contact me with any comments or questions.

Cheers -Keith

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