Nabil Sifo @NabilSifo: "𝐓𝐚𝐫𝐢𝐟𝐟𝐬 𝐏𝐚𝐧𝐢𝐜 & 𝐌𝐚𝐫𝐤𝐞𝐭 𝐒𝐞𝐥𝐥-𝐎𝐟𝐟:..."

Germany

Edited

𝐓𝐚𝐫𝐢𝐟𝐟𝐬 𝐏𝐚𝐧𝐢𝐜 & 𝐌𝐚𝐫𝐤𝐞𝐭 𝐒𝐞𝐥𝐥-𝐎𝐟𝐟: 𝐰𝐡𝐚𝐭 𝐘𝐨𝐮 𝐍𝐞𝐞𝐝 𝐭𝐨 𝐊𝐧𝐨𝐰 𝐚𝐬 𝐚 𝐂𝐨𝐩𝐢𝐞𝐫 Dear copiers and followers, Yesterday, after an announcement by President Trump about new tariffs on Chinese goods, the market experienced massive liquidation. In other words, a massive sell, off was triggered across all asset classes, while some increase in classical (institutional) hedge instruments was noticed mainly speaking about $GOLD and bonds. The reason I mention classical hedge instruments is that crypto was down as well, even though it has nothing to do with tariffs. What are tariffs and why do they kill the market vibe? Tariffs are extra taxes imposed on imported goods. The goal of adding this tax is usually to protect local products and industries or generate income for governments. Sometimes, however, these tariffs are used as political instruments as President Trump did with China this Friday. The reason this disrupts some industries (and their stocks) is that tariffs are paid by the importer, which means the importer has to pass those tariffs on to their customers. This consequently raises the price of goods, and people stop buying those imported products or switch to local alternatives. In the long term, this might sound harmless, but in the short term, it impacts businesses that are heavily dependent on importing or outsourcing manufacturing. Some small /mid cap companies might not survive this impact, and some businesses have to go through costly restructuring of their supply chains or manufacturing processes. Large, cap businesses usually can absorb this initial shock and survive, as they typically have high reserves of cash and cash equivalents or massive ability to raise cash. If tariffs mainly hit importers and outsourcing-heavy businesses, why did the entire market drop yesterday? There are three parts to this answer: 1. The first part, which is the most trivial, is that 80% of investors are buying indexed or diversified assets like ETFs, which represent a collection of stocks. For example $SPX500 or $NSDQ100 .Therefore, when they sell their assets, they sell a large collection of stocks and all stocks get impacted in the short term with this sell off. 2. The second part is institutional investors. These are the big players in the market who hold large amounts of cash, but usually for a limited time. They may need to pay client claims (insurance companies), pay interest on loans (businesses), or cover liquidation requests (investment banks). These institutional investors have a disadvantage compared to us (retail investors): they cannot just stay invested and often have to liquidate their assets during a general market pullback. 3. The third part is the liquidation of leveraged investments. As the market pulls back unexpectedly, many leveraged players (long) get margin calls that they sometimes cannot cover, and their investments get liquidated automatically. All these reasons led to large, scale selling in the market and a broad market drop. Are there more factors that fuel this market drop? Yes, and this is important. When the market drops sharply and unexpectedly, it’s natural for many investors to feel the urge to panic sell. If you’re considering it right now, I see you I feel you “𝐃𝐨𝐧’𝐭 𝐝𝐨 𝐢𝐭” Trust me, I’ve been doing this for many years, I can tell you: panic selling rarely leads to better outcomes. Statistically, those who stay invested tend to outperform those who exit during turbulence. Staying calm and focused on long-term fundamentals is often the wiser path. Maybe now you wonder how to stay calm in these turbulences, right? If you are invested in good businesses with strong fundamentals, you can sleep well at night. Saying you are invested in companies that have nothing to do with these tariffs between China and the US you should know that such events are part of market dynamics. They happen all the time and will keep happening. So, you may close the app now and enjoy a relaxed weekend. I will be at my workstation, giving high attention to the situation and reacting if needed. Recommendation for copiers and followers on adding funds and starting to copy the portfolio: These times in the market, when all assets get punished indiscriminately, are usually a great time to invest in diversified assets like copy trading. If you are not copying my portfolio, this might be a good chance to start. If you are already a copier, this represents a chance to invest more in your copy. However (and this is a big 𝐡𝐨𝐰𝐞𝐯𝐞𝐫) I am not urging you to add funds now, as this turbulence might need a couple more days to clear. Only invest what you don’t need for a long time. Important to know: if you feel anxious about this drop, that’s completely normal. Even professional hedge fund managers had a rough night yesterday. If you have questions or anything you want to know more about, reach out to me in the comments. Best regards, Nabil Sifo

3 Mentioned

GOLD

SPX500

NSDQ100

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