๐๐ฒ๐ฎ๐ฟ ๐ฎ๐ป๐ฑ ๐จ๐ป๐ฐ๐ฒ๐ฟ๐๐ฎ๐ถ๐ป๐๐ ๐ถ๐ป ๐๐ต๐ฒ ๐บ๐ฎ๐ฟ๐ธ๐ฒ๐
There is no doubt that the market is currently driven by fear and uncertainty. As a result of this uncertainty, U.S. stock markets have experienced significant losses. From February 19 to March 12, 2025, the S&P 500 index has declined from 6,144.15 to 5,572.07, a drop of approximately 9.3%. This decline is mainly due to growing concerns regarding President Donald Trump's trade policies and the imposition of tariffs on key trading partners such as China, Mexico, and Canada. In the same period, for example, $TSLA (Tesla Motors, Inc.) is down 36% and $BTC is down 21%. That's dramatic and a clear symptom of fear and uncertainty in the market.
In February, the trade conflict escalated significantly after President Trump threatened to impose a 25% punitive tariff on all imports from Mexico and Canada. Towards the end of the month, he confirmed that the measure would take effect in early March. At the same time, the U.S. imposed a 20% punitive tariff on Chinese goods, distributed over two rounds in February and March. Trump has also signaled a potential 25% tariff on imports from the EU.
These measures have fueled fears of a widespread and prolonged trade war, which could lead to increased inflation and reduced economic growth. Many companies are facing greater uncertainty regarding the demand for their products, risks of supply chain disruptions, and higher costs, which could dampen investment willingness.
Additionally, defensive investments such as the utilities sector and U.S. government bonds have seen increased demand, as investors seek safer alternatives amid market volatility.
Personally, I see this bear market as a natural correction due to the strong stock market performance in 2024.
As previously mentioned, I typically make adjustments to my portfolio at this time of year. I am now ready to make changes and rebalance the portfolio. However, due to market uncertainty and falling prices, I am temporarily putting this plan on hold until conditions become more bullish. The reason for this is that there is always a time gap between selling and buying. I prefer to wait for better market conditions before making any sales. The market can turn quickly at these levels, which indicate that the broader market is oversold. That being said, the portfolio is currently performing well compared to the overall market, and after a detailed analysis, 11 of the companies in the portfolio continue to show strong potential for significant returns over the next 12 months. These companies will regain my confidence and remain in the portfolio.
It will be an interesting March, and hopefully, the stock market will bottom out at these levels.
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