Bulls To Bears: Will You Win The U.S. China Trade War?

The time has come to invest in the world's most populated country and 2nd largest economy!

 

If you're a novice investor and you're looking to buy stocks and get into the China stock market, there are many quality Chinese listed companies that are trading in the U.S. like:: (PTR - Petro China, BABA - Alibaba,  and  NTSE - NetEase) that remain in our sights.  Today, Chinese stocks are the cheapest they’ve been in comparison to the S&P 500 in 2 decades. The data coming out of China, shows some green shoots, that are actually very encouraging. This trade war could be long and drawn out, but for the investors that can see beyond the horizon and withstand some volatility, looking at the emerging markets, more importantly China, might be appropriate. The Chinese consumer is alive and well, just dealing with the ever present loom of the trade war.

 

It is understandable that many investors will remain wary of owning China shares. After all, it is a communist country that suppresses free speech, jail’s people, limits Internet content and uses state-run companies, like banks, to direct where the money is invested. With that said, smaller consumer companies have a great deal of freedom, and the ruling Communist Party has an big interest in promoting economic growth for its people in order to keep unrest at bay. As the Chinese people get richer, they will want more of the finer things in life like traveling, entertainment, education and future prosperity.

 

Trumps Trade war hasn’t just hurt American farmers and Chinese exporters; it has also hit U.S. investors who dumped $2.8 billion into China funds in essentially the first quarter 2019 on top of the $6.4 billion they added in 2018.

 

The next phase of the trade war entails significantly more uncertainty for the consumers in the US economy. The Trump administration plans to tax an additional $300 billion of Chinese imports annually would affect a broad range of everyday consumer goods, including about 80% of all clothing imports, 65% of furniture and equipment, and 90% of durable goods.

 

So, know right now there will be volatility. But that may wind up in the long run being a good thing! Emerging markets stocks have always been rocky, but China stocks have been even rockier. With so many investors worrying about China, stock prices have been oversold off and, in many cases, become very attractive. If you don’t have China stocks in your portfolio, we are urging now is the time to be adding some.

 

In all of history, no economy has made as big of a leap in such a quick period of time as China has in the last 100 years. With a country with over 1.1 billion people who not so long ago relied on the bicycles as their primary form of transportation, they are today the world's biggest automobile manufactures. To boot: They are also the world's largest smart phone maker and are set to surpass the US as the biggest retail market in this year. I reiterate that understand the magnitude that China is the world's second-largest economy number 2 to the U.S.

 

Despite the current pessimism, there may eventually be a tariff-killing trade deal between the U.S. and China. It may even be possible for us to see one soon, according to analysts at Credit Suisse. On Aug. 13, the office of the U.S. Trade Representative said some tariffs the U.S. had planned to place on imports from China on Sept. 1 would be delayed until Dec. 15 and that some tariffs would be removed entirely.

It is important to understand that the most important thing to remember about trading in China today is they are capable of self sustained fast paced economic growth, so it is important to know the real risk in investing in china today is that - it’s risky not to invest there!

 

Are you ready to make a fortune trading stocks and learn to manage your Risk and trade with confidence? At BullsToBears.com our Short-term trading program offers the best of both worlds. We give you the ability to place short, fast, exciting trades combined with controlling your maximum profit or loss BEFORE you trade. With us you can trade hot market sectors all the time with our trading opportunities. Learn more about how you can place top trades in all the best companies you love from one platform, with no brokers or broker fees.

 

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The time is NOW to invest in your future success!

 

Until Next Time... Happy Trading...

Bulls To Bears: U.S. vs China Tariffs and Trade War

As we mentioned before in a previous blog about the subjects.of Tariffs and Trade wars, we reiterate the U.S. will not lose a trade war with China or anyone else! 

What is a Tariff? A Tariff is a tax on products made abroad that are coming into our country. In theory, by taxing items coming in from other countries it means that the U.S. consumer will be less likely to buy that countries products because those goods will be more expensive. The alternative is that they will buy cheaper local products instead and it will in the end boost its countries own economy.

There’s no doubt that America’s manufacturers are still rebounding thanks to actions taken by the Trump administration. The tariffs that President Trump imposed on steel, aluminum, solar panels and washing machines have already created more than twelve thousand new jobs. The tariffs were imposed after probes by the US Commerce Department had declared that steel and aluminum imports are a big threat to Americas national security. President Trump finally took action on those reports and imposed even larger tariffs than what had been suggested by the Commerce Department.

In theory, by taxing foreign steel and aluminium it will mean US companies will buy local steel instead. These tariffs have been welcomed for the most part, by companies like U.S. Steel, AK Steel, Nucor, and Cleveland Cliffs . However, some aluminum producers like Century Aluminum that wholeheartedly supported the tariffs and some companies like Alcoa feel that the Trump administration ins't addressing the core issue of Chinese overcapacity and US automotive companies like Ford, General Motors and Tesla continue to be weary about the possibility of tariffs on the auto industry and automotive component imports.

But, U.S. car companies are doing fairly well. Ford’s North American operations recently posted a $2B in profits in the fourth quarter, while GM’s North American net income were topped by $3B. Even steel consumers like Caterpillar and United Tech have reported very strong results.

Despite all the positive results, condemners of the tariffs, widely among large retailers are claiming the tariffs will in the end lead to hefty price increases.  But that’s not what’s happening now. Prices for new cars which contain plenty of steel products remain steady. And the price of aluminum like that used in canned goods are also rising at a lower rate than that of inflation. This means consumers simply aren’t seeing any major price increases from these tariffs thus far, and core inflation is remaining low just above 2 percent. This means Industrial users of steel and aluminum just aren't currently being affected by higher prices.

In fact, steel prices have actually fallen back to the levels where they were before the tariffs took effect. Also, federal data is showing that the Producer Price Index rose a cumulative 2.5 percent last year in 2018, at exactly the same rate as they did in 2017. These numbers are remaining strong, and it shows that the U.S. manufacturing industry has added plenty of jobs in the manufacturing sector since the last recession.

So what's with all the noise out there about the tariffs? Why aren’t the they causing all of the trouble that were predicted? It is because these manufacturers are simply capable of absorbing any cost increases that have resulted.

Lets face it - the U.S market. is the largest and most affluent in the world, China exporters would rather reduce its prices than lose access to U.S. consumers. Chinese producers are still able to earn huge profits on American sales, thanks to their low labor wages bout $3.50 an hour along with government-subsidized steel and aluminum.

Because their costs are much cheaper, Chinese producers have priced its products high enough to make large profits. But with the tariffs now in place, those margins are at last finally shrinking.

The end result of the tariffs is that the U.S. economy will be much better off. when consumers pay the same for many imported goods than exports and  U.S. producers will enjoy a better competitive margins, and the U.S. Treasury will gain more income from tariff revenues.

Of course, there will always be the cronies who will condemn Trumps efforts in major publications by attacking the tariffs and delivering noise about the high prices that will ultimately deal lower profits to U.S. companies and they will continue to voice their concern for companies that had to pay more money for steel and aluminum last year in 2018. But what you need to remember is the end result of the tariff negotiations are intended to SAVE good paying jobs in America’s steel and aluminum sectors and savet these gigs have been under attack for YEARS by  China's government-subsidized goods on Chinese steel and aluminum products.

The people in the Obama administration should have expressed concern for America’s workers 10 years ago, when China’s predatory behavior and outright technology theft became super apparent. After all, such cheating absolutely violates free markets and free trade. And it has taken a heavy toll on the U.S.economy.

That what is needed and Trump knows it is strong medicine such as these tariffs are simply a necessary recourse here and now. And as America’s manufacturing resurgence in 2018 demonstrates, it is working!

Now, President Trump needs follow through, with his threats of 25% tariffs on another $325 billion in goods like footwear and other sectors not yet subjected to tariffs. The time is now and It is a must that we once and for all curtail China’s cheating and spur more manufacturing job growth in America.

So as far as we are concerned the recent market volatility as of late is fine and ok! The way Bulls to Bears views it- it is short term pain for long term gain. We anticipate a truce at some point in the coming months and Yes this Tariff war with china is the necessary bitter medicine that was needed to fix Chinas unfair trading practices which has hurt our economy and jobs for many years.

We agree with Presdent Trump as he stated "We are, again, in a very, very strong position. They want to make a deal. It could absolutely happen. But, in the meantime, a lot of money is being made by the United States, and a lot of strength is being shown. This has never happened to China before.”

Continue to invest and stay strong and steady. Keep in mind: We believe victory is close at hand.

As we previously mentioned,  we embolden you to Join our FREE E-Newsletter and we will give you our trading perspective that will help you outperform the stock market and place better trades. Again, take advantage of our 14 Day FREE Trial  and get 2 weeks worth of FREE trading signals on stocks that are poised to move higher.

Till Next Time... Happy Trading!

Bulls To Bears: Wisdom and Dollar Cost Averaging

If you have been following the stock market over the past few months, you know that things have been very volatile of late. For a lot of people, all the market turbulence is unsettling. After all, after a stock market correction, how do you know when the time is right to put your money in the market? and when to pull it out?
On occasion every trader, or stock picker dreams of buying a stock right before it skyrockets, turning them into a millionaire overnight. Many traders and investors tend to take short cuts to try and create wealth by trying to time the market. They try to get in before a certain stock, or the DOW takes off... Wouldn’t that be great? But, is it too good to be true? When you purchase a good stock on market dips it isn't. Some traders might get it right once in a while, but unless your "Carnac the Magnificent" you won’t be able to call a stocks ultimate bottom every time. However, we have some good news for you; there is a way to for you to time the stock market and create the wealth your looking for over time with Dollar Cost Averaging (DCA), this involves investing money into a stock at different prices, willingly better ones. 

The main advantage of DCA is so traders can buy more of their stocks at lower prices rather than at higher ones. Below we are giving you an example of an investor who makes 12 smart buys in a year $200 worth of shares each month when a good stock dips and declines and the annual trading range for this particular stock is between $6 and $15 for the year, and how you could avoid the risk of buying $2400 worth of these shares at its peak prices if you were to made a 1 time purchase. 

Here is how dollar cost averaging would look if you broke $2400 down as an IRA investment over 12 months making smart random purchases each month of declining GE stock. For this example below we used the actual 12 month trading history for (NYSE: GE) General Electric between (1)January 2018 and (12)December 2018 when the stock traded between $15 and $6.

2018 Buy dates     Amount invested      Price per share      # Shares purchased

January--------------------$200.00-------------- $14.21-----------------14.00

February-------------------$200.00---------------$15.03-----------------13.00

March---------------------- $200.00---------------$13.24-----------------15.00

April-------------------------$200.00---------------$12.82-----------------15.00

May------------------------- $200.00---------------$15.29-----------------13.00

June-------------------------$200.00---------------$12.78-----------------15.00

July--------------------------$200.00------------- -$13.64---------------- 14.00

August----------------------$200.00------------- -$12.97-----------------15.00

September-----------------$200.00-------------- $11.22-----------------17.00

October---------------------$200.00-------------- $12.00-----------------16.00

November------------------$200.00---------------$7.26-------------------28.00

December------------------$200.00---------------$6.48-------------------31.00

Total $2,400.00 - $12.46 average and 206 shares owned with a Current Price of GE $10.40 - this results in a current Loss of $430 or $2.06 -17% per share, still within striking distance if GE rebounds above $12.46.

If you had decided to put all of the $2400 of GE in December at a $14.21 the average you would have had on 176 shares at $10.40. You would be down -$4.22 a share or -$670 = -28% with an  $14.21 per share average. 

(DCA in this scenario Leaves you with more shares of GE and a lower cost per share, as well as smaller % loss .)

A downside to DCA is that investors don't have an opportunity to buy additional shares at lower prices if the market is in a prolonged bull market. However, even in a bull market on big down days or a sharp market correction it does allow an investor to reduce their average cost as they hold the shares through dollar cost averaging.

As you can see from the scenario above is why we know DCA is so effective and is so simple to implement that you can get started investing in your future fairly easily with a small amount of money, and consistently invest it over time and that you don’t need a lot of money to start trading. You should always be investing consistently, even when the market is down (more shares for your capital), you continue to invest this way it’s a savvy, tried and true way to build wealth at the same time limiting some risk.

Another negative aspect of trading this way with DCA is you incur more fees. Dollar cost averaging means making more transactions, which can result in higher brokerage fees. But you benefit when you don’t pay any transaction fees if you are investing in a 401k or an index fund that doesn’t charge commissions.

There is always risk involved when your trading stocks or investing in anything, and you need to be very careful. But, you can reduce a lot of risk and build a nice piggy bank, for yourself using the dollar cost averaging strategy we teach. When our members use a combination of the dollar cost averaging and our market timing strategies to buy stocks they tend to see their investments rise in value and who doesn't like to see a drastic increase in their investments? Bare in mind, investing is for your future, and should always feel like a long drawn out process. Historically, the stock market has risen over time. So, don't take short cuts to wealth, by trying to time the market! Instead adapt to a DCA strategy.

In conclusion, the point of dollar cost averaging is not to try and time the market or a particular stock– it is to save or invest with amounts of money you can afford. The amount you can invest could be as low as $25 a month or into the thousands. The point here is that you get into the habit of investing, and dollar cost averaging provides you with an easy and affordable way to invest your money into stocks on a regular basis with small funds.

If you like the idea of using DCA as an investment strategy you’ll benefit from subscribing to our FREE NEWSLETTER. Our articles and Trading Tips, are there for all traders and investors to explore as well as some of our tools and techniques we are show our paid subscribers. 

We also offer a 14 DAY FREE TRIAL so you too can learn knowledge for yourself about market structure, trend identification, cycle analysis, volatility, volume, when and when to trade, position management, and how to put it all together so you have a winning edge.

Again, the time is NOW to invest in your future success! We look forward to seeing you soon.

Till Next Time... Happy Trading!