Hi there,
Look, I get why you’re confused right now.
Every financial news outlet you follow is talking about tariffs, your Twitter (X) feed is full of posts like “this can’t last much longer”, and meanwhile, you check your brokerage account and… your portfolio is doing just fine? The S&P and Nasdaq are basically at record highs.
I know you’re thinking: WHAT THE HECK IS GOING ON?
Here’s What’s Really Happening
First, company earnings are significantly beating Wall Street expectations. And it’s many companies across sectors, from tech to banking to consumer staples. Earnings beats aren’t just numbers—they’re a sign that businesses are still growing despite higher costs and drastic policy changes.
Second, everyone is betting on rate cuts again. July’s jobs report was absolutely horrendous, but it did increase the odds of a rate cut from just 37% to 80%. And honestly, when borrowing gets cheaper, everything else follows—investors invest more, consumers consume more, and suddenly the valuations you've been watching look a lot more attractive. It’s exactly what happened during the 2020-2021 pandemic.
Third—and this might sound weird—some professional investors actually think tariffs could help the chances of multiple rate cuts. Here’s the logic: if tariffs slow things down just enough to keep inflation in check, the Fed gets more room to ease policy. I'm not saying the theory is bulletproof, but it is influencing the steady increase of stock prices.
So What Does This Mean for Everyday Investors Like You?
When I see stock prices increasing, despite all the bad news out there, it usually means the big institutional investors aren’t focused on today’s headlines. They're focused on what’s coming next.
That doesn’t mean tariffs don’t matter. It means traders believe the positives (earnings strength and rate cut potential) outweigh the negatives for now.
So, if you’re a long-term investor, here are some strategy suggestions:
Review your portfolio and make sure you’re diversified across sectors: You don’t want to be overweight in companies that are vulnerable to trade tensions—certain industrials and materials. But also, don't abandon growth companies that are beating earnings and showing Q2 strength.
Don't let short-term headlines drive your decisions: You're likely to see more policy announcements in the near future. Know whether the businesses you own are actually impacted before you think about selling any stock.
Gradually add strong and growing companies to your portfolio: Sectors showing consistent earnings beats—technology, financials, consumer discretionary—deserve your attention. Slowly add exposure rather than investing all your money at once.
The Three Things You Need to Avoid
🚫 Chasing only the hottest stocks — By the time a stock makes the news for a big rally, often you’ve missed the easy money.
💡Pro tip: You’ll learn how to spot big moves early as an Earn Out Loud PRO subscriber. Here’s an example from August 5th where we highlighted Apple just one day before its 3-day rally from $202 to $229 - click here.
🚫 Selling everything because of one headline — Reacting emotionally often backfires. Don’t overhaul your portfolio every time you see a trade announcement. If the underlying business is still solid, your investments will be too.
🚫 Ignoring risk management — Even when things are going your way, your portfolio should have some level of protection against unexpected developments. Try managing risk through diversification, position sizing, or defensive assets.
What’s Next (Pro Subscriber Preview)
Tomorrow's issue covers three specific ways to take advantage of this market environment—including the best stocks to buy and option strategies designed for profits while also protecting you against tariff concerns. PRO readers will get the exact investments to consider, when to buy them, and how to manage the positions.
Until then, happy investing.✍️ -Isaiah from Earn Out Loud