One financial advisor says that market disruptions can provide strong buying opportunities for investors, comparing the current tariff uncertainty to the COVID-19 pandemic.
On Friday, U.S. stock markets finished slightly higher after a weak start to the trading day, breaking a four-week losing streak. Equity markets had been declining amid a trade war between the U.S. and other nations that could spur inflation and impact consumers and businesses. Jeff Hull, senior financial advisor at Manulife Wealth, said in an interview with BNN Bloomberg Friday that markets have come a long way since the pandemic five years ago, which reordered supply chains around the world.
“What people need to realize is to get great companies at a great price, you need fear in society a bit, whether it’s Donald Trump on nightly TV keeping everybody off balance or wondering or worrying. It could be a temporary event driven opportunity, a weather opportunity, or even another pandemic,” he said.
“Sometimes it’s hard to get some of the world’s best businesses at a discount. And the way we get those discounts is usually at a time of crisis or worry. So, I would say fear stands for false evidence appearing real. A lot of people have emotional worries that sometimes aren’t in reality, and that we start to find good bargains on great businesses out there.”
According to Hull, a lot of the same companies that preformed well during the COVID-19 pandemic could face similar upside during a trade war. Specifically, he highlighted companies operating in the subscription economy like Netflix and Spotify.
“Under the threat of tariffs, whether they’re real or not, or on or off, these companies don’t have to worry about tariffs,” Hull said.
“Netflix is just in the cloud. It actually operates off of Amazon’s web service. There’s no border that it has to wait for when they ship you a movie when you’re streaming live. There’s no tariff, there’s no truck transport, train or plane. You don’t have to worry about the cost of fuel as an example.”
With files from The Associated Press
