Year to date, the pundits and media have had a feast of content to interpret for the public. Volatility picked up in the first quarter, and continued in the second, driven by headlines that boast varying positions on the economy, politics, immigration, global trade and tariffs. Unfortunately, bias is prevalent and facts can be easily misrepresented or omitted to push a narrative instead of objectively presented to illuminate the full picture. In this quarter’s client letter, we will attempt to distill the current investing environment down to key points and explain what it means for your portfolio.

The most prominent headline: trade and tariffs.

The US economy, as measured by total GDP is approximately $19.4 trillion. US trade with foreign countries was $5.2 trillion in 2017, $2.3 trillion of exports and $2.9 trillion of imports. Although the figures suggest a trade deficit, it’s important to understand the full context of international trade relations, as it can vary considerably by country. Trade, at its simplest, is balanced by definition. It is an exchange of one thing for another.

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