These have been stormy days…U.S. and global equity markets are in turmoil because of factors related to U.S. – China trade tensions. The current market sell-off has punished U.S. equity stocks driving them to levels well below recent highs and has driven many domestic stocks to 52-week records low prices.

Although most observers continue to forecast that a trade deal will be reached between the two trading partners and two largest global economies since successfully negotiating a trade agreement would be in each nation’s best long-term political and economic interest. However, in the short term, global equity markets are in a tizzy due to the break down in trade talks and the tit-for-tat increase in trade tariffs that went into effect over the weekend effecting Chinese imported goods into the U.S., and China’s announced retaliation to increase tariffs of U.S. goods coming into China.

Currently, neither the U.S. nor China wants to appear weak and to give into the demands of the other. Additionally, the U.S. has accused China of backtracking on prior negotiated and agreed to key trade commitments. In a recent NYTimes article, they reported that POTUS is betting on the strength of the U.S. economy to withstand the impact of the escalating trade tensions and increasing tariffs.

Let’s not overlook the fact that China with respect to global trade has been a serial bad actor for many decades. In fact, the Chinese coerce foreign companies wanting to provide goods and services in China to partner with and transfer intellectual property to a domestic Chinese company; they run roughshod over WTO rules by erecting barriers and rules to create a non-level playing field for foreign companies to provide financial and other services inside their economy; and, they encourage their business and governmental organizations to acquire western intellectual property through cyber theft and commercial espionage. Since stepping onto the global stage for trade, they have ignored world trading rules and acted ruthlessly in their own best interest.

Given current global trade turmoil, how should the long-term investor react to short-term market selloff and volatility.

Most financial analyst look at the strong fundamentals in the U.S. economy citing growing first quarter GDP, robust job numbers, and low inflation. Their belief is the economy can weather the current trade tensions in the short term. Although, they agree that there will be headwinds to the economy both domestically and globally if this trade tiff drags on for an extended period of time. Thus, given the strong economy and even stronger belief that there will be a trade deal sometime in the future, long term investors should stick to their long-term financial plan, tune out the over excited financial entertainment media pundits and take the opportunity while stocks are on sale to buy low.

“I’ve wrestled with alligators. I’ve tussled with a whale. I done handcuffed lightning, and throw thunder in jail. You know I’m bad. Just last week, I murdered a rock, injured a stone, hospitalized a brick. I’m so mean, I make medicine sick.” — Muhammad Ali

“I am the greatest, I said that even before I knew”. — Muhammad Ali

To achieve financial freedom, it’s imperative to develop an aversion to the word “can’t”, that you can’t achieve financial freedom,…instead, it is imperative to believe that “…you can do whatever you want in life”. Individuals, who want to have a Financial Growth Mindset, must believe they can and be willing to work hard and smart, and become financially literate.

It is hard and takes effort to reach one’s goals of financial freedom and literacy. It takes never giving up to do apparently amazing things in spite of seemingly gigantic odds. But, if an individual really put effort into something, they can accomplish more than they ever thought was possible.

To put in that kind of effort, to persevere even when times are rough, an individual must first believe that success is possible. This belief that success is possible is the magic of mindset. It is the scientifically-proven phenomenon that believing in something actually makes it more likely to be true.

A large amount of research has been conducted showing that believing in one’s continued ability to learn, grow and improve in any endeavor, including financially, really does make it more likely that an individual will succeed.

Want to live a happier, a more fulfilled life? Change your mindset to one of continued financial growth, learning, and improvement.

There once was a brash young heavy weight boxer from Louisville, Kentucky, who had the ultimate Growth Mindset and proclaimed it loudly to the world, “I’m the Greatest of All Time”. The result, three time world heavy weight boxing champion Muhammad Ali would over a boxing career transcend the sport and become a legend.

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The first step to becoming financially independent starts with the mind. Before starting your debt free plan, be real with yourself about money.

Why do you want to be debt free?

What does financial independence mean to you?

What will you be able to accomplish once you are debt free?

What would you do with your life?

How will this journey impact you, your family and generations to come?

Thought-provoking questions can reshape years of negative thoughts, intentions, and bad habits with money.

Before I started my debt free journey, I allowed myself to dig deep into the plans that I had for my future. I wrote down goals (several times), dreamt about the future, practice gratitude and got excited about the result. With my new plan in place, I felt determined and even more disciplined to see the journey through.

Challenge and Interest go hand-in-hand in the Growth Mindset. Think – this is challenging and fun. It is about learning something over time. The point…”who cares if you cannot yet do it now…you will do it in the future.” Think and believe… I cannot do it yet… and becoming is more important than being.

The two most dangerous words in people’s vocabulary are “I can’t”. Never say “I cant” and instead, say “I presently struggle with…”.

The two most powerful words are… “I am”. Must be careful were we place our identity.

Here are the recent financial and economic headlines: 

• Strong U.S. jobs report was released on Friday with unemployment falling to the lowest level in fifty years.   
• The Federal Reserve is holding on moving the Federal Fund interest rate.   
• U.S. Inflation rate is lower than economist expected and trending around two percent.  
• U.S. economy has been very good with GDP reported to be growing at a robust 3.2 percent during the first quarter of calendar year 2019.   
• The economy has experienced consistent growth for more than ten year despite periods of short term market volatility, sell-offs and negative headlines.   
• POTUS tweeted late Sunday threatening to raise tariffs on Chinese imports. The tweet has riled and caused a sell-off of U.S. and global equity markets during the first full week of May. 
• U.S. financial media reporting that the Chinese trade officials are considering postponing travel to the U.S. to continue trade negotiation talks.
• U.S. – China trade negotiations continue with most economists and financial experts assuming that a trade deal will be successfully negotiated since many believe a bilateral trade deal is in the best interest of both parties. 

With the recent headlines, what actions should a long term investor take in view of the headlines, current short term market volatility and sell-off?   

A long term investor should take no short term actions other than to follow their long term financial plan and maybe decrease the volume on the financial media/entertainment networks. If in doubt, they should call their financial adviser for emotional support.