TACO Monday

If you panicked and clicked the ‘Confirm Sell’ button on Friday, well, you earned it. Never, ever trade on emotion. You’ll lose.

Yup, things looked sucky and dire a few days ago. We detailed the misery here yesterday. And we also told you (over and over and over and…) to ignore the noise. Not to sell into a storm. Relax, walk the dog. Wait.

This morning the TACO president did it again. He backed off the irrational, extreme position of escalating the Middle East conflict further by bombing power plants just a day and a half after threatening it. Good. It would have led to retaliation and massive human misery – plus a beefier energy crisis and financial mayhem.

Over the last few days Mr. Market squawked. Mr. President responded. On the tarmac beside Air Force One this morning he claimed productive, constructive talks with some guy in Iran (not the supreme dude) that he trusts, telling reporters it would all be okay because he was, you know, winning. Officially, Iran said Trump’s news was fake since the country’s leadership hadn’t talked to anybody, let alone the big banana.

What’s the truth?

Doesn’t matter. If America stops bombing because Trump fears a further drop in the Dow and the S&P 500 or a hike in West Texas crude, then it’s all cool. At the opening today equities surged 2% higher and oil plopped 10% lower. Gold pared its recent losses. The US dollar surged. Bond yields dropped. Debt prices increased. Pressure came off central banks as inflation expectations crumbled.

Yes, all that in less time than it took your Back Lab to wake up.

What now?

What he says, probably. This is Trump’s bus to drive. He can blow stuff up and ignite more market volatility and global reversal, or go full TACO, let Iran get back to being a problem and see oil flow normally. It was a war of choice from the start. In the last few hours, he chose to chicken out.

If the conflict winds down (now the likely path) markets may soon retake recent record highs. Energy costs will fall dramatically from the war levels of last week. The threat of 5% mortgages in Canada by the autumn will fade. Investors who rushed into cash during the trip down will regret not being in the game today.

Precisely because of what just occurred, and the fact we have no idea what happens next, you should have a balanced and diversified portfolio. Growth assets and safer stuff. Things that produce capital gains and those which kick out income. Equal chunks in Canadian, US and international equities. A quarter or so denominated in greenbacks. Stuffed TFSAs and appropriate amounts in registered retirement funds.

Invest when you have money, not when your gut tells you. Rebalance annually or on a specific schedule – selling winners and buying losers in order to restore that balance. Keep your focus. If you worry about portfolio performance by the week or month instead of by the decade, mistakes will be made. Focus on the goal – financing retirement, buying a house, educating your kids – not the curves and bumps along the way.

Investing is not a game. It’s not a race. It does not define your success as a human being, or give you creds on some dodgy, pathetic financial blog.

Well, it’s Cody’s fourth birthday today, so we went for an extra-long stroll at dawn. Fresh BD pic above.

When I got back CNN was all Trump, TACO, oil and futures.

“I think the guy is just manipulating markets,” Dorothy said.

How can I not love her?

About the picture: “I have really enjoyed reading your blog for many years now especially when nurse Jiggles shows up!!,” writes Jeff. “Thank you for your timely advise and keep up the great work. This is our now 4 year old Havanese Baylee when she was 6 months old.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2026/03/23/taco-monday/