With the axiom of “buying low and selling high”, now is the time to buy low! Our economy has excellent fundamentals, as oil production is at record levels, while $18 trillion of investment commitments along with 9 better trade deals should lead to a very strong economy for the second half of 2026. From the tax cuts and changes from the BBB, tax refunds are expected to be $1000 more this year, which will increase greater consumer spending. Of even greater impact, businesses will able to deduct 100% of capital expenditures, which will spur investment and job creation. My belief is that the second half of 2026 will be amazing, and my recommendations to realize what hopefully will be great profits are to….buy the dip now!
Yes, oil hit over $100 per barrel, but this should be temporary. The US should in the coming week or so provide insurance for oil tankers passing through the Strait of Hormuz, and also provide naval escorts, which with order restored in the Strait of Hormuz, oil prices will immediately drop. About 20% of the world’s oil passes through the Strait of Hormuz, while soon Iran’s military capabilities will be close to zero, as almost all of their ships are at the bottom of the sea.
Former Director of the National Economic Council, Larry Kudlow, believes that oil will return to the $60 price level. After all, US production is at record high levels, and projected to remain there per the National Energy Information Administration. I put my money where my mouth is, as today I purchased an ETF that profits when oil prices decline. I do state this incurs risk that some or all investment could be lost, but I selected Pro Shares Ultra Short Bloomberg Crude Oil (NYSEARCA:SCO). Oil will likely be quite volatile until safe passage is restored in the Strait of Hormuz, but hopefully that will occur soon.
Regarding respective high points, the Dow is down about 5.7%, S&P 500 3.8%, and NASDAQ about 7% as of today. When considering trillions of dollars of investment commitments, better trade deals, and with the consumer having more money to spend from higher tax refunds, and of tax incentives for business development, I purchased ETF’s for all three indexes. For the Dow, I went with State Street SPDR Dow Jones Industrial Average ETF Trust (NYSEARCA:DIA). The Invesco QQQ trust indexes the Nasdaq (NASDAQ:QQQ), and the index I have purchased for the S&P is the State Street SPDR S&P 500 ETF Trust (NYSEARCA:SPY).
After the Iran conflict is successfully resolved, consider shorting gold. Basically, when the dollar declines in value, the price of gold goes up, as more dollars are required to purchase an ounce of gold. Foreign banks were selling T-Bills and buying gold, driving down the dollar, which caused the price of gold to soar. Also, in times of uncertainty, gold typically goes up.
