Portfolio Changes Amid Yet Another U.S.–China Scare: Trading Down in Quality to Trade Up in Returns?
The uncomfortable arithmetic of opportunity cost.
Sometimes the hardest part of investing isn’t spotting opportunity – it’s letting go of comfort.
Yesterday, I made a trade that forced me to confront exactly that tension: I sold part of my position in one of the high-quality companies in my portfolio – a company I’ve often described as one of the cleanest financial compounders out there – to buy another position.
I’d argue I traded quality for expected return. And that decision says a lot about where I am as an investor right now.
The timing was curious. On Friday evening, U.S. markets stumbled after Donald Trump once again threatened 100% tariffs on Chinese imports, this time over the ongoing rare earth dispute.
Chinese equities sold off sharply. Tech names followed.
And once again, the market punished anything with the faintest connection to China.
