Your Portfolio Is Bleeding While Washington Fiddles

The SIXB Materials index just dropped 1.94% today, sitting at 1,077.11, and that single number should make you nervous. Google Finance is flashing red, but the ticker is only telling half the story.

Materials are the canary in the coal mine. They represent the physical stuff of the economy—chemicals, construction, packaging. When they slide this hard, it means the market is pricing in a massive demand drop, and the timing is nauseating. Yahoo Finance just reported on the Supreme Court's latest ruling regarding the Federal Reserve. Technically, the Fed remains beyond the president's direct reach. Practically? Trump expanded his firing power over other independent agencies and is seating Kevin Warsh as the new Fed chair. Markets hate ambiguity, and right now, we are swimming in it. If the Fed's independence looks like a revolving door, infrastructure and manufacturing investments are the first to freeze up.

Strip away the political theater and the ticker symbols, and finance is exactly what the textbooks say: resources and the discipline to manage them. Wikipedia defines it as the study of assets, liabilities, and the consumption and saving opportunities within a specified timeframe. You can't control the Supreme Court. You can't control the SIXB. You only control your balance sheet.

Prune your exposure to industrial and materials funds right now. If you're sitting on variable-rate debt, refi into a fixed rate before Warsh's first FOMC meeting sends the bond market into a tailspin. And stop refreshing your portfolio app—the ticker is just noise.