SINGAPORE (July 9): Trade wars are not a spectator sport. Investors cannot just sit on the sidelines and watch them happen from the comfort of their living rooms. Trade wars are an investment blood sport, which — without getting too dramatic — turned into a real bloodbath at the end of the 1930s.

The first point of impact for many investors is not Chinese stocks but US markets, because this is where they have their main foreign market exposure. Already, we see that the steam has come out of the performance of the Dow Jones Industrial Average. The strong uptrend that persisted for years has been brought to a shuddering halt. After initial falls in January, the Dow has never recovered. It has been locked in a sideways trading band and no longer offers good capital growth.

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