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One Simple Strategy to Prepare for a U.S. and China Trade Deal

Top investing J.J. Kinahan breaks down how to act on the China trade news.

The news that the U.S. and China are close to a comprehensive trade deal is a great sign of progress, yet not at all a certainty. 

The market initially rose this week on reports that the U.S. and China are getting closer to reaching a long-awaited trade deal, which could be announced by the end of March. 

With several details to be worked out, both from a diplomatic and contractual standpoint, and a tariff standpoint, "Don't count the trade until it's cleared, and that's exactly how I feel about trade [tariffs]," said JJ Kinahan of his days on the trading floor. Kinahan is the chief market strategist for TD Ameritrade. 

Related. Jim Cramer: 5 Reasons to Buy Any 'Sell the News' Reaction on China

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With that uncertainty in mind, here's how investors should think about decision making at this juncture:

"Still buy good companies," Kinahan said. "At the end of the day you buy good companies that have good earnings." 

Related. It Isn't Surprising That There's Some 'Sell the News' Action Taking Place

Another way to remove risk from one's portfolio is to buy low beta stocks or funds.

"Our clients have been certainly going to low beta...our clients have actually gone through a lot of bond funds and ETF type funds, which tend to be lower beta, rather than some of the more individual stocks," Kinahan said.