Tariffs Spark Market Turbulence
On April 2, President Trump announced new tariffs on nearly all major trading partners. While the White House had widely telegraphed the move, the level and scope of the tariffs exceeded expectations among many investors and economists, contributing to the largest two-day decline in U.S. stocks since the onset of COVID in 2020.

Trade negotiations remain fluid, and the scope of potential tariffs—along with the possibility of retaliatory measures—adds complexity to an already dynamic situation. The evolving nature of the circumstances makes it difficult to foresee what the longer-term impact could be on economic growth and corporate earnings. It’s also worth noting that tariffs appear to be just one component of a broader economic strategy by the Trump administration. Other elements of the administration’s strategy—such as deregulation and tax reform—may influence markets more favorably, contingent on their implementation and market reception.

A Long-Term Perspective on Market Resilience
It’s important to remember that while markets can be fragile in the short term, they tend to be resilient over time. During periods of volatility, it’s often difficult to see how stability will return. Yet history shows that markets have consistently overcome significant shocks—often rebounding when least expected, as seen in early 2009 after the global financial crisis, mid-2020 during the pandemic, late 2022 following a technology-led bear market, and in countless other instances.

Discipline, Perspective, and the Power of a Plan
While headlines and market movements can be unsettling, periods of uncertainty are precisely when a well-constructed financial plan proves its value. During volatile times, remembering what your plan is built for—your goals and your timeline—can help you stay on track. 

Questions to Revisit 
A strong financial plan doesn’t just focus on individual goals in isolation; it zooms out to consider how each objective fits into the broader picture. With that in mind, it’s a good time to reflect on a few key questions as you think about your portfolio in the context of your overall plan:

1. What’s my time horizon? Whether you're already drawing from your portfolio or planning to in the future, understanding your time horizon helps put short-term market movements in context and keeps long-term goals in focus.
2. Have my goals or priorities changed recently? As life evolves, so should your financial plan. Periodically reassessing your goals ensures your strategy stays aligned with what matters most to you.
3. Am I prepared—emotionally and financially—for periods of market volatility? Markets will fluctuate. Taking time now to revisit expectations and stress-test your plan can help you respond with confidence in volatile times.

Recommendation

We recommend that, if your time horizon, objectives, and comfort level have not changed, you continue to follow the current investment and rebalancing strategy through various market cycles and events. 

Rebalancing with Caution
As a general practice, we allow portfolios to drift approximately 10% from their bond target before acting. For example, if a bond allocation moves from 40% to 44%, we may consider selling bonds and purchasing equities to bring the portfolio back in line. Rather than respond hastily to short-term volatility, we’re approaching rebalancing with care, keeping your long-term objectives front and center. Looking back to the early days of the pandemic, some clients chose to rebalance amid volatility, while others preferred to maintain a higher allocation to fixed income as a buffer during uncertain times.  

If you'd like to schedule a check-in outside of your regular strategy session to discuss your portfolio or current positioning, please be in touch.