April 2^nd was designated by President Trump as “Liberation Day” and the beginning of a new golden age in which America would be freed from unbalanced and unfair tariffs imposed by other countries. After the markets closed last Wednesday, the President revealed his latest plans which were broader and deeper than many expected. All countries will now be subject to varying tariffs until they agree to remove or reduce tariffs on U.S. goods. Since then, it has been chaos, as investors, companies, our global trading partners and the Federal Reserve have no idea what a successful outcome will look like, how long it will take, nor how much economic damage will ensue in the process. On Friday, April 4^th China retaliated with 34% tariffs on all U.S. goods, causing greater consternation and further pressure on equity markets worldwide. As of the markets’ close on Friday 04/04/25, domestic and international equity indexes were down 10%-20% or more from highs reached in 1Q-2025.

Uncertainty is on steroids with many questions being asked. Will we experience a global recession? Will inflation accelerate worldwide due to higher prices? Will companies’ revenue, earnings, and dividends decline and by extension, will their share prices continue falling? Is the market’s knee-jerk response an overreaction? When will we reach the inflection point at which share prices stop declining and eventually head back up on their permanent long-term trajectory? Will short-term pain result in long-term gain and truly the beginning of a new American golden age? The answer to these questions and others is unknown and unknowable.

Anyone who has followed President Trump for a long time knows that he has been calling for a more balanced trade policy between the U.S. and our trading partners for decades. He may be wrong or right, but he appears determined. We shall see. What’s an investor to do? There are many things investors can do to navigate successfully through the current fog of uncertainty.  Here are a few suggestions.

1. Remain calm and don’t panic by acting impulsively. Investors should know that equities can be extremely volatile in the short term. The average annual intra-year decline going back decades has been about 15%, so the current sell-off is within the historical norms. Every few years or so, we get sell-offs greater than 20%, so further declines are not out of the picture. Just five short years ago, at the onset of COVID-19, the broad market fell 34% in 31 days, only to recover completely within five months. Anyone who sold at that time, still has a bad case of seller’s remorse. Trying to time the market by selling to avoid further potential losses is like playing a financial version of Russian roulette and rarely works.
2. Understand that to own equities one must possess a five-year, or longer time horizon for those dollars. That’s because most market sell-offs completely recover within five years. You should not have money invested in equities that you know you will need in less than five years.
3. Ensure that your portfolio is broadly diversified. An account containing ten or twenty technology companies is not broadly diversified. Also, focus on quality and avoid speculative securities. Warren Buffett has been quoted as saying he will only own shares in companies he could hold for ten years or longer in the hypothetical case that markets closed, and he was unable to sell during that time.
4. Consider a balanced portfolio that includes cash and fixed-income securities. Adding cash and short-term, fixed income to an otherwise all-equity portfolio can temper the downside during market declines, allowing you to sleep at night and stay the course.
5. Understand investor psychology and the counter-intuitive tendencies we all possess. Everyone wants the highest return with the least amount of risk. That’s an unreasonable goal, because if you want the highest return, you must accept the highest risk and if you want the lowest risk, you must accept the lowest return. Common stocks are about the only thing that few people want to buy when they go on sale, yet when they are fully valued, or over-priced, people cannot invest fast enough. Because markets go up about 70% of the time, and because waiting for clear skies rarely works, the best time to invest is when you have available cash.
6. Do not underestimate the value of partnering with a team of dedicated, experienced financial professionals who have been through many market ups and downs. They can help you develop an intelligent financial plan, a prudent investment strategy and offer a calming voice of reason when others are panicking. It is hard to overestimate the value such a partnership can bring to you and your family’s long-term financial journey

“This too shall pass.”

Sam Taylor, CIMA®, AIF®, CRPC®