A Global Trade War and Market Volatility

The sweeping tariff announcements by the Trump administration have pushed markets into a rapid selloff and added fuel to what was simmering volatility.

At Financial Plan, we don’t pretend to know what the final resolution will be or where it will take us. However, we strongly believe that humans will continue to work through our issues and find solutions, imperfect as they may be. Furthermore, history shows us that the markets are nothing if not resilient.

For investors, it is understandable to feel unsettled, fearful, or stressed when market volatility and uncertainty strikes. It’s also critical to have an investment plan that is built to withstand market uncertainty. During periods of stress, we must lean into the fundamental investment principles of diversification, allocation, and discipline. It may be small comfort during a global stock decline, but we construct portfolios with the knowledge that severe volatility can occur at any moment.

While it may be frustrating at times, we do not believe in taking a predictive approach to investing, whereby we attempt to guess what happens next and adjust portfolios based on that guess. Instead, we respond by maintaining our allocations and trading to keep the portfolio positioned in a manner that supports each client’s unique plan and future goals. Volatility is nothing new for markets and while the causes of that volatility will always be different, history shows us that markets can recover in unexpected ways. Investors who remain patient and disciplined have historically been rewarded.

To our valued clients who are still working, saving, and investing; stick with it! This is an opportunity for dollar-cost-averaging to work in your favor. For our retired clients who need their portfolio to provide cash flow so they can continue enjoying retirement; your investment allocation is designed to withstand volatility and provide a stable pool of assets to utilize when some asset classes decline. The team at Financial Plan is monitoring the situation and managing your accounts to stay on track. Now is the time when staying the course really matters.