16 years ago I was sitting in my office with Bruce and we had just endured a 56% drop in the stock market. There was very little good news that day. It was easy to be negative.
5 years ago, in March of 2020, I was feeling the same way as markets had the “Fastest 30% drop since the great depression!” Because of COVID the scary unknowns were starting to pile up. Again, it was easy to be negative.
Guess what’s happening today? As you’ve probably heard and seen, stocks are falling, now down about 20% from their highs. Down to where we were a year ago.
It’s easy to be negative yet again.

Today’s drama is not a financial crisis, or a pandemic, it’s basically political. The concern is about the severity of the tariffs Trump announced last week. What he announced shocked the world and was worse than everyone’s worst case scenario.
When markets go down like they’re doing now, like they did during COVID, and in 2008-9, investors tend to stay in the weeds and focus exclusively on short-term negative news to the detriment of anything long-term and/or positive. This is not helpful, but it is normal. Let’s poke our heads up out of the weeds and take a look around.
Tariffs will slow economic growth.
True. Tariffs raise prices for businesses and consumers as additional costs are tacked onto imports and exports. This will reduce demand and slow spending and growth. Tariffs also disrupt trade relationships which can slow down supply chains and businesses that rely on those. This can also reduce efficiency and productivity and slow down trade globally. This will have a negative impact on growth.
The positive offset is that tariffs could actually help to onshore work. Meaning, outsourcing of jobs could become less attractive because of the difficulties and the cost of trade. Companies will be encouraged to build and hire locally which would help the US economy. This is what Trump is banking on. Unfortunately, this won’t happen quickly. It takes years to build out infrastructure, train employees, and reset supply chains.
Tariffs will push us into recession.
Maybe. A technical recession is two straight quarters of no economic growth for the country. This may happen, but it will depend on how high and how long the tariffs stay on. Expectations are coming in at a 2% hit to GDP and unemployment jumping from 4.1% to possibly as high as 7%.
The positive here is that the Federal Reserve could lower interest rates to help spur economic activity and congress could offer tax breaks to offset the higher prices paid… if the tariffs are permanent.
These tariffs will be permanent.
Unlikely. The Billionaire Backlash has already started. Elon Musk and Bill Ackman, two billionaire supporters of Trump during his campaign, are already taking to social media to sway Trump on these tariffs. Next it will be the millionaires, then the people on the street will get fed up. The clock is ticking on these. I don’t believe “he has the cards” to make this level of tariffs permanent.
The levels he announced last week are so high it screams negotiation tactic, not a long-term policy. Peter Navarro, Trump’s top trade advisor has said this is NOT a negotiation and they are NOT bluffing, but isn’t that what you say when you’re bluffing?
The sooner we can reach a deal with the countries we trade with – and Trump loves to make deals – the sooner we can get back to normal.
When we see a shift in this tariff policy, either because of successful negotiations with our trading partners and a resulting deescalation of the trade war, or, because of pressure to walk them back in the form of a time out, a pause, or a reduction, the market will breath a sigh of relief.

Difficult Optimism
It actually doesn’t matter what the headline is: COVID, financial crisis, inflation, interest rates, tariffs… It’s difficult to be optimistic in the midst of a barrage of negative headlines. It’s easy to be negative and harder to look longer term to the inevitable solution that will present itself.
BUT IT PAYS TO DO SO! It literally pays in dollars to be positive when everyone else is negative.
I’ve discovered this over the last several stock market crisis’ I’ve invested through. The best investments we’ve made have been in the scariest times, and in the end the only regret I’ve had was, “Why didn’t we buy more?“
Because of that, we’re taking the cash we’ve set aside during the good times and buying some solid investments that are down with the overall stock market. Today we bought Home Depot HD in our growth stock portfolios and we’re adding to the SPDR S&P 1500 index SPTM in our funds portfolio.
I’m always disappointed when the stock market goes down. However, I’m looking forward to the day when we can watch our investments trend higher as the tariff debacle is resolved.
Thanks for reading,
***UPDATE: TRUMP AUTHORIZED A 90 DAY PAUSE ON TARIFFS JUST NOW AND THE MARKET IS SCREAMING HIGHER! I DID NOT EXPECT THAT TO HAPPEN SO QUICKLY.

Tim Porter, CFP®