In this update, we want to address the sweeping new set of proposed tariffs by the U.S. government. These proposals are more broad and aggressive than expected, and they could have serious implications for trade, prices, jobs, and market performance in the months ahead.

Let’s walk through what’s happening — and what we should do & should not do about it.  Please like and share the video if you find it of value.  Thank you!

If you want to work on your personal financial plan or want a 2nd opinion about your strategy & red flags, please schedule a meeting

What’s Going On?

The U.S. is taking steps to impose new tariffs on goods from a wide range of countries. The reasoning is tied to the large trade deficit the U.S. runs each year — currently over $1.3 trillion — and a belief that other countries are charging American exporters more than the U.S. charges their imports.

In simple terms, tariffs are taxes on imported goods. They make foreign products more expensive for American consumers and are intended to give U.S. manufacturers a competitive edge.

Three Possible Outcomes are All Time Sensitive

Best-Scenario:

Quick resolution (next 2 months) and better, more fair deals = market rally.  We focus on strategic industries like Pharma, Semis, high margin.  We don’t have worry about sneakers, selling rice to Asia, and other items.

This is simply a high-pressure negotiating strategy. The U.S. reaches favorable trade agreements with major partners. Other countries lower their tariffs, and the U.S. removes its threats.

Middle outcome:

A drawn-out process of 3 to 6 months = temporary pullback but eventual recovery.

Negotiations drag on, creating uncertainty for businesses and investors. While a full trade war is avoided, delayed resolution causes slower growth and possibly a mild recession.

Bad Scenario:

No resolution = mild recession, 25–35%+ pullback.  This would create opportunities for long term investors.

All proposed tariffs go into effect and stay in place long-term. The result: higher costs, reduced global trade, and a likely recession in the U.S.  This may change with the next election or Administration or court battles.

What Should We Do? What Should We Not Do?

1. Stick to the Plan—Because We Planned for This

Market pullbacks and recessions are not unexpected events—we’ve already accounted for them in your financial plan. Every client’s portfolio is modeled to handle scenarios involving 30–50% downturns, so if markets dip 10–20%, it’s well within the range of “normal.”

2. Focus on What You Can Control

Review your cash reserves. Ensure your short-term spending needs are safely tucked away in bonds or cash—your “war chest” for 4–6 years of withdrawals.

• • If you are still working, increase saving deferrals, put excess cash to work, and take advantage of uncertainty
  • We may rebalance portfolios coming up, moving assets from safer parts of your portfolio like bonds to equities that look enticing
  • Roth conversions. During deeper market dips you can convert at a discount

3. Don’t Let the Media Drive Your Emotions

The media is in the business of selling fear. Don’t let headlines derail your long-term strategy.

• • Current tariff rates are unusually high and often poorly calculated.
  • Many essential goods from countries like Mexico and Canada are exempt.
  • If negotiations improve, markets could rally. If they drag on, expect volatility.

4. A Recession Would Likely Be Self-Inflicted and Mild

Even in the worst-case scenario, we’re looking at what would likely be a mild, self-correcting recession. This isn’t 2000, 2008 or 1973. Could it change for the worse? Yes, corporate fundamentals remain strong, and many of the forces causing volatility are political and policy-based rather than systemic financial breakdowns.

5. Our Investment Philosophy Is Built for Times Like This

Your portfolio is divided into strategic buckets:

• • 0–4 Years: Cash and short-term bonds for immediate spending needs.
  • 4–7 Years: Alternative investments for moderate returns and hedging.
  • 7+ Years: Equities and growth-focused investments for long-term compounding.

This structure allows us to weather downturns while staying positioned for future growth.

6. Remember: Drawdowns Are Normal

The S&P 500 is down approximately 13.5% so far this year & 17.4% from recent highs. Most years experience a 10% drawdown. And it is not uncommon to experience a drawdown of 20%. Many years still end in positive territory by year end.

• • Over the past 20 years, 17 ended in gains—even after sizable intra-year drops.
  • After a market decline of more than 10%, average returns over the next year have been 11.7%

7. History Still Favors Long-Term Investors

Let’s put things into perspective:

• • Since just before COVID (January 2020), the S&P 500 is still up over 70%
  • Over the last two years, even with recent dips, equities are up 36%
  • Bonds have lagged, returning around 10–13%, while inflation has surged—reinforcing the importance of equities for long-term goals

Despite volatility, staying invested has consistently proven to be the right move.

8. Let’s Talk About Your Plan

If you’re feeling unsure or want to revisit your portfolio and financial strategy, don’t hesitate to book a meeting with me or Sam. If you are not a client, book a free 2nd opinion. Whether you’re years from retirement or already enjoying it, we’re here to walk you through your options with clarity and confidence.

Market volatility creates anxiety—but it also creates opportunity. Let’s make sure you’re positioned to take advantage of it.

Additional blogs:

• There is always something to worry about 3/12/2025
• How much risk do you need to take to hit your goals? 11/5/2024
• Is it normal for stocks to go down -5% to -10% in a short period of time?  8/7/24
• Are Things Getting Better or Worse? 3/27/24
• Market Recap & Path Forward 2024 -1/16/24
• Markets Normally Go Up & Bear Markets Are Transitory – 7/16/23
• Stocks are up 11% per year for the last 7 years!  6/30/22
• The Answer to Volatility is Financial Planning 5/6/2022
• Tough Choices — What do we own & why? 2/17/2022
• Are Things Getting Better or Worse? 10/15/2021
• Back to Normal but Now What? 5/7/21

If you want to work on your personal financial plan or want a 2nd opinion about your strategy & red flags, please schedule a meeting

Thanks for reading/watching.  This website is for educational purposes only and is not investment advice. Please Remember: Past performance may not be indicative of future results.  Moreover, no current or prospective investor should assume that future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in any general informational materials or educational sessions, will be profitable or equal any corresponding indicated historical performance level(s).  Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for an investor’s retirement portfolio.  Moreover, you should not assume that any discussion or information contained in this website serves as the receipt of, or as a substitute for, personalized investment advice from Integrity Investment Advisors, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. All investments have a risk of loss. Integrity IA is not a CPA or estate attorney.