I know a lot of you are concerned about what’s been going on in the markets, but I want to say a big thank you to all of my clients for sticking to the game plan and not panicking. We’ve been here before. We’ll be here again.
Let’s add a little perspective to this situation. When COVID hit, the S&P 500 dropped 34%. Remember that? I am typing this at 11:17 a.m. Friday, April 4th, and at present, the S&P 500 is currently down 10.75% year to date. That’s roughly 1/3rd of the loss we had during COVID. I’m not saying we’ve reached the bottom. I don’t have a crystal ball. What I am saying is to continue to stay the course. Also, I think it’s important to point out that very few of the portfolios I create are invested 100% in the U.S. We have significant global exposure, and currently, the MSCI World Index is down only 4.29%. We also incorporate high-quality bonds and other interest-bearing instruments as well. As a result, even our more aggressive portfolios are down between 1% to 2% YTD, and that’s after fees. For those of you that use our Oneview system, I invite you to log in, select “run report”, “portfolio performance,” and then select “year to date”.
I find it interesting that the countries that are complaining about the U.S. putting tariffs on their goods are the same countries who have tariffs on our goods for decades. This had to happen. With the amount of debt the U.S. has, there is simply no way we could have gone on with business as usual. There had to be a hard “reset,” and that’s what’s happening now. It’s going to sting, but regardless of what the markets are doing, there have been some positive effects already. When Trump announced the tariffs a couple of days ago, he also said $6 trillion in new investments have been committed to the U.S. in just 2 1/2 months. The jobs numbers that came out this morning showed that 228,000 new jobs were added in March, far exceeding the estimated 135,000. What’s important to note is that we know these were not federal employee jobs being added. These were private sector jobs, and that’s a big difference that shouldn’t be brushed over. We’ve also seen a couple of days ago that Ford announced they were greatly expanding production in the U.S., and just this morning, I read that GM is doing the same with their truck division.
Whether you love Trump or hate him, I believe he is correct when he says that the U.S. should not be the world’s piggy bank any longer. Whenever there is a natural disaster somewhere, it’s always the U.S. to the rescue and usually giving way more than any other country. Why is that? The U.S. has many charitable people who generously give to churches and charities to help when natural disasters happen. We are a giving nation voluntarily. Think about this for a second. When the California wildfires happened, did any foreign country step up and donate money or aid? The same could be said about Hurricane Helene. Heck, the U.S. government barely helped with that one.
I’ll conclude with this. I am human also. I get worried when markets react like this. I lose sleep when markets react like this. It’s not fun. However, I think in this particular case the markets are overreacting. I believe the tariffs will lead to renegotiating trade deals with other countries to be more fair to the U.S., and the tariffs will go away. I could be completely wrong about that, but I think it’s a strong possibility. As I stated earlier, we’ve been here before, and we’ll be here again at some point down the road.
In the meantime, please don’t hesitate to call if you have concerns you would like to discuss.
PS—Sorry for any typos. This has to go through compliance before it goes to you so I am trying to get it submitted ASAP.