Over the past few weeks, market headlines have been dominated by one thing: tariffs. Trade tensions are rising to heights unseen, volatility is back, and many investors are asking the same question—what does this mean for my financial future?
In a recent webinar with CandorPath clients and friends, Matt Marcoux and I took a deep dive into this very topic. In case you missed it, I wanted to share the key takeaways here, especially since many of our clients are looking for clarity in a time of uncertainty.
The Big Picture: Markets Down, Economy… Not So Bad?
Let’s start with where we came from. In the first quarter, the S&P 500 dropped around 4%, the NASDAQ fell by about 10%, and the Dow declined slightly under 1%. But here’s the twist—the economy itself isn’t doing terribly.
The unemployment rate is at 4.1%, well below the 50-year average of 6.1%. Inflation has cooled significantly from the 2022 highs, and interest rates, while higher than the past few years, aren’t astronomically high. So why the disconnect? Simple: markets don’t price in today or yesterday—they price in tomorrow. And with tariffs now front and center, investors are nervous about what’s coming next.
Tariffs: The Why Makes Sense, The How Creates Chaos
I broke our tariff discussion into two parts: the why and the how.
The why actually makes bipartisan sense. There are real concerns about:
- Unfair trade practices
- Intellectual property theft
- Trade imbalances
- National security (think semiconductors, medicine, manufacturing)
But the how—how tariffs are being calculated and implemented—is where things get murky.
Take China, for example. The U.S. imports about three times as much from China as it exports. We import about $439billion worth of goods and only export about $143billion. The government used that imbalance of about $296billion worth of goods and divided it by our imports from China ($439billion) to come to a tariff rate of 67%. Based on that, a 34% tariff was applied. The problem? The Trump Administration used this math for all trading partners, and included a minimum 10%, leading to average tariffs rates being close to 25%. Markets were only expecting around 8%, so the surprise led to a sell-off.
Four Possible Paths Forward
On our call we discussed the question, “Where do we go from here?” There are really four potential outcomes and we’re actively seeing two play out now:
- Tariffs stay in place indefinitely – This would likely lead to a mild recession. But not all recessions are 2008-style crises.
- Tariffs lead to trade deals – This is the most probable scenario. In fact, countries like Vietnam and Japan have already signaled willingness to negotiate.
- Congress intervenes – Less likely due to political gridlock.
- Legal challenges arise – Possible, but would take time.
Since our webinar was aired, the Trump Administration placed a 90-day pause on all “reciprocal” tariffs other than those on China in an effort to reach trade deals. In addition, it is being reported that Gov. Newsom in California is setting up litigation to sue the federal government over the tariffs in a California court. Regardless of what the outcomes might look like past this point, our role is to prepare, not predict. So let’s talk about what this means for your portfolio.
Portfolio Strategy: It’s Not About Timing, It’s About Discipline
At CandorPath, we don’t “stay the course” blindly. We stay disciplined. Everyone loves to make the comment “Buy Low, Sell High” when discussing investing, but the reality is that is often very difficult to do. Buying low often means investing when it feels most uncomfortable or uncertain. Selling high often means trimming when everything feels great and experiencing the “fear of missing out” on future gains. One of the most important tools we use in practice to remove these emotions is your Investment Policy Statement (IPS). An IPS includes a guide on what your mix of stocks and bonds should be. If a portfolio drifts from its intended mix—for example, a 60/40 portfolio becoming 56/44—we make tactical adjustments, selling bonds and buying equities. Just as well, if a portfolio drifts to 65/35, we trim our equities and buy bonds. This helps remove emotions and often turns portfolio maintenance into gardening- it becomes like pruning hedges—routine, necessary, and valuable over time.
Tailored Advice for Every Life Stage
Finally, we realize not every client is in the same place, so we tailored our advice into five distinct groups:
- 10+ Years to Retirement
Stay committed to your investment plan and continue buying growth assets in retirement accounts like 401(k)s and Roth IRAs. There will be more market cycles that occur this could end up being a great opportunity for long term growth. Also, consider increasing contributions or exploring Roth conversions while markets are down.
- 5 Years to Retirement
Consider shifting toward income-focused equities and other investments and building your non-retirement savings. Think of flexibility and stability.
- 1 Year from Retirement
Now is the time to finalize your income strategy. With proper planning, short-term market dips won’t derail your long-term goals.
- Newly Retired
You’ve already built your cash buffer and income-generating positions. Stick to the plan. It’s working.
- Comfortably Retired
Avoid the temptation to watch the market daily. Let your cash reserves and dividends do their job. Enjoy your retirement—you’ve earned it.
What I hope you take away is this: volatility isn’t unexpected—it’s built into the process. With smart planning, disciplined strategy, and a team that’s paying attention, you don’t have to react out of fear.
Whether you’re just starting to save or decades into retirement, we’re here to ensure your portfolio is working for you, no matter what’s happening in the headlines.
If you’d like to hear the full discussion or see the visuals we referenced, you can check out the episode on our YouTube channel: https://youtu.be/qqDRu8NrpRA
And as always, if you have questions—we’re just a phone call or email away.