Global stock markets have shown a tremendous amount of volatility because of the tariff announcements in early April. A question that is commonly asked during times of heightened volatility is “should we be doing anything different?”
In most cases, the answer is no. Here is why:
- Tariffs Cause Short-Term Notice, Not Long-Term Trends
Tariffs can shake up markets in the short term, creating volatility and headlines. But, over the long run, markets tend to recover and grow based on deeper fundamentals. Reacting emotionally to short-term policy shifts can do more harm than good.
- Diversification is Built for This
If your portfolio is well-diversified, then it is already designed to handle shocks like this. Some industries and regions will get hit harder, while others may hold up better.
- Trying to Time the Market Rarely Works
Selling out of fear and waiting on the sidelines usually results in missed opportunities. Historically, missing just afew of the best days in the market can seriously hurt long-term returns.
- Stay Focused on Your Goals
If your investment strategy is tied to long-term goals (retirement, education, etc.), those goals have not changed just because tariffs did. Your plan should reflect your time horizon, not today’s news cycle.
So, while it is always wise to review your portfolio and understand how different events might affect it, a knee-jerk reaction to tariffs is usually not the best move. Staying disciplined and invested is often the smartest approach.
Investment Review Checklist During Market Volatility
- Review Your Goals
- Are your financial goals still the same (retirement, buying a home, college savings)?
- Has your time horizon changed?
- Are you still comfortable with when you’ll need the money?
- Check Your Risk Tolerance
- Can you emotionally handle seeing your investments drop temporarily?
- Has your risk tolerance changed due to a life event (job loss, health issue, etc.)?
- Assess Your Diversification
- Are you invested across different asset classes (stocks, bonds, cash)?
- Do you have global exposure in case U.S. tariffs hit some domestic sectors hard?
- Are you too concentrated in any one stock, industry, or region?
- Rebalance If Needed
- Have recent market swings caused your portfolio to drift away from your target allocation?
- Rebalancing may help you buy low and sell high (e.g. trim what’s grown too much and reinvest in what’s down).
- Avoid Panic Moves
- Are you tempted to sell based on fear?
- Remember: reacting emotionally to headlines often leads to poor timing decisions.
- Stick to a Plan
- Do you have an investment policy or strategy in writing?
- Are you contributing consistently (especially if dollar-cost averaging)?
- Talk toan Expert (if unsure)
- Is it time to review your plan with a financial advisor or planner?
If you have any concerns about how market fluctuations or have any questions, our team is here to help. Contact the Canvas Wealth team to discuss your financial plan with a Canvas Wealth advisor or to put you in touch with a Q Wealth portfolio manager to discuss your investment portfolio.
