Navigating Market Swings & Tariff Uncertainty

If you’ve been watching the news lately, you might be feeling uneasy. With new tariffs and stock market swings creating uncertainty, it’s completely understandable to have questions. If you’re wondering how long this will last and what it means for your financial future, you’re not alone.

We’ve been having these same conversations with clients, and we want you to know—we understand your concerns, and we’re here to help. While market fluctuations can be unsettling, they are a normal part of investing. Let’s break things down and talk about how to navigate these uncertain times with more confidence.

A Quick Look at Recent Tariff Developments

In early 2025, the Trump administration introduced new tariffs aimed at addressing various trade and security concerns. These types of policy changes often lead to short-term market reactions, but history shows that markets adjust and move forward over time.

• November 25, 2024: President Trump announced plans for a 25% tariff on all imports from Canada and Mexico, citing the need to curb illegal immigration and drug trafficking, particularly fentanyl.
• January 31, 2025: The U.S. officially imposed a 25% tariff on most goods from Canada and Mexico, with a 10% tariff specifically on Canadian crude oil and energy products.
• February 3, 2025: Following negotiations, the U.S. agreed to a one-month delay in implementing these tariffs after Canada and Mexico pledged to enhance border security and combat drug trafficking.
• March 4, 2025: The tariffs took effect as scheduled. Canada responded with 25% tariffs on $30 billion worth of U.S. goods, with plans to expand this to $125 billion. Mexico announced that its retaliatory measures would be detailed on March 9.
• March 10, 2025: Ontario Premier Doug Ford announced a 25% surcharge on electricity exports to U.S. states New York, Michigan, and Minnesota, escalating trade tensions.
• March 11, 2025: In response to Ontario’s electricity surcharge, President Trump threatened to double tariffs on Canadian steel and aluminum imports from 25% to 50%. However, after Ontario suspended its planned electricity price hikes, Trump retracted the doubling threat, maintaining the original 25% tariff.

These tariffs follow the administration’s 2018 policy, which imposed similar levies on Chinese goods, steel, and aluminum imports. According to Goldman Sachs research, “The S&P 500 fell by a cumulative total of 5% on days when the U.S. announced tariffs in 2018 and 2019… and a total of 7% on days when other countries announced retaliatory tariffs.” This serves as a reminder that while trade tensions often cause short-term volatility, markets have historically adapted and rebounded.

Why Is the U.S. Implementing These Tariffs?

The Trump administration has stated that these policies are designed to:

• Curb Illegal Immigration and Drug Trafficking: The administration aims to pressure neighboring countries to take stronger actions against illegal immigration and the flow of illicit drugs, particularly fentanyl, into the United States.
• Protect National Security: By imposing tariffs on steel and aluminum imports, the administration seeks to safeguard industries deemed vital to national security.
• Encourage Domestic Manufacturing: The tariffs are intended to reduce the trade deficit and promote domestic manufacturing by making imported goods more expensive, thereby encouraging consumers and businesses to buy American-made products.

Navigating Market Swings

We know that when the market is uncertain, it’s easy to feel anxious. You’ve worked hard for your wealth, and it’s normal to be concerned when it feels like things are out of your control. Here’s the perspective we share with our clients: market fluctuations are expected, and long-term strategies are designed with this in mind.

Over the past 50 years, the S&P 500 has experienced an average intra year decline of about 14%, yet it has continued to deliver long-term growth. We saw this pattern play out during the 2018–2019 trade war, where market declines were followed by strong recoveries. This is why we encourage investors to stay focused on the bigger picture rather than reacting emotionally to short-term events.

For more insights on handling market volatility, check out our article: Understanding Volatility.

What This Means for You

• If you’re already retired, we understand that market swings may feel more personal since you rely on your investments for income. That’s why we structure retirement portfolios with a balance of growth and stability—so you can feel confident in your financial security, even during uncertain times.
• If you’re still working and saving for retirement, it’s never easy to see markets drop, but downturns can actually work in your favor. When prices are lower, you’re buying investments at a discount, setting yourself up for future growth when markets recover.

We also break down past market declines and what we can learn from them: Lessons from Past Market Declines.

Staying Focused on the Big Picture

If you’re a client of Alterra, this may sound familiar—your financial strategy was built with market swings in mind. We expect volatility, and that’s why your plan is designed to weather it. Here’s our best advice:

1. Stick with your plan: Your financial strategy is built to withstand market changes. Adjustments should be made based on your personal goals, not short-term swings.
2. Maintain a diversified, disciplined portfolio: Your mix of investments is designed to align with your long-term objectives and manage risk.
3. Reach out for guidance: If you’re feeling concerned, you’re not alone. We’re here to listen, talk through your questions, and help you feel confident in your financial future.

You’re Not Alone—We’re Here to Help

Market fluctuations can bring stress, but they don’t have to derail your plans. We see what’s happening, we understand how you feel, and we’re here to guide you through it. Our role is to help you stay focused, make informed decisions, and keep your financial future on track.

If you have questions, please reach out. We’re here to help!