Tariffs On:
The reciprocal tariffs announced on April 2nd have resulted in US & International equity markets reacting swiftly with initial downside volatility. With new tariff rates ranging from 10% up to 46%, this import tax is steeper than markets expected.
As we know, markets do not like uncertainty, and it is unclear exactly what the ultimate impact of these tariffs will be on the economy and companies. However, history suggests that initial volatility often gives way to stabilization.
Past Tariff Reactions:
We witnessed similar market reactions, most recently in 2018-2019, during the last tariff cycle. Markets experienced downside pressure that led to a sharp drawdown in the S&P500, which was then very quickly followed by new market highs as the uncertainty cleared.
Chart: Tariff Trading Range (2016 – 2019)
Source: RI Advice, February 14, 2025
Strategy Focus
This is where our portfolio approach allows us to unemotionally stay focused on the manageable variable of risk – and we did reduce equity exposure in the majority of our portfolios prior to the announced tariffs. If the current market movement continues into a trend, we have the risk management tools in place to further adjust portfolio risk. In addition, the diversification in the portfolios, including strategic and tactical components provides ballast for the portfolios in these environments.
As always, thank you to you, our clients – our “extended family” – for your continued trust and confidence. We are here to help, so please reach out with any questions, concerns or if you’d just like to chat! You can reach us directly at 518-877-6600 or via email at leo@nicoterawealth.com or austin@nicoterawealth.com.
Talk soon!
-Leo & Austin
If you’d like a 2nd opinion on your retirement plan or investment portfolio, head over to www.NicoteraWealth.com, click on the button that says “See if we’re right for you,” answer the questionnaire, and we’ll reach out to get an introduction call set up in the calendar at a time that’s convenient for you.
Disclosure: This piece is for informational purposes only and contains opinions that should not be construed as facts. Information provided herein from third parties is obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness. Charts and graphs are for illustrative purposes only. Discussion of any specific strategy is not intended as a guarantee of profit or loss. Past performance is not a guarantee of future results. Objectives mentioned are not guaranteed to be achieved. All performance referenced is historical. All indices are unmanaged and may not be invested in directly. Tactical allocation may involve more frequent buying and selling of assets and will tend to generate higher transaction costs. Investors should consider the tax consequences of moving positions more frequently. All investing involves risk, including loss of principal.
Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC.