Perspective on Tariffs
As you know, on April 2 President Trump announced his two-part reciprocal tariff plans, which turned out to be much broader and more aggressive than many had anticipated. This resulted in a 10.5% decline in the S&P 500 over the remainder of the week¹.
The announced plan called for a 10% baseline tariff set to take effect on April 5 applying to all countries except Canada and Mexico, and a meaningfully higher tariff for 60 countries to take effect on April 9. Of these 60 countries, the heaviest tariffs were levied on China at 34% (on top of the current 20%), the European Union at 20%, Taiwan at 32%, South Korea at 25%, and Vietnam at 46%.
There were also some exclusions to the reciprocal tariffs, notably on copper, steel, auto, aluminum, copper, semiconductors, lumber, pharmaceuticals, and certain critical minerals. More recently there was an exemption on smartphones and other tech products.
What Are Tariffs?
Tariffs are a tax on imported goods intended to encourage domestic manufacturing, protect local industries, and generate revenues for the federal government. However, tariffs can also result in higher costs for consumers and companies that rely on imported materials from abroad, and strain relationships with other countries.
What Does This Mean for You?
While market volatility can certainly be unnerving, we want to assure you the feeling of fear or concern is totally normal. In fact, it is very human to feel that way now. In times of heightened uncertainty such as these, it is important to remember to stick to our core investment principles, a few of which we highlight below:
Goal-Matching — The cornerstone of your investment strategy is a proactive financial plan that accounts for both your short and long-term goals ideally matched with tailored investments. When we update your plan, we allocate a sufficient portion of your portfolio to bonds to immunize your withdrawals for a number of years.
Forecasting and Timing Lead to Regret — The economy can’t be forecast or the markets timed, and nobody knows exactly how or when these tariff policies will play out. What we do know is that drops are temporary and rebounds happen quickly and unexpectedly, meaning reactively selling now can be an irreversible mistake from which a financial plan may never recover.
Temperament Outweighs All Else — The essential challenge to successful investing is neither intellectual nor financial but temperamental: it is how you react, or choose not to react, to events and the consistency with which you continue to act on a plan. Remember that markets are forward-looking, and efficiently price in new information such as the tariff announcement and any retaliatory actions or negotiations quickly. The only way to be reasonably assured of capturing the rebound is by riding out the inevitable but temporary decline.
In fact, since 2000 we have seen our fair share of geopolitical events, including a once-in-a-generation global pandemic in 2020. During that period the markets have rewarded long term investors, growing $1,000,000 invested at the end of 1999 to $4,500,000 in March of 2025.
During these periods of volatility, our trading team is proactively looking for opportunities to rebalance our portfolios by purchasing asset classes at relatively low prices. We are also using the market decline as an opportunity to reduce our clients’ tax burdens by using tax-loss harvesting, a technique our Director of Investments and Trading recently posted about (article link) on our website.
Quantum has successfully managed through numerous market cycles and corrections since our original founding in 2005. We know that when the masses are reacting in alarm it creates opportunities for the patient, goal-focused, long-term investor. The four most dangerous words in investing continue to be “this time is different”. Each crisis is surely unlike the others -- otherwise it would not be a crisis – but it’s never different enough to impair the innovation and long-term financial success of the great companies we invest in.
We know these are challenging times but we are actively assessing and vigilantly safeguarding our client’s wealth. As always, your Quantum advisor is here for you for further discussion.
[1] Yahoo Finance S&P 500 Index SPX
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