Be Cool.
Today is April 9th, 2025, and we are a week out from “Liberation Day”
What has happened so far is that we announced sweeping tariffs on 60 countries.
The president used his emergency powers to make this happen. So, this global shift in trade came fast and unexpected to many of our trading partners. This is being played out in the stock market. We saw the volatility index close yesterday above 50 the last time we saw that was during COVID. The markets do not like uncertainty. This move by President Trump has never been done before so there is no precedent for how this will play out. Meetings are being conducted with countries but how much negotiating can be done? At present everything is unclear.
What now?
We hurry up and wait. For those of you who want to sell, my opinion is that doesn’t make sense unless you know when you want to get back in. If you had money invested that is for the long haul, we achieve the best results when we stay steady in the face of uncertainty. Perhaps a better idea would be to add more to your 401(k) or IRA as this will be beneficial for long term investing.
Proof? On a quick rumor the market started to shoot up. If you had sold at a loss and we have a quick rebound you buy back in higher and that creates a real loss in your portfolio and in many cases and increase in your expenses to trade and complexity for your CPA to process. Volatility and uncertainly are not ideal trading environments.
Where to look?
Earnings are starting to come in. Countries are responding with their reciprocal tariffs. The bond market is showing signs of a liquidity issue, not yet a liquidity crisis. Looking to see how CEO’s are responding and how the markets are responding looking here lets us know what is being impacted now.
Why?
The reasoning for the sweeping tariffs is that the trade imbalance needs to be addressed, and the hope is to re-shore manufacturing to the US as well as increase US revenues from tariffs to help reduce tax liabilities for Americans or to keep the lower rates we implemented in Trump 1.0. Will this work? That is yet to be seen.
I will keep you posted. Thank you for visiting my blog and watching my market update videos.
Yours in Wealth building,
Cynthia Luna