
Steering Your Investments Through Market Uncertainty Amid New 2025 U.S. Tariff Policies
Transcript
[00:00:03] Antwone Harris: Hi, this is Antwone Harris with Platinum Bridge Strategies, and there's a lot of uncertainty going on right now with the tariffs, with us implementing tariffs and then pausing and then re implementing the tariffs and our position on the global stage. There's a lot of market volatility, a lot of uncertainty. The markets do not like uncertainty. So I've been spending most of my time collecting data from various sources to try to get a holistic view of what's happening, how we may be able to protect our assets now, but continue to be able to grow these assets longer term. Some of you know that I do is I do a global assessment every Tuesday, looking at various resources, and then I track what's happening around the world and how asset classes are being impacted.
[00:00:50] So I can go back several years and see how different inputs impact certain sectors of the economy, certain sectors of the market, different types of investments and how to position and potentially defend against certain phenomenon. So I was able to go back to my note from 2018 and see how the markets responded to tariffs that were initially implemented under the first Trump administration. There are some parallels there. It's not exactly the same because we're in a different inflationary environment. Um, the tax cuts were new and a bit more stimulative. Now, those tax cuts are embedded and baked into a lot of the forecast that we're seeing, but I'm able to draw some parallels and glean some information that will impact this now and be relevant to portfolios today.
[00:01:37] So here are my thoughts.
[00:01:39] A lot of the themes that have worked so well for the last couple of years have started to change this year. So we're seeing a different market dynamic. Now this chart shows- the blue line is the S&P 500.
[00:01:50] So far a year to date, we're down about one and a half percent. This is the U. S. large company index. This red line represents large international companies. It's up about 11. 9 percent so far. So there's a pretty wide divergence between U. S. and international stocks.
[00:02:07] Now, this is much different from what we've seen for the last several years. So this chart shows going back historically, purple shows international stocks doing better than U. S. stocks and the gray shows U. S. Stocks doing better than international. So you see periods where international is doing better. U. S. is doing better. U. S. Is doing better. International is doing better. But we had a span better after the financial crisis of about 14 years, where the U. S. Stocks did much better than those international companies had done. There was a blip here where the international did well, 2022 or so then it went back last couple of years. So this year, so far, we're seeing these international companies are doing much better.
[00:02:50] Why? What's happening? So a lot of what we're seeing coming from the U. S. Government has really started to indicate that we may pull back away from some of our allies, especially in the area of support for them from a military perspective. So that means the impetus may be on a lot of these international entities, a lot of these countries that start to beef up their own security to make sure they're able to protect their citizens and their borders. That's actually voted well for a lot of those international defense companies, and they have really taken off and that's been a big part of those international indices and a big reason why some of these international companies are doing so well this year. We've been underweight international companies for several years. A big reason is because they haven't done as well for previous 14 years or so, but I'm starting to bring that allocation back up to our normal target.
[00:03:41] Another area that we've seen because of the AI boom, a lot of the high growth, high tech companies in the U. S. have really led the market. A good chunk of the index, the S&P 500, is made up of these large tech companies. So far this year, that's reversed. A lot of the dividend paying companies, the companies that aren't growing as quickly, but are more stable, they're more established and they're paying dividends, they're leading so far this year. They're deemed to be safer companies. So these are companies that are like AT& T or a company that are just, they have longterm dividend growth. These companies here in red are up about 3. 4%, while the overall growth companies are in blue, they're down about 5 percent so far this year.
[00:04:22] So while the catalyst had been a lot of these growth companies over the last couple of years that starting to shift and I think it makes sense that we want to maintain our stock exposure, but we may want to start to shift away from some of these growth companies while we're dealing with all this uncertainty and then rely a bit more on some of these less high growth Gogo companies that are paying dividends and offer some stability and balance to the portfolio.
[00:04:47] During periods of high volatility, I'll often get a call that says, Hey, should we sell everything and raise a bunch of cash until all this passes over? That would be great if I had a crystal ball, but I don't know when the market stopped going down and I do not know when to get back into the market.
[00:05:05] And historically speaking, when we've attempted to do things like that, it's cost investors longer term. So here's the chart saying about missing the best days in the market. So if you had $10,000 invested in 1979, it grew to $1.7 million if it was invested in the S&P 500, and you left it alone for that period.
[00:05:26] Now, this is over a 45 year period. If you miss just five of the best days, your gains went from 1.7 million to merely a little more than 1 million. If you missed the best 10 days, your gains went from 1.7 million down to 762,000. So you cost yourself a million dollars in long-term growth, simply because you were out of the market at the wrong time.
[00:05:51] So figuring out when to get out of the market and when to get back into the market is an impossibility. What we want to do is maintain our exposure. We want to maintain the stock exposure because anything can happen. The president can come out at any time and say, Hey, we have an agreement with China regarding our trade negotiations. So the tariffs have been rescinded. They could have an agreement with Canada or Mexico at any given time and that may be a boost for the market. So we want to make sure we maintain the exposure, but we want to offer a bit more stability while we're going through this storm so that we can continue to have the right exposure, continue to offer some safety to the portfolios and continue to be able to maintain the growth opportunity longer term.
[00:06:29] So I'll be reevaluating this as things change. As I mentioned before, this is a dynamic situation. I'll be adjusting the portfolios accordingly as things evolve over time. If you have any questions, I'm happy to chat with you. Please reach out to me. This is Antwone Harris with Platinum Bridge Strategies, and I'll talk to you soon.