I’m tired of having to write about tariffs. You’re tired of having to hear about tariffs. Instead, let me put the current market conditions into some historical perspective.
A diversified portfolio matters. We are strong believers in the value of diversification not just between stocks and bonds but across industries and countries as well. The US market has been strong for many years and owning international stocks has seemed pointless over this time. So far, not this year.
Let me break it down in a bit more detail by specific country. (FYI- these returns are in USD)
Down days are a common occurrence in investing and while they aren’t fun to live through in real time, they happen more often than we remember. Another great chart from Charlie Bilello of Creative Planning.
Going back to 1928, the S&P 500 in the US averages about 30 days in a year where it drops between 1 and 2% in a single day. The last 2 years have been abnormal for their below average number of down days.
Which brings me to talking about tariffs. The “reciprocal” tariffs announced yesterday are poorly thought out and haphazardly applied. I won’t mince words. The market does not like it, and we are having one of those -3% or more days in the stock market as I type. You are rightfully concerned about the impact on your portfolio.
There have been other concerns before that have impacted your portfolio’s values and caused volatility in US markets and worry for you. In each of these cases, remaining patient has been the right decision. Remaining diversified has been the right decision.
Investing is hard not because it requires exceptional skill, but because it requires exceptional patience. Patience in a time when everyone around you is emotionally agitated. Being patient gets rewarded in the long run with better returns.
If you had a financial plan done in the past, review it. We’ve tested the boundaries to show you the impact of market drawdowns worse than this one. We do that precisely for moments like this when the world is telling you to worry. Our planning work is designed to allow you remain patient in times like this so you can stay focused on what matters to you and your family and worry less about the day-to-day gyrations of the stock market.
A special thanks to Charlie Bilello and Peter Mallouk of Creative Planning in the US who have put out some great data visuals in the past few days that I have shared in this blog.
