Tariff Earthquakes
Here we go again. The LA fires are extinguished. We now have tariff earthquakes shaking our economy.
We have been through several economic crashes together. After the 1987 banking crisis (Mr. Keating went to jail and died), we navigated the tech wreck (2000), the mortgage crisis (2008) and the pandemic (2020). We survived these corrections, and the equity markets went back up over the moon again.
This recent downturn feels especially jittery because there is complete instability around all of us. Prices are going to go up. Unemployment will likely rise. Foreign affairs will destabilize. World economies will struggle.
At least with the pandemic, we could see light at the end of the tunnel. When the vaccine was developed and applied, people would be protected from the virus. Business would go back to normal. This is exactly what happened. Many businesses rebounded rapidly and profitably. We have had 4 years of prosperity and market peaks following this decline.
No one can really predict the bottom or the worst level of this current crash. For now, we feel that a 20% discount in stock market prices is a good place to buy for the long term. So, we are buying. If prices go lower, we will buy more. As Warren Buffett says, “When investors are greedy be afraid, and when investors are afraid, be greedy.” We see investors today as being very afraid.
If you need cash for a new roof, or a new car, travel, a gift, or a project…then we suggest that you take these funds out of the market for now. Place them in US Treasuries at 4% -5% for safekeeping. The cost of being out of the market on the biggest days can derail your returns. Over the last 20 years, if you stayed fully invested in an S&P 500 Index fund, your money grew by 9.8% per year. However, if you sold during a market downturn and missed the 10 best days, your portfolio would be 5.6%.[1] So, keep your current equities…they usually grow better than any other asset class over time.
The 2025 Oscar winners included Adrian Brody, Mikey Madison, and Anora as the best picture. Florida beat Houston to win the NCAA Men’s Basketball and UConn won the Women’s NCAA Basketball over South Carolina. Major League Baseball has started, and the champion Dodgers look like the team to beat again this year.
Thank you to our clients who sent in the survey. It will help us focus even more on your priorities. And please remember, “worry is like a rocking chair…you go back and forth a lot, but you don’t go anywhere”.
Thank you for your confidence and trust.
Mitch Fisher & Ryan Fisher
[1] The Motley Fool: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://foolwealth.com/hubfs/one-pager/timing-the-market.pdf?hsLang=en