US Tariffs: “How Should I Adjust My Portfolio?!”

Dave, what about tariffs???

💈💈💈

 The #1 question I’m being asked lately is, “How should I adjust my portfolio in view of the trade war, the tariffs?” My response? I don’t know. And be very suspicious of anyone who claims they do. And the more confidence they show in their market prediction, the more skeptical you should be about it.

Markets react to news in ways that even the most seasoned investors have trouble understanding, much less predicting. And right now the news flow is truly overwhelming. From geopolitical changes to economic policy shifts to the reversal of economic policy shifts, market-moving headlines just keep coming.

Trying to forecast them and their impact is a dangerous game. One, let’s be honest, most of us will lose. And, of course, remember that the markets have seen all the same chaos you have. And the markets have heard all the dire predictions you have. In other words, a lot of this madness is already priced in.

Hey, could markets fall significantly from here? Absolutely. But again, I have no idea whether that will happen. Maybe they head up based on things settling and other unexpected good news. No one knows. So, instead of reacting to every headline, focus on what actually has proven to work over the long term:

Build a well-diversified portfolio, including being geographically well-diversified. And have an asset-allocation split that matches your risk tolerance level. And finally, of course, stay disciplined. Equity markets are, by nature, very volatile. Don’t let emotions trump a long-term focus.