Trump, Tariffs, and Turmoil: Why Staying Invested Pays Off

 

Markets are volatile right now. Trump's recent policies and announcements have sent shockwaves, prompting investors to panic. It's easy to feel tempted to hit the sell button and run—but here's why that's usually the worst decision you can make.



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Look at the real-world portfolio chart above. After a sharp fall, the market rapidly rebounded within weeks. Had you sold during the downturn, you would have locked in losses and missed the entire recovery. This isn't speculation; it's historical fact.

According to historical data from the S&P 500 between 2006–2021, staying fully invested produced a 10.66% annual return. However, missing just the 10 best days over that period reduced annual returns to just 5.05%. Miss the top 20 days, and that drops further to only 1.59%. If you panic sell, you could miss these critical bounce-back days, permanently damaging your investment growth.

Why do we panic during market downturns? When house prices fall, investors see opportunities. When markets fall, investors often see catastrophe. But markets recover, historically every single time.

Let's put current events in context. Trump’s tariffs and policies have created uncertainty, particularly in the US markets. Yet globally, economies are resilient. European and UK indices remain strong; the FTSE 100 and Eurostoxx 50 are up for the year, demonstrating strength outside the US.

Smart money isn’t panicking—it's positioning itself. When everyone else rushes out, professional investors step in, buying assets at discounted prices. This strategy isn't luck, it's disciplined investing.

If you sold out, the challenging question becomes: when do you get back in? As shown in the portfolio performance chart, market recoveries can happen swiftly, often faster than anticipated. Identifying the bottom or predicting the exact moment of recovery is nearly impossible, much like guessing Trump's next policy move. Market timing consistently proves to be a losing game.

Diversification and risk management, guided by professional advice, shield your portfolio from market shocks. DIY investors who loaded up only on tech or S&P 500 funds now feel the pinch. Those diversified across regions and asset classes experience smoother sailing.

Your financial future isn’t a gamble—it's your life. Just as you wouldn't self-diagnose serious health issues, you shouldn't self-diagnose your portfolio during market volatility. Seek expert advice and manage your risk intelligently.

Markets will fluctuate, influenced by policy changes, geopolitical events, and economic cycles. The key is staying invested, managing risk, and avoiding panic. Because, historically, markets always go back up.

Don't react emotionally—respond strategically. Stay invested, stay calm, and focus on your long-term goals.

Interested in reviewing your investment strategy or curious about navigating current market conditions? Let's chat, book a meeting below!

https://outlook.office365.com/book/SkyboundWealthManagement4@skyboundwealth.com/s/GxL75GQxr0KaVOmhTMCyZg2

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