I know many of you enjoy my video updates (award-winning delivery and all), but given the whirlwind of market news lately, I wanted to get my thoughts to you without waiting on lighting, editing, or coffee runs. When news breaks this fast, our priority is helping you make sense of what matters—not just what makes headlines.
Let’s start with the obvious: April began with fireworks—and not the fun kind. If you’ve been off the grid or just busy trying to file your taxes before the deadline, here’s the quick and slightly painful update.
On April 2nd, the administration announced a sweeping set of tariffs: a universal 10% on all imports, and steeper tariffs (11%–49%) on goods from over 60 countries starting April 9th. Goldman Sachs now estimates the effective U.S. tariff rate will rise to 21%—the highest level in over a century and a significant jump from the 2.3% we started the year with.
Markets reacted sharply. The S&P 500 dropped nearly 600 points in two days, pushing year-to-date returns to -13.73% as of April 4. Volatility surged. And financial headlines swung into full panic mode, forecasting everything from inflation spikes to global trade wars.
Before we dive into what might happen next, I want to be clear about something important: I don’t take a political stance when it comes to portfolio management. My job isn’t to weigh in on whether a given policy is good or bad—that’s the domain of pundits (and there are too many of them already). My role is to understand how these policies may impact markets and your investments, and then navigate through them in a way that aligns with your financial plan.
So… where do we go from here?
The Binary Outlook
In the short term, there are really two likely paths forward: either we go into a recession—or we don’t.
- Recession Scenario: If the administration sticks with the tariffs, we’ll likely see a broad increase in prices across many goods—think smartphones, cars, appliances, and everything in between. These increases ripple through global supply chains and land on the consumer’s doorstep. Spending slows, layoffs rise, and the market could fall further. Add the high likelihood of retaliatory tariffs from other countries, and we’re looking at increased global uncertainty.
- The ripple effects run deep. A recent Wall Street Journal article pointed out that the iPhone 16 Pro, for example, contains components from at least five or six countries—including the U.S., Japan, and others. Tariffs at multiple points in this chain make price increases nearly inevitable. These aren’t just abstract numbers; they impact nearly every product we buy.
- No Recession Scenario: If this is a strategic move to pressure global leaders into renegotiating trade terms, and compromises are reached quickly, we may avoid long-term damage. This could even lead to increased domestic investment, stronger trade protections for American companies, and a boost in investor confidence. It’s a high-stakes game of economic brinkmanship—and this would be the best-case outcome.
How I See It
As I’ve said before (see Tariff Series Part 3), the President is working against a ticking clock. Right now, he still has the support of Republicans in Congress—but the midterm campaign cycle is approaching fast. If these policies don’t translate into voter-friendly results soon, that support could vanish quicker than a leftover donut at a staff meeting.
If public opinion turns, history suggests the administration may pivot. Losing the backing of Congress could render the President a lame duck, limiting his ability to roll out additional policies.
If we do slide into recession, I believe it will be short-lived. Congressional pressure would likely ramp up quickly, possibly even leading to legal challenges aimed at rolling back the tariffs. More likely, the administration would shift course before it ever reaches that point.
From a fiscal standpoint, it also wouldn’t make much sense for the administration to allow the economy to tip into recession. A downturn would almost certainly prompt stimulus measures—which would widen the deficit and intensify inflation concerns.
We don’t have a crystal ball—but we do have a strategy. Long-term investing doesn’t depend on predicting headlines. It depends on preparation, flexibility, and discipline.
Our Long-Term Investment Themes Haven’t Changed
Regardless of the short-term volatility, the long-term structural trends we’re watching remain intact:
- Data Centers – As data creation explodes, secure and scalable infrastructure is critical. From retail to logistics, even non-tech companies need robust storage and access.
- Automation – Post-COVID supply chain weaknesses have accelerated investment in U.S.-based, tech-driven production facilities. Think robotics, AI, and smarter manufacturing.
- Power Supply & Management – Our electrical grid is aging, and electricity demand is expected to rise 160% by decade’s end. From EVs to AI, future innovation relies on power—and the grid must evolve to meet that demand.
Even if a recession slows growth, these areas remain essential. In fact, market overreactions may provide entry points into long-term opportunities.
What This Means for Your Portfolio
It’s worth noting: the stock market is a market of stocks, and not all stocks are down. Companies like MP Materials, T-Mobile, and Uber have posted gains. And importantly, most clients are not 100% invested in equities. Your portfolio is diversified, with a mix of asset types designed to manage volatility.
In other words: the S&P 500 dropping 13% does not mean your portfolio is down 13%.
And even with the recent drop, the S&P is still up more than 47% from the 2022 lows. Volatility is uncomfortable—but it’s normal. Investing isn’t about avoiding downturns; it’s about staying committed through them.
Your portfolio is built for moments like this. We will continue to mange portfolios accordingly and make changes deliberately—not reactively—with a long-term strategy in mind.
Final Thought
We don’t make decisions based on headlines, fear, or politics. We make them based on your goals, the evidence in front of us, and sound, long-term planning.
If you have questions—or just want to talk this through—we’re here. Reach out anytime.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All investing involves risk including loss of principal. No strategy assures success or protects against loss.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Great Valley Advisor Group, a registered investment advisor. Great Valley Group and Paragon Wealth Management are separate entities from LPL.