Navigating Market Volatility and Tariffs: A Q&A with Seasoned Professionals
In times of market uncertainty, clear communication and proactive guidance are essential. At Herbein Financial Group, we’ve received several questions from clients concerned about recent market volatility, new tariffs, and the broader implications for their investment portfolios.
To provide clarity, we’ve put together this guide covering seven of the most frequently asked questions, along with insights into navigating these developments.
1. Why is the market so volatile right now?
In our opinion current volatility is influenced by a combination of factors, including Federal Reserve policy decisions, ongoing inflation concerns, geopolitical developments, and new tariffs that could impact global trade. Market participants appear to be reacting to changing economic signals, earnings expectations, and policy shifts, which can often result in short-term fluctuations. While market movement is a normal part of investing, these periods can feel more uncertain.
2. How will the new tariffs impact my investments?
Tariffs can affect specific sectors and companies by increasing costs or reducing access to global markets. Industries with higher exposure to international trade, such as manufacturing, agriculture, and technology, may face supply chain disruptions or margin pressure. These factors can influence short-term performance. It’s important to monitor sector-specific risks and adjust strategies accordingly.
3. Should I be making changes to my portfolio right now?
Reacting to short-term volatility without a clear plan can lead to unintended consequences. It’s essential to evaluate potential changes within the context of long-term goals, financial plans, and risk tolerance. While market volatility may prompt reflection, changes should not be based solely on market headlines. Instead, a disciplined approach rooted in strategic long-term planning is key.
4. Are we heading for a recession because of these trade tensions?
Tariffs can contribute to economic slowing, especially if they persist or escalate. However, they are just one of many factors influencing the broader economy. While some areas may be showing strain, others remain stable. Instead of attempting to predict the outcome, a flexible and adaptive approach to portfolio management can help navigate various economic conditions.
5. What is your team doing to manage risk during this time?
Our process includes ongoing monitoring of portfolios for risk factors such as sector concentration, interest rate sensitivity, and exposure to tariff-affected industries. It also incorporates strategies like tactical asset allocation and risk management tools to help mitigate downside exposure. This approach is informed by research and data, ensuring a balanced and thoughtful response to evolving market conditions.
6. How do rising costs from tariffs affect inflation and interest rates?
Tariffs can lead to higher input costs, which may contribute to inflation. In turn, higher inflation could prompt central banks to adjust interest rate policies. These shifts affect both equity and fixed-income markets. As such, it’s essential to remain informed about inflation-sensitive investments and manage portfolios accordingly.
7. What should I focus on instead of headlines?
Market headlines often highlight short-term developments that may not provide the full economic picture. Instead of focusing on daily news cycles, it’s crucial to stay grounded in long-term goals and strategies. Maintaining discipline and a clear focus on risk management, asset allocation, and portfolio oversight can help keep investments aligned with long-term objectives.
The Value of Working with an Advisor:
Partnering with an experienced advisor can provide ongoing support during uncertain times. A well-defined financial strategy, informed by market insights and guided by seasoned professionals, can help you stay focused on your long-term objectives.
Learn more about how our team can help you navigate market volatility and manage risk by contacting our team today.
Article contributed by Matt Kline
Disclosure: Herbein Financial Group is a joint venture between Northeast Financial Group, Inc. (“NEFG”) and Herbein Financial Group, LLC (“HFG”). Investment Management services are provided through NEFG while HFG will provide certain relationship services.
Advisory services provided by Herbein Financial Group, LLC. ("Herbein Financial Group”), an SEC registered investment adviser. Registration as an investment advisor does not constitute an endorsement of the firm by the Securities Exchange Commission or any other securities regulator and does not mean the advisor has attained a particular level of skill or ability. Herbein Financial Group, LLC. only transacts business in states where it is properly notice filed or excluded or exempted from notice filing requirements. Registration does not imply a certain level of skill or training. A copy of Herbein Financial Groups current Relationship Summary and written disclosure statement discussing its business operations, services, and fees is available upon request from Herbein Financial Group or by going to the SEC's website (www.adviserinfo.gov).
This newsletter is provided for informational purposes only. This newsletter contains data from third party sources. Although Herbein Financial Group believes these sources to be reliable it makes no representations as to their accuracy or completeness. The information contained herein is based upon certain assumptions, theories and principles that do not completely or accurately reflect your specific circumstances. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Furthermore, this newsletter may contain certain forward-looking statements that indicate future possibilities. Due to known and unknown risks, other uncertainties and factors, actual results may differ materially. As such, there is no guarantee that any views and opinions expressed herein will come to pass.
Herbein Financial Group, LLC. is a Registered Investment Advisor registered with the Securities Exchange Commission. This report is for information purposes only and does not constitute a complete description of our services or performance. The information contained in this document is not a solicitation to sell securities or investment advisory services where such an offer would not be legal.
The information discussed is intended to serve as a basis for further discussion with your financial, legal, tax and/or accounting advisors. It is not a substitute for competent advice from these advisors. Herbein Financial Group, LLC. or its advisors are not authorized to practice law or provide legal, tax or accounting advice. If a numerical analysis is shown, the results are neither guarantees nor projections, and actual results may differ significantly. Any assumptions as to interest rates, rates of return, inflation, or other values are hypothetical and for illustrative purposes only. Rates of return shown are not indicative of any particular investment and will vary over time. Any reference to past performance is not indicative of future results and should not be taken as a guaranteed projection of actual returns from any recommended investment.
