17 April 2025
The recent market volatility, particularly the selloff linked to ongoing tariff discussions and implementation, can be concerning. Seeing fluctuations in portfolio values is never comfortable and it's natural to question the impact on investments.
Understanding the impact
From an economic perspective, tariffs create uncertainty. They have the ability to disrupt global supply chains, increase costs for businesses and consumers, contribute to inflationary pressures, and impact the profitability of companies, especially those that are majorly involved in international trade. Markets, by their forward-looking nature, dislike uncertainty, and tend to react quickly, and negatively to these types of events, as expectations for economic growth and corporate earnings get adjusted. This is exactly what we are seeing at this moment.
A historical perspective on market turbulence
During April 2025 the focus is on tariffs, global trade and global growth. But there have been countless prior periods of uncertainty and volatility throughout history – geopolitical tensions and conflicts, the COVID pandemic, shifts in monetary and fiscal policy, the Global Financial Crisis, the DotCom bubble burst, economic slowdowns, and also trade disputes. While these events can be unnerving in the short-term, they are not unprecedented.
The importance of staying the course
Two core principles of successful long-term investing that have been put to the test through the years should remain top of mind at this moment: Staying invested through short-term market fluctuations and turbulent periods, and remaining disciplined in your investment strategy, are the best approaches to preserving and growing long-term wealth.
Making knee-jerk decisions to sell investments will turn temporary paper losses into permanent ones, whereas given enough time, this market rout simply cannot perpetuate. Selling out now critically also removes one’s ability to participate in the subsequent recovery. Something we have experienced many times over: Timing the market is notoriously difficult, and periods of recovery can be swift and significant. As we have recently been guiding to, often the market’s best-performing days take place not long after selloffs and missing out on these recovery periods can meaningfully detract from long-term returns. Trying to time an ideal exit and re-entry point effectively is exceptionally difficult, even for the most seasoned investment professionals.
Focus on your long-term strategy
We must remain mindful that periods of market volatility are inevitable. Investment portfolios are designed with this in mind, hand-in-hand with a focus on long-term wealth creation.
At Glacier, we remain steadfastly focused on your long-term financial goals. While the current news flow on tariffs creates short-term noise and volatility, the essential fundamental drivers of long-term growth – such as innovation, growing corporate earnings, and global economic development – remain.
