I just finished watching a powerful clip where Singapore’s Prime Minister raised concerns about rising global trade tensions, drawing a sobering parallel to the 1930s, a time when escalating economic conflicts helped pave the way to global war. This is not just a history lesson. It is a reminder of how fragile the global system can become when nations retreat into protectionism and economic nationalism.
Last week’s tariff headlines certainly stirred the pot. I found myself playing full-time financial therapist, listening as clients rode the emotional highs and lows of the market. Most took it in stride, recognizing that volatility is part of the game while some hit the panic button with such force, it might need repairing.
Here is the part where I eat humble pie. I got this one wrong. The tariff rates announced are higher than I expected and yes, even the penguins are not spared. What really caught me off guard was the reliance on a basic, grade-school calculation, as if one size fits all.
Will these rates be negotiated down in the coming months as part of Trump’s broader strategy? It would not be the first time harsh initial terms were used as leverage in a longer game of negotiation. Time will tell.
Here is what experience and our portfolios continue to teach us that market turbulence may be unsettling, but it is not uncommon. We have seen this movie before, and the ending does not have to be tragic unless we let fear take the wheel.
The good news? While some are taking a step back to process, others are stepping up to engage. After three decades in this show business, I can tell you the fundamentals have not changed. My seasoned partners and clients will tell you that diversification is still your armor, asset allocation is still your compass and discipline especially when things get noisy is your edge.
Interestingly, there may even be a silver lining to these tariffs but that is a topic for another day. Now, I will be back on my meditation cushion, practicing what I preach.