{"id":21838,"date":"2025-04-04T14:13:02","date_gmt":"2025-04-04T06:13:02","guid":{"rendered":"https:\/\/www.syfe.com\/magazine\/?p=21838"},"modified":"2025-04-04T14:17:59","modified_gmt":"2025-04-04T06:17:59","slug":"putting-the-tariff-selloff-into-perspective","status":"publish","type":"post","link":"https:\/\/www.syfe.com\/magazine\/putting-the-tariff-selloff-into-perspective\/","title":{"rendered":"Putting the Tariff Selloff into Perspective"},"content":{"rendered":"\n
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Markets have turned volatile following the announcement of sweeping new tariffs. While sharp selloffs can feel unsettling, especially when headlines dominate the narrative, it\u2019s important to zoom out. Here are a few points to help put the tariff selloff into perspective.<\/p>\n\n\n\n

1. Trump signals willingness to negotiate<\/strong><\/h2>\n\n\n\n

Tariff announcements are often confusing\u2014and this time is no different. Despite multiple White House aides insisting the new tariffs were not meant as a negotiating tactic, Trump has now said he\u2019s open to tariff talks with other countries<\/strong>\u2014if they offer \u201csomething phenomenal\u201d. <\/p>\n\n\n\n

This suggests tariffs are being used as a negotiation tool rather than a fixed policy outcome<\/strong>. <\/p>\n\n\n\n

2. Markets have seen this before\u00a0<\/strong><\/h2>\n\n\n\n

The 2018\u20132019 trade war with China<\/strong> caused sharp market volatility\u2014but once uncertainty settled, markets rebounded. Over the long term, corporate earnings remain the key driver of equity performance, not short-term headlines.<\/p>\n\n\n\n

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Source: FactSet, MSCI, Standard & Poor\u2019s, J.P. Morgan Asset Management. Returns are total returns in USD. Global equities return is based on MSCI All Country Index. US equities return is based on S&P 500 Index.\u00a0 Chinese equities return is based on the MSCI China index. As of 31 December 2024.<\/figcaption><\/figure>\n\n\n\n

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3. Fear is high\u2014but that may be a signal<\/strong><\/h2>\n\n\n\n

According to CNN Fear and Greed Index, the market is now in \u201cExtreme fear\u201d mode<\/strong>. While sentiment indicators don\u2019t predict future prices, they often reflect emotional extremes\u2014a classic contrarian signal for long-term investors<\/strong>.<\/p>\n\n\n

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Source: CNN Fear and Greed Index, 3 April 2025\u00a0<\/figcaption><\/figure><\/div>\n\n\n

4. It is never a good idea to \u201cpanic sell\u201d\u00a0<\/strong><\/h2>\n\n\n\n

Selling in a downturn often means missing the rebound. In fact, 50% of the market\u2019s best days occur during bear markets<\/strong>. Missing the 10 best day<\/strong>s over the last 30 years would have cut your returns by half; missing the best 30 days<\/strong> would slash returns by a staggering 83%<\/strong>.<\/p>\n\n\n\n

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Source: Ned Davis Research, Morningstar, and Harford Funds, Jan 2024\u00a0\u00a0<\/figcaption><\/figure>\n\n\n\n

5. Not all assets react the same<\/strong><\/h2>\n\n\n\n

While US equities saw sharp declines, other asset classes held up better. Global bonds<\/strong> and gold <\/strong>delivered strong performance amid the volatility, highlighting the importance of diversification.<\/p>\n\n\n\n

<\/td>3 April Return<\/strong><\/td>YTD Return<\/strong><\/td><\/tr>
Global Bonds<\/strong><\/td>1.4%<\/td>4.5%<\/td><\/tr>
Gold<\/strong><\/td>-0.6%<\/td>18.3%<\/td><\/tr>
China Equities<\/strong><\/td>-1.6%<\/td>14.0%<\/td><\/tr>
Europe Equities<\/strong><\/td>-2.5%<\/td>8.9%<\/td><\/tr>
Japan Equities<\/strong><\/td>-2.8%<\/td>-12.1%<\/td><\/tr>
Global Equities<\/strong><\/td>-3.4%<\/td>-3.6%<\/td><\/tr>
US Equities<\/strong><\/td>-4.8%<\/td>-7.9%<\/td><\/tr>
Bitcoin<\/strong><\/td>-5.4%<\/td>-12.3%<\/td><\/tr><\/tbody><\/table>
Source: Bloomberg. Returns in USD. 3 April 2025.\u00a0<\/figcaption><\/figure>\n\n\n\n

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What Should You Do Now? <\/h2>\n\n\n\n

\u2705 Keep emotions in check<\/strong><\/h3>\n\n\n\n

Don\u2019t let fear drive decisions\u2014stay invested, time in the market beats timing.<\/p>\n\n\n\n

\u2705 Review your investment portfolio<\/strong><\/h3>\n\n\n\n

Reassess goals and rebalance exposure; diversify beyond growth stocks into global strategies like <\/strong>Equity100<\/strong><\/a>, or strategies with downside protection like Protected Portfolio<\/strong><\/a>.  <\/p>\n\n\n\n

\u2705 Use the sell-off to your advantage<\/strong><\/h3>\n\n\n\n

Market dips reset valuations of equities \u2014consider investing extra cash or dollar-cost averaging over time<\/strong>.<\/p>\n\n\n\n

\u2705 Diversify by investing in bonds<\/strong><\/h3>\n\n\n\n

Bonds provide diversification and steady income. Currently, bonds offer attractive yields. For instance, yield-to-maturity of Income+ Preserve and Enhance<\/strong><\/a> stands at 6.5% and 7.0% respectively.<\/p>\n\n\n\n

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Read More: <\/strong><\/p>\n\n\n\n