Trump and Investment Tips

As we move through 2025, the global economy is facing some big changes, especially with the trade wars and tariffs introduced by President Donald Trump. These policies have shaken up markets around the world, and we want to give you a clear picture of what's happening, how the markets are performing, and some smart investment advice during these uncertain times. DISCLAIMER: This may all have changed by the time you are reading this)

Trade Wars and Tariffs: What's Happening?

President Trump's recent increase in tariffs on countries like China, Canada, Mexico, and the European Union has caused a lot of market ups and downs. These tariffs, which now average 25.8% on all imports, are making global trade more complicated. According to the Tax Foundation, these tariffs could reduce U.S. GDP by 1.0% and decrease after-tax income by an average of 1.2%.

Economist Erica York from the Tax Foundation says, "The economic burden of these tariffs is substantial, impacting both businesses and consumers. The long-term effects could lead to a reconfiguration of global supply chains and trade relationships".

Market Performance Year to Date

This year, the major markets have seen a lot of ups and downs. The S&P 500 has dropped by 13%, showing that investors are worried about how the trade war will affect economic growth. The Nasdaq has fallen even more, by 19%, while U.S. Treasuries, usually a safe bet, have been unusually volatile. On the other hand, gold has hit record highs, proving to be a reliable investment during these uncertain times. The South African All Share is faring well, up 7% year to date, which could be off the back off the weak Rand.

What Could the Future Hold?

Analysts have different views on what might happen next. Some, like those at Oppenheimer Investment Management, are optimistic and predict the S&P 500 could rise by 18.4% by the end of the year. Others, like Peter Berezin from BCA Research, are more cautious and foresee a possible recession, which could lead to a 26% decline.

Mark Hamrick from Bankrate suggests that while there are reasons to be cautious, the resilience of the U.S. economy and stock market has been remarkable. Michael K. Farr from Farr, Miller & Washington believes that the Federal Reserve's easing cycle might help avoid a recession, but it's too early to be certain.

Tips During Volatility

Given the current market conditions, here are some strategies to help protect your investments:

1. Diversify: Spread your investments across different types of assets to reduce risk.

   
   

2. Defensive Investing: Focus on sectors that usually do well during economic downturns, like utilities, healthcare, and consumer staples.

   
   

3. Stay Calm: Avoid making quick decisions based on short-term market changes. History shows that markets tend to recover over time, so keeping a long-term perspective is important.

   
   

4. Trust your investment strategies and the people making the decisions.

   
   

5. Do NOT try and time the market

As Warren Buffett wisely advises, "Be fearful when others are greedy and greedy only when others are fearful".

This timeless principle highlights the importance of staying disciplined with your investments, especially during uncertain times.

If you have any questions or need further assistance, please feel free to contact us.