You’ve probably heard the word “tariffs” tossed around in the news—usually tied to trade wars, economic uncertainty, or political headlines. But what do tariffs actually mean for you as an investor? And more importantly, how could they impact your retirement portfolio? Let’s break it down.
The market has been volatile lately in response to the tariffs that are rolling out. Market volatility is never fun to endure, but it is a normal part of investing.
No doubt, 2022 was a painful year in the stock market. From January through October, the S&P 500 was down 25%. It recovered slightly in the 4th quarter to end the year down about 20%. This was one of the worst years since the Great Financial Crisis of 2008. The market reacted sharply to the Federal Reserve increasing interest rates at a rapid clip. Now that inflation seems to be easing, are we out of the woods yet?
While saving for retirement you face a lot of uncertainty along the way. Markets continue to go up and down, inflation may go up which reduces your purchasing power. Once you get to retirement you may be worried about outliving your retirement nest egg. One big retirement risk that people often do not consider, sequence of returns risk.
The odds of filling out the perfect bracket are pretty scarce - so are the odds of consistently selecting prime investments within the market. This can make the process of approaching March Madness, and investing, fairly daunting.
With the recent market volatility and the seemingly endless stream of bad news, you may be wondering if this is a good time to reduce risk in your investment portfolio. The Federal Reserve announced last week that they remain committed to increasing interest rates as long as it takes to get inflation under control. The market reacted poorly to that news. You may be wanting to reduce risk in your portfolio.