Please Remain in Your Seats and Keep Seat Belts Buckled

A Little Perspective on the Tariff Tantrum

Friday, April 4, 2025

(If you are in Panic Mode today, skip to the paragraph marked with an * and read for

immediate relief - then re-read the entire email.)

PLEASE KEEP SEAT BELTS BUCKLED AND REMAIN IN YOUR SEATS.

This is a phrase you often hear from the cockpit when experiencing turbulence while taking a flight up in the “wild blue yonder.”  While I’m not a pilot nor the son of a pilot, it’s a phrase I’m going to borrow today.

As of this writing, the S&P 500 is down by more than 4%!  By all accounts, a pretty steep sell-off.  Days like today call for a little perspective, so here’s mine.

Year to date, the S&P 500 is down about 7% (a stock market correction is when the market sells off 10% or more and it happens historically about every 12 months intra-year).  While the market is about 10% off it’s highs in February, the market level today puts us back to about September of last year.  In fact, the S&P 500 is up over 4% over the last 12 months.

Remember, headlines drive fear and as I often say, “Panic is NOT a sound investment strategy!”  Every market downturn is simply a temporary setback on the market’s permanent advance.  Evert setback in the market’s history has been followed by the market going higher 100% of the time.  So, I like our odds here.

Panic is NOT a sound investment strategy! Every market downturn is simply a temporary setback on the market's permanent advance.

The status quo, as afar as the country's financial practices, was simply unsustainable.  Trillion dollar deficits can’t be tolerated any longer with our debt nearing $40 trillion.  Something had to be done.  The proverbial can cannot be kicked down the road any longer.  Are tariffs the answer?  Well, which way the ball bounces in regard to tariffs has yet to be seen.  I believe, based on several recent examples, that tariffs will lead to a renegotiation of the trade imbalances.  If so, it’s a win.  If not… who knows.  However, something had to be done to change the trajectory of ballooning debt and interest payments on that debt that, as stated earlier, is unsustainable.  Short term pain means long term gain here. 

*SO WHAT SHOULD YOU DO NOW?  First of all, remain calm.  The best and strongest companies are on sale!  (I’ve never heard of anyone complaining about lower prices)  If you are properly allocated and well diversified, you can weather this storm.  I've heard it said, "Invest in the best and forget the rest."  Secondly, remember that successful investing requires faith, patience, and discipline.  That's easy when the market is going up, but on days like today, more challenging, but never more important.  That's why our frequent discussions with you about your investment objective (which lane of traffic you want to drive in) and risk tolerance (how much market pain you can take) are so important. Thirdly, if you are feeling anxious and want to discuss your investment objective and risk tolerance, give us a call.  We’re here for you!

Sound investing requires faith, patience and discipline.

In the long run, the stock market is driven by earnings, not temporary headlines.  The world’s best companies keep innovating.  Over time, that drives revenues… then earnings… then stock prices!

So, buckle up.  Keep your seat.  And for Pete’s sake, turn off the TV!

Blessings!

Jim Pannell

(The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  All performance referenced is historical and is no guarantee of future results.  All indices are unmanaged and may not be invested into directly.)