Tariffs, Turbulence, and Timeless Principles

Why Perspective Beats Prediction

The first few months of 2025 have reminded us that the market is anything but predictable.

From sudden sell-offs to historic rallies, U.S. markets have been whipsawed by aggressive trade policies, shifting Federal Reserve signals, and emotionally charged investor sentiment. We’ve seen volatility on par with the early days of COVID-19 and the Great Financial Crisis, along with trading volumes at levels we've never experienced before.

But the takeaway isn’t that markets are unstable; it’s that they are emotional, often irrational, and easily driven by headlines rather than fundamentals. To put things in perspective, here’s a summary of where we’ve been in just the first third of the year:

What’s Happened So Far in 2025

• January 1–February 19: The S&P 500 made new all-time highs, up nearly 5% on the year.
• February 20–27: Weak economic data, the first wave of tariffs, and recession fears sparked a 5% slide, wiping out early gains.
• March 3–10: President Trump launched tariffs on Canadian and Mexican goods. The S&P 500 fell over 10%, and the Nasdaq dropped over 12%.
• April 2–3: Sweeping tariffs dubbed “Liberation Day” triggered the worst two-day drop in 75 years, over 10%.
• April 3–4: Stock price declines triggered margin calls for hedge funds, leading to broad forced selling of long-term U.S. Treasuries and spiking bond yields.
• April 7: The market opened down -4.5%, briefly rallied +3% on a rumor of tariff pauses, but ended flat as the rumor was denied, on one of the highest trading volumes in history.
• April 9: President Trump officially paused tariffs (except on China), and the S&P 500 surged nearly 10% in just five minutes, fueled by short covering and algorithmic buying.
• April 11: Despite the turbulence, the S&P posted its biggest weekly gain since 2023, up 5.7%.
• April 11–21: Renewed political uncertainty, earnings concerns, and falling consumer confidence drove markets down 5.5% in six trading days.
• April 21–25: Stronger-than-expected corporate earnings, easing trade fears, and generally positive economic data sparked a sharp 7% rebound.

This year has been a case study of how emotion, speculative positioning, and large-scale trading can drive short-term market behavior.

The Problem with Prediction

Occasionally, we hear: “If I just knew the next headline, I’d know what to do.” But even if you could predict the next headline, it still wouldn’t tell you how the market would react.

For example, after President Biden was elected in 2020, many expected green energy stocks to soar. Instead, oil stocks outperformed, while green energy lagged. The market didn’t behave rationally; instead, it moved on sentiment, surprise, and ultimately earnings.

Making it harder, market timing requires you to be right twice: once when you get out, and again when you get back in. And as we’ve recently seen in April, the best days often follow the worst ones. Missing just a few of those critical rebound days can permanently damage long-term returns.

One of our core investment principles, in the words of John Moore himself, is: “Don’t miss the recovery.”

Prepare, Don’t Predict

Rather than guess at the future, we build plans designed to weather uncertainty.

For retirees, we set aside 12–24 months of income in cash or stable reserves. This way, their daily needs aren’t impacted by market swings.

For any client with major expenses in the next 12–24 months, such as buying a home, purchasing a car, or paying tuition, we keep those dollars out of the market. This provides peace of mind, liquidity, and the flexibility to stay invested with the rest of their portfolio for long-term growth.

It’s a strategy rooted in biblical wisdom.

As Proverbs 6:6–8 reminds us:

"Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest."

Just as the ant prepares in seasons of plenty for times of need, wise investors plan ahead—building reserves not out of fear, but out of prudence.

That’s how we avoid reacting out of panic—because we’ve already planned with wisdom.

The Wisdom of Diversification

Another key principle we embrace is diversification: spreading investments across different sectors, styles, and asset classes rather than concentrating risk in one place. This isn’t just smart investing—it’s wise stewardship.

As Ecclesiastes 11:2 advises:

"Give portions to seven, yes to eight, for you do not know what disaster may come upon the land."

The future is always uncertain. Diversifying your financial strategy prepares you for a variety of outcomes, positioning you to weather both storms and seasons of growth without depending entirely on a single outcome.

Timeless Perspective

The Bible gives us a wise warning against forecasting:

“But a prophet who presumes to speak in my name anything I have not commanded... is to be put to death.” – Deuteronomy 18:20

While we certainly do not stone financial pundits today, the message is clear: forecasting the future is risky business, and it is often wrong.

Instead, we rely on process over prediction, data over headlines, and discipline over emotion.

As Jesus said:

“Who of you by worrying can add a single hour to your life?” – Matthew 6:27

We can’t control the headlines, or what will happen tomorrow, but we can control how we prepare and how we respond. That’s where peace and real investment success come from.

Final Thought

The first part of 2025 has been a masterclass in volatility. But we’ve been here before, through pandemics, recessions, trade wars, and more.

Your plan isn’t built for perfect conditions. It’s built for exactly this kind of uncertainty.

So when headlines scream and markets swing, zoom out. Take a breath. Trust the process.

In times like these, the right response isn’t panic—it’s perspective.

And that’s something no headline can take away.

Disclosure: This material is for informational purposes only and is not intended as investment, tax, legal, or financial advice. All information is believed to be accurate at the time of publication but is subject to change. Past performance is not indicative of future results. Investing involves risk, including the potential loss of principal. Please consult with a qualified financial professional before making decisions based on this material.