Hi Dean, What’s this Trump guy doing! I’ve been watching my super balance decline quite significantly over the past month and am concerned around the outlook for my portfolio in retirement. Can you shed some light on how I should approach current market conditions? Regards, Catherine, Freshwater
Hi Catherine, Thanks for your message, and you’re not alone – many investors are feeling the impact of recent market volatility. One major factor driving uncertainty right now is Trump’s tariff policies, which have led to heightened economic instability.
To break it down, a tariff is a tax imposed on imported goods, making them more expensive for businesses and consumers. Governments use tariffs to protect domestic industries from foreign competition, but they can also trigger retaliatory measures from other countries, increasing production costs and disrupting global supply chains.
This isn’t the first time Trump has taken a hard stance on trade. In his first term, his administration imposed sweeping tariffs – particularly on Chinese goods – aiming to reduce the US trade deficit. In response, China and other trading partners imposed their own tariffs on US exports, leading to a full-scale trade war. The result? Increased uncertainty for businesses, rising costs for consumers, and unpredictable financial markets. Now, with Trump 2.0, we’re seeing similar policies play out on an even broader scale.
The key issue for investors is that tariffs don’t just affect international trade – they filter through to the entire economy. When businesses face higher costs for raw materials and components, they pass those costs on to consumers through higher prices, which can reduce purchasing power and hurt company profits. When profits decline, stock markets react negatively, often leading to market downturns that impact super balances and retirement portfolios.
So, how do you invest?
The reality is that no one can predict short-term market movements. The key to managing risk is preparation. A well-diversified investment portfolio should be structured to weather different economic conditions, including trade disputes and volatility. Defensive assets, such as bonds or income-generating investments, can provide stability during uncertain times.
Too often, investors react emotionally to market fluctuations – selling in downturns and missing out on recoveries. That’s why having a long-term strategy tailored to your retirement goals is crucial. If you’re unsure how your portfolio is positioned for the current climate, now is a great time to seek professional financial advice.
If you’d like to discuss your investment strategy, feel free to reach out to our office at 8376 0350.
Best regards, Dean Cowdroy
Financial planner Dean Cowdroy of Up Wealth Management is an Authorised Representative of Consultum Financial Advisers Pty Ltd, AFSL 230323. Phone 8376 0350 or visit upwealthmanagement.com.au
Any advice or information in this publication is of a general nature only and has not taken into account your personal objectives, financial situation and needs. Because of that, before acting on the advice, you should consider its appropriateness to you, having regard to your personal objectives, financial situation and needs.
