Foggy Roads Lie Ahead; Prepare Yourself for Risks, Opportunities

QUESTION: I just reallocated my portfolio, but now I am second-guessing my choices with the 10-year Treasury rate falling and the stock market reeling in the wake of recent government actions. What should I do?

ANSWER: Investing is easy when the sun is shining, the flowers are blooming and the path ahead is clear. It’s even manageable when economic storms are brewing, and risks are well defined. But what we’re experiencing now is like driving through dense fog—you can’t see far ahead, and every move feels uncertain. The good news is that we’re not completely in the dark. We had a good sense of the economic landscape before this uncertainty set in, which provides some guidance.

Perspective is key, so let’s talk about what the situation isn’t. It’s not 2008 or 1929. We don’t appear to be on the brink of a financial crisis. Could we see higher prices, slower growth, or even a recession? Quite possibly. A financial crisis leading to an economic collapse? Highly unlikely.

So, what exactly is happening? No one seems to know—and that’s the challenge. Tariffs are proposed, delayed, removed, implemented and retaliated against, creating uncertainty. Markets and businesses prefer a clear path forward, and right now, many are proceeding cautiously or even pausing as they are unsure where to deploy capital. This likely means continued volatility and a slowdown in economic growth. However, uncertainty doesn’t last forever. Either the situation will become clearer, or businesses and market participants will adapt.

How should I invest in this environment?

Market volatility is likely, and the risk of significant selloffs remains. Now is a good time to contact your advisor and reassess your risk tolerance—both emotionally and financially.