Global stocks fell sharply on Thursday and Friday after US President Donald Trump’s so-called Liberation Day tariffs went into effect.
Whether the President is being deliberately obtuse about the economic upheaval these tariffs will cause, or if he’s playing chess while the rest of the world is playing checkers is anyone’s guess.
What investors want to know is whether they should do something with their own portfolios.
Once again I find my inbox and DMs flooded with messages from anxious investors:
“I am a bit confused and concerned with the US tariffs if it is still a good plan to leave the money in those ETFs (VGRO/VBAL) long-term? I just wanted to check in with you in case a change of plans might be advisable?”
and:
“Hi Robb, hope all is well amidst this madness! Any ETF tweaking needed?”
and:
“Robb, my investments are plummeting. Should I do something about this, and if so, what?”
Interestingly, a few brave investors wondered about buying the dip:
“Would this be a good time to buy some ETF’s at low prices for my non-registered account?”
and:
“With the recent market declines, do you think it makes sense to take $20-$25k from my emergency fund, put in the market now and pay myself (emergency fund) back over the next few months?”
I probably sound like a broken record when I say you shouldn’t change your investment strategy based on current market conditions (tempering those greedy or fearful emotions).
Telling my clients to stay the course while my own portfolio fell $60,000 in one day
— Robb Engen (@boomerandecho.bsky.social) 4 April 2025 at 07:13
Yes, it sucks to see your investments fall by 10% in two days. It’s tempting to do something, anything, to stop the bleeding and get to safety.
Yet we also know that while markets don’t go up in a straight line, their general trajectory is up-and-to-the-right over time. Staying invested in a properly diversified portfolio ensures that you capture those good long-term returns.
The alternative is jumping in and out of the market every time we’re faced with a scary headline. Indeed, there’s always going to be a reason to sell:
So, while “stay the course” is the correct advice, it can also seem maddeningly unhelpful. What do you mean, do nothing? Surely there’s something to do besides standing there and getting punched in the face?
First, we need to remind ourselves that our investment plan does not (or should not) expect positive double-digit returns every year. Stocks are risky if your timeframe is one day, one week, one month, one year, or even 3-5 years.
Also remind yourself that market returns in 2023 and 2024 were extraordinary. When prices are high today, we should expect future returns to be lower (and vice-versa).
If you were happy with your global equity portfolio value on August 12, 2024 – well, that’s exactly where we are today.
Finally, if you don’t know your risk tolerance, this is how you find out. Can you steel your nerves through a period of market declines? Or are you perhaps holding more equity exposure than you can stomach?
Want to hear how two of the best advisors in the business are communicating with their clients to keep them from panicking and making poor financial decisions amidst this market volatility? Listen to this excellent conversation between Michael Kitces and Carl Richards.
In the meantime, repeat after me:
I am an emotionless robot when it comes to investing.
I have a well diversified investment plan.
I will not change that plan based on current market conditions.
I will keep investing regularly according to my plan.
I’m going to put down my phone now and move on with my life.
This Week’s Recap:
My last weekend reading update reminded us why we diversify.
We filed our personal tax returns for 2024 and ended up with a refund of 20 cents. Now that’s tax optimization!
We are less than two weeks away from a trip to Italy over the Easter break. Last year I found a terrific deal on a business class flight from Calgary to Frankfurt to Florence for April 2025 so we’ve been looking forward to this trip for a while.
We’re staying in Florence for the long weekend and then taking a train to Cortona, picking up a rental car, and driving to a Tuscan villa to stay for a week. Fingers crossed for good weather, as there is an outdoor (heated) pool and a lovely patio area to relax and enjoy the Tuscan views.
We had an unfortunate change of plans for the return journey. We initially planned to return via the same route that got us there (Florence to Frankfurt to Calgary) but about a month ago we received a change notification that the Florence to Frankfurt flight got removed from the schedule.
So now we’re returning our rental car and taking the train south to Rome, staying one extra night, and flying home directly from Rome to Calgary. Not the end of the world to spend a night in the Eternal City.
Weekend Reading:
Introducing the Time of Your Life app – a calculator that will help you visualize how you will spend the rest of your life.
The 2025 paper Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice suggests that investors should hold globally diversified 100% stock portfolios for their entire lives. It has been met with intense criticism:
I’ve also written about this a few months ago in my VEQT and Chill weekend reading update.
Millionaire Teacher Andrew Hallam answers the question, should you take higher risks if you are late to investing?
“People starting late are at greatest risk of chasing past performance. They want to make up ground. But instead, they should diversify with global stocks and bonds. You never know what market is going to end up winning, so it’s best to own them all.”
A Wealth of Common Sense blogger Ben Carlson shares a short history of tariffs.
Using something called “effective number of stocks”, PWL Capital’s Justin Bender explains why XEQT is actually more diversified than VEQT:
Finally, after a college basketball star made $2M in endorsements, the internet hotly debated whether the 23-year-old was already set for life.
Have a great weekend, everyone!
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