In times of turmoil, I believe communication is key.
First, it is important to remember that with the Snider Investment Method, we’ve prepared for these types of conditions. We know that bear markets happen roughly every 5 years, and that we must maintain income throughout these cycles to achieve success and peace of mind when uncertainty is at its peak.
During Thursday and Friday of last week, the stock market saw the largest sell-off since Covid. In the 48 hours following the tariff announcements, portfolio values have dropped as markets have declined in excess of 10%. Of course, this is scary for all investors, but it is particularly concerning for retirees relying on their portfolios to support their regular expenses.
If we stay at these levels, it will take a month or two for the Snider Method to adjust, but then I believe we will quickly return to normal income levels. At this moment, markets are still looking to establish a new base and move forward. We are in the midst of some uncertainty, which means emotions and, in particular, fear, are high. This is why we have the strict rules within the Method so that we don’t let our emotions harm our investments.
I’m confident that the Snider Method can weather these economic conditions and market declines just like we have in the past. Bear markets are always unnerving, but I have no doubt we can progress through this with success. Remaining disciplined, we can make the most of the difficult conditions and recover from the shock sooner.
It was well known that tariffs would be announced on April 2nd. As we approached the deadline, markets had declined roughly 10% leading up to the event. The steep drop-off following the announcement indicates that the level of tariffs and sweeping application was much more significant than people expected. In the weeks leading up to April 2nd, companies were frozen, waiting to see how they would be impacted. Today, they have some framework on how to approach the future.
As we look to move forward, companies will begin to adjust to new policy changes. It is hard to predict how these economic policies will help or harm us in the long term. From the administration’s point of view, they are just part of a bigger plan, including a more efficient government and permanent tax cuts. I also don’t rule out the possibility of a larger, global trade agreement resetting us back to more fair trade.
I will touch base again next Monday. Today, I just wanted to reiterate we are prepared for these conditions. In times like these, we all want to react, but staying the course and sticking to the plan in place is always the best course of action.
We appreciate your trust and support. Please don’t hesitate to contact us if you have questions or concerns.
Jesse Anderson, CFA