Tariff Turbulence
On 2nd April, US President Donald Trump announced a broad set of new tariffs on a range of international trade partners. The size and scope of these tariffs surprised many investors and led to a sharp reaction across global markets.
These new tariffs add to earlier ones targeting countries like China, Canada, and Mexico. The Trump administration’s goals include:
Reviving US manufacturing,
Reducing trade deficits and encouraging self-reliance,
Gaining leverage in international trade negotiations, and
Helping fund the continuation of recent US tax cuts.
How Markets Responded
Global investment markets dropped as investors reacted to the uncertainty. Many shifted away from shares and into safer assets such as bonds and gold.
Here’s how some of the major markets have moved so far in 2025 (to 4th April):
Financial Index Performance
| Index | Change Since Start of 2025 | Change from 2025 Peak | Since End of 2022 |
|---|---|---|---|
| S&P 500 (US) | -13.7% | -17.1% | +32.2% |
| NASDAQ (US) | -19.3% | -22.3% | +48.9% |
| ASX 200 (Australia) | -6.0% | -10.4% | +8.9% |
| Gold (USD/oz) | +15.8% | -3.1% | +66.6% |
What Does This Mean for Investors?
Although recent falls have been sharp, it’s important to consider them in the context of strong gains over the past couple of years. While it can be alarming to see such falls in investment values, it’s important with investments (as with many things) to think rationally.
It’s also vital during periods like this to remember that you’re an investor, not a speculator. The time-horizon between the two is very different. A speculator is trying to profit from short-term price swings—often driven by fear or greed. An investor, on the other hand, is focused on building or holding a sensible long-term portfolio of assets, and tuning out short-term noise and headlines.
In fact, for clients who are still working and building their wealth, these periods usually turn out to be great buying opportunities. This can happen automatically through regular superannuation contributions or through deliberate top-ups—commonly known as “buying the dips”.
For retirees, it’s worth remembering that volatility is expected from time to time. Portfolios are typically structured with this in mind, and often include significant allocations to cash and fixed income investments. These provide funding for short to medium-term needs, which in turn gives you time and space to be patient with shares and other growth assets—those which are experiencing the current volatility.
In both cases, panic selling can do more harm than good. It means locking in the losses and usually missing the eventual recovery. As Warren Buffett famously said, “The stock market is a device for transferring money from the impatient to the patient.”
Looking Ahead
The Trump tariffs are a major and unexpected development, and global markets are adjusting to a new layer of uncertainty. Valuations in some areas are becoming more attractive, especially for businesses less affected by international trade tensions, but there’s likely to be ongoing volatility in the short term.
At AGS Financial Group, we’re actively monitoring the situation and continually reviewing how it may affect your investment portfolio. We encourage all clients to remain focused on their long-term strategies and to avoid reacting to short-term market movements.
As always, if you have any questions or concerns, please speak with your financial planner or contact us directly. We’re here to help.