The world is full of unknowns and uncertainties. Right now is a delicate time in global finance, as the President of the United States, one of the largest consumer and financial markets on earth, is rolling the dice. The new administration is conducting a massive high-stakes economic experiment in which investors are among the lab rats: What happens when a huge market employs tariffs not only on particular goods or on imports from particular trading partners but on nearly everyone? What happens, further, when those tariffs materialize overnight and evaporate just as fast— when they are in fact merely threats? How can businesses who buy materials overseas or consumers who purchase goods overseas predict costs, or plan spending?
Now add in the effect of those tariff countries placing their own tit-for-tat tariffs on American goods and materials? Will buying continue at higher prices for all? Will it drop off a cliff? How can businesses and consumers manage the uncertainty?
And underlying all of this for investors: What will happen to the revenue of the businesses we own? To profits? How can we plan for that? What do we do with our portfolios in the meantime?
My investing colleague Ben Carlson just dropped a column every investor should read: