MONEY HACKS: Tariffs, Inflation & Market Chaos: What It Means for Your Money

The past few weeks have been rough. Stocks have dropped nearly 10%, headlines are filled with alarming statements, and you might be wondering: should I be worried?

Let’s take a step back. Market drops like this aren’t unusual. In fact, a 10% decline happens almost every year. The biggest mistake investors make? Reacting emotionally instead of sticking to their strategy.

So, what’s causing the turbulence?

• Tariffs and trade wars are shaking investor confidence.
• Inflation concerns and Federal Reserve decisions are adding uncertainty.
• Global conflicts are fueling market swings.

This isn’t the first time we’ve seen volatility, and history shows that staying the course leads to better long-term results. In this Money Hacks video, Alex breaks down what’s happening, how it affects your money, and what you should do next.

Have any money questions you’d like answered? Our Money Hacks series is built on conversations we have with employees, investors, savers, and anyone planning for their financial future. What topics are on your mind for our next episode?

Additional Resources:

• Market Comments from the HUB Investment Research Teams
• Monthly Financial Jargon: Market Sectors
• What Do You Need to Know About Market Risk?
  
  

Video Transcript:

Hey, this is Alex Assaley, and it's episode number 124 of Money Hacks.

After two incredible years of market performance in 2023 and 2024, for the first time in a while, we're starting to see a heightened level of volatility in U.S. stocks and the markets overall.

That's right. In 2023 and 2024, the S&P 500 index, which includes the 500 largest U.S. companies, was up over 20% each year. Now, in the first quarter of 2025, the market has been much more volatile, with more ups and downs. In the last three weeks, we've seen quite a bit of a sell-off, even entering correction territory—down about 10% in some of the major stock indexes.

First of all, we know that investors get worried. This can be a really unnerving period. When you start to see more volatility in the markets, you also start to see your retirement accounts or other investments go down.

Right now, this is driven by a number of different factors, including tariffs, trade conflicts, heightened geopolitical risks and uncertainty, and persistent inflation. Additionally, after several good years in the market, at some point, you start to see a bit of a cooling-off or a pullback.

As investors, it's imperative to focus on the core tenets of long-term strategies to ground ourselves in making the most appropriate decisions for our own investment portfolios.

First, I would say that volatility like this is part of the cycle. This is a normal part of investing in the financial markets. While we've had a couple of years where volatility or market downturns have been relatively shallow, historically, over the last 40 years, the market has declined an average of 14% within a given year. Yet, over that same 40-year period, the average annual return has been a positive 10%.

So, in most years—even good years—we usually experience a period where the market declines. That could be what we're seeing right now.

Second, focusing on your long-term retirement goals is crucial. If this is money you're setting aside and investing for 10, 15, or 20-plus years down the road, and if you have a portfolio mix that aligns with that time horizon, then you might not need to do anything. Your allocation is probably appropriate. However, ensuring that your investments match your age and time horizon is key.

We strongly recommend reviewing your investments and making sure they are allocated appropriately. If this is money you'll need within the next five years or if you're planning to retire in the next five to seven years, then it's important to have enough cushion in your portfolio to protect the money you've accumulated.

The third key takeaway: time in the market matters.

Over the last 20 years, if you missed out on just the 20 best trading days, your account value would be 70% lower than if you had remained invested every single day—including those 20 days.

While it might feel like pulling money out of the market when it's declining and re-entering later is a good strategy, timing the market is incredibly difficult, if not impossible. You have to make two perfect decisions—when to exit and when to re-enter. Even seasoned investors who follow the markets daily struggle with this.

Remaining invested during these periods generally provides long-term appreciation and returns that surpass the results of trying to time the market.

Finally, it's important to focus on your specific financial picture. Review your accounts, ensure they are set up correctly, and avoid reacting emotionally to short-term impacts.

If you have questions about your specific retirement account, your overall financial situation, or if you want to learn more about what's happening in the markets and your investments, please feel free to reach out to us for a one-on-one coaching session.

We'll see you next time. Thanks!