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A Volatile Week For Markets

8 Apr 25

President Trump’s economic tariffs announced on Thursday has set in motion an extraordinary week for the global economy.

At the time of writing (4th April 2025), it is fair to say the global community is still grappling with the longer-term consequences. Longer term is the key phrase here – there are no surprises that we are seeing immediate market volatility as the markets hate unknowns.

Whilst this is no doubt an uncomfortable period, history shows there are always winners and losers. Markets typically recover and they continue to offer long-term opportunities for wealth creation. Think the Covid pandemic as a very recent extreme example to that point.

What’s has happened?

The US announced a series of tariff increases, which exceeded market expectations and raised effective US tariff rates to their highest level since the 1930s
This policy announcement worsens the near-term growth/inflation trade-off, increasing the risks to both economic activity and price stability in the short term
Probability of a US recession was also increased
This kind of strong opening move is characteristic of Trump’s negotiation style — often starting aggressively before shifting stance — so we expect market volatility in the days ahead. The new tariffs are scheduled to come into effect on April 5th (universal baseline tariffs) and April 9th (additional reciprocal tariffs)

Market reaction

Markets have responded negatively in the short term:

Equities have declined as risk appetite has weakened
Government bonds have rallied, reflecting a move into safe-haven assets
The US dollar has weakened, particularly against the pound and euro

Our investment principles

As Finura monitor events closely we, and the investment teams with whom we work, will always stick by certain principals:

Avoid knee-jerk reactions to unpredictable or binary events
Construct portfolios based on long-term fundamentals, the economic cycle, and detailed risk scenario analysis. This disciplined approach helps us stay focused on delivering long-term outcomes for our clients, even through periods of volatility

A personal and diversified approach

Your Finura planner will have crafted an individual plan that factored your investment goals, risk appetite and comfort with volatility over the medium term. Rarely is making an immediate change to investment strategy the best idea. In addition, you will have a diversified portfolio, balancing growth assets such as equities with more defensive holdings like bonds and often alternatives such as gold.

We will continue to monitor any developments closely and reach out if we feel a change of course is in your long term interests. We are of course here to speak any time and, as such, do feel free to contact your Financial Planner to talk through anything in more detail.

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