Trump Trade War 2.0
The market has flipped incredibly quickly as we start the second quarter of 2025 with April 2nd being the infamous “Liberation Day” on the full implementation of tariffs.
Frankly, it’s made it challenging to write this newsletter because every time we start writing on the topic, something changes. A quick timeline of the tariff actions so far can be outlined in this link below:
As you can see, there has been constant change in policy, which is why the market is reacting the way it is. As Jerome Powell said in an interview at the Economic Club of Chicago on Wednesday, April 16th "Markets are struggling with a lot of uncertainty and that means volatility. But having said that, markets are functioning...they're orderly and they're functioning just as you would expect them to function."
Since we know that the only constant in the market is change, the rate of change can be challenging. When the result is a downward trend, we know this can create anxiousness and nervousness in our clients, which is why we always encourage our clients to reach out if they have a specific question around their personal situation. However here are some of the topics we are generally talking about with clients today, and some may apply to you.
1. Diversification has helped this year, so most of our managed accounts are down less than the S&P 500, serving its purpose. So at this point, many times it’s not as “bad” as many think.
2. We always recommend holding cash for needs 6 months and beyond. So short-term swings in the market, even larger ones, shouldn’t impact your immediate cash flow needs.
3. Tax loss harvestings become a focus point again. With the market down year to date, some stocks or investments have a loss. Losses can be used to offset the gains you realize this year and any losses you had on investments held longer than a year that are not offset by gains can be carried forward in future years. This is helpful for tax planning purposes to reduce your potential impact on investments.
4. Uncertainty in the market is the norm, and it’s something you cannot control. Focus on the things you can control. Your spending, how much cash you should keep on hand and review how much risk you are taking are all good places to start in a volatile environment.
Tax Review Opportunities
Now that we are beyond tax season many of our clients are receiving their tax returns back from their CPAs and tax preparers and this is a perfect time to review your current tax situation. In some ways we have more control over your taxes, unlike the market. So if we can make your portfolio as tax efficient as we can, you’ll put yourself in a strong position for the future. A review of your tax return can identify opportunities to reduce your income tax liability in 2025, avoid penalties or use up lower tax brackets, setting yourself up for a better tax picture in the future.
Tax return reviews have become a part of our annual review process and if you would like one done, please upload your tax return to the Baird Online Document Exchange.
Congratulations to Curt and Rick for their continued recognition on the Forbes Best in State Wealth Advisor award!
**2025 FORBES Best-In State Wealth Advisors. Published 4/8/25, rankings based on data as of 6/30/24**
Educating and Sharing Baird’s Content
Baird has created so much content for you, it’s tough to keep track. We do want to highlight some of the locations for great timely pieces. Here are a few spots through Baird and other locations you can find great content about the markets, financial planning trends and other topics.
- Our Team’s Newsletter - our team’s quarterly write up on timely topics, personal thoughts on the market and team updates.
- Baird Wealth.com - main website for Baird Private Wealth Management educational items, wealth planning strategies and market updates.
- Baird Market Insights – various videos, commentary and market strategy from Baird’s Investment Strategists.
- Third party Podcasts – one of the benefits of podcasts is you can get information directly from the source on a variety of topics. These are a few I’d recommend:
- All-In; with Chamath, Jason, Sacks, & Friedberg - All In Podcast
- Invested: Advancing Women & Wealth - Invested
- The Important Part: Investing with Liz Thomas - The Important Part