Market Reaction to US Tariffs

In recent days, global markets have responded to the trade tariffs announced by US President Trump. Sectors reliant on international supply chains have borne the brunt of the initial reaction, impacting equity indices, but whilst this volatility can be unsettling, it is not unprecedented - so it’s important to place these events in a broader, longer-term context.

Historically, markets have weathered similar tariff-related disruptions, from the US China trade conflict of 2018-2019 to earlier episodes of protectionism. Initial market shocks were followed by recoveries, as policy paths clarified and businesses adjusted.

The broader economic implications of these tariffs are still evolving. Central banks, including the Federal Reserve and Bank of England, may adjust policy in response. Individual governments and trading blocs may pursue fiscal stimulus or trade negotiations. And market sentiment, which often prices in the worst-case scenario, will ultimately recalibrate.

The value of staying invested

In times like these, our message remains clear - stay focused on your long-term objectives and resist the urge to react impulsively to headlines and short-term noise.

For those invested in portfolios where the diversification and allocation of assets reflects their attitude to risk and their time horizon, this volatility represents a temporary dislocation, not a fundamental threat to their long-term financial goals.

A value driven investment opportunity

While markets have dipped in the short term, history shows that these moments create compelling buying opportunities.

It is exactly this approach that our asset management partner Morningstar - with its value driven investment philosophy - is adopting, with a disciplined, long-term view, drawing on its asset-allocation and risk profiling research delivered by more than 250 analysts worldwide.

History shows that equities in quality companies with strong fundamentals and sustainable competitive advantages - typically referred to as ‘wide moat’ businesses - are often well placed to navigate volatility and emerge stronger - and therefore represent a compelling opportunity to ‘buy the dip’, at a material discount.

“We invest based on the fundamentals of a company - their ability to innovate,
generate cash flow, and maintain competitive advantages over time.

Tariff-induced volatility may present opportunities to initiate or reinforce
positions in companies with strong, sustainable growth trajectories.” Morningstar- 4 April 2025

Volatility, while challenging, can be the price of opportunity. At Forth Capital, we will always act in your best interest and remain focused on ensuring that your assets and your portfolio continue to support your long-term goals.

If you would like to discuss your portfolio in relation to the prevailing volatility, or any other aspect of your financial planning, please don't hesitate to contact us, or email our Client Services Team to schedule a meeting.