Current news of tariffs and trade disputes has added volatility to the financial markets due to the uncertainty it creates but likely will have little impact on long-term investors, according to analysts with GuideStone Financial Resources.
Despite initial concerns that the moves could hamper growth, global markets have generally continued to trade in a narrow range while investors evaluate other, likely more impactful, near-term economic developments.
Regardless of the economic news, GuideStone encourages long-term retirement investors to focus on their long-term objectives and not short-term headlines and social media posts.
“Sensationalist headlines meant to garner investors’ attention, such as Harley-Davidson moving some motorcycle production overseas, merely serve as a distraction to a long-term investment plan,” said David Spika, chief strategic investment officer for the Southern Baptist financial services entity.
“While these headlines increase volatility to the markets in the short term as investors seek to react for better or worse to such news, history shows that long-term investors who don’t try to time the market and its cycles are rewarded.”
The Trump administration has positioned the tariffs imposed or proposed against China, Canada, the European Union and other nations’ goods as an opportunity to address trade imbalances between the United States and other countries. Critics have contended that tariffs do more harm than good to American workers. Ultimately, though, the president is remaining true to one of his key campaign promises.
“The expectation from a data perspective,” Spika said, “is that the negative economic effects from the current and proposed tariffs are generally modest, as such tariffs are likely to have a minimal long-term impact on gross domestic product [GDP], especially when considering the broadly positive impact of the tax cuts.
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Source: Baptist Press