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    Trump Tariffs

    I note the comments of Andrew Hauser, Deputy RNA Governor reported in The Guardian " It is ‘puzzling’ investors are not more concerned by tectonic economic shifts emanating from Washington." Further he " warns of Brexit-scale impact as Trump threatens 200% tariffs on foreign pharmaceuticals." A former senior executive at the Bank of England, Hauser compared the tariff push to the experience of Brexit, to explain how it can take years for the full impact of major shocks to become clear. “The day after Brexit happened, everyone thought the world would end, and it didn’t. But 10 years on, you’re seeing the profound effects of some of those changes for sustainable growth rates and for fundamental things in the economy.” Does MM share these concerns and if so, how should we position for what is to come?

    Answer

    Hi Angela,

    All of these comments have foundation, but the stock market is at all-time highs and any investor who exited during the tariff inspired sell-off in April is currently ruing the day. We often trot out the phrase “don’t fight the tape” and at the moment dips are a buying opportunity until further notice, markets look 6-months ahead, not 10-years. Even the Brexit example cited wouldn’t have helped investors:

    • The Brexit vote stunned the world in June 2016, and the FTSE plunged ~8%, hitting a low of 5788 as the news crossed the wires but here we are today and its over 50% higher, even after COVID and Trumps Liberation Day.

    Also, unlike BREXIT, Trumps Tariffs might not last a decade as his term as President will end in January 2029, and the incoming administration may reverse all/part of his p0licies it wouldn’t be the first time!

    • We position portfolios for the next 6-12 months and watch closely for any changes in our outlook.
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