Tariffs Broke My Portfolio

Biggest news the past week, I know. But what a lot of people are concerned with is not the “new global order” or how it will play out in the long term or how this will likely disproportionately impact those who are already disadvantaged.

I too know, there are more direct and tangible concerns like whether you can afford wanton mee or pasta, or a car, or a HDB flat. The thing is, these world events will inevitable impact these too, just a matter of when and how.

Headline: Stocks Market

This is the headline news these few weeks. And more eye-catching especially to young people with unprecedented access to stocks market, including international exchanges. Never in the history of the world is this so easily accessible, even to someone with minimal knowledge of how it works. Even teenagers these days have their "life savings" invested in the stocks market.

There are many articles and adages online that covers "what to do now". Time in the market beats timing the market. HODL. Continue to DCA. It will recover. Good time to buy in, buy the dip. Stay invested. They all have different, albeit somewhat similar, conclusions coming from different points of view.

Know your own situation and priorities, and use this uncertainty and fear to your advantage. And no – I don't mean put your entire life savings to buy the dip.

I mean more of: this episode tests your risk tolerance. It is easy to say "I will be fine if my portfolio value drops 50%, I can hold", it is another to actually live through it. This is a good time to actually assess your own limits.

If you are investing for long term, stay calm and continue focusing on fundamentals. It is easy to know and remember this, but much harder to actually do it. In life, there is no free lunch. And in investing, diversification is the arguably the only "free lunch" you can get.

Investments are long-term.

Get your priorities right. If you are trading to hopefully profit from the market swings, it’s not much different from gambling.

Instead, use this opportunity to reflect on your risk tolerance based on your current life situation and, if necessary, rebalance based on that. At the end of the day, it is true that sustainability and consistency, i.e. "holding power", will get you there. In 10-20 years. Not next month, not next year. The best investment is one that you can hold on to for your planned horizon, no matter the ups and downs.

So how now?

Focus on what you can control.

As cliche as it sounds, build up your savings, if you haven't. Review your expenses, if necessary. Upgrade your skills and be ready for new opportunities. If you haven't read my previous article on savings, I view investments to be separate from "savings". And if you have read it, then you know that with adequate savings and buffer, you can point your middle finger at the current situation and carry on. (If you think about it, that is what this tariff situation is all about; not that I condone it)

Know your risk tolerance, and avoid panic buying or selling. You can't control the ups and downs and the whims and fancies of the world. But you can control how you respond to them.

But also beyond that.

Be a good friend, a good neighbour, a good citizen. Don’t think “why should I be giving to you if you cannot give anything back to me”. Sometimes it takes more than a couple of hops before somehow kindness goes around and comes back to you. Better still, be good without expecting something in return to begin with.

Support your friends and families, and even strangers you meet. Be fair to your employees, your colleagues, your business partners, your customers. There are others who are likely to be more badly impacted by this than you.

That’s how a community survives, that’s how a society flourishes, and that’s how the whole world thrives.

And if it comes a time when all your investments (assuming you are not, in fact, gambling) evaporated into thin air, then we have a bigger problem than that. When it comes down to that, perhaps growing food with your neighbours is the only way to survive.

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