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We agree that there’s danger in talking religion or politics with existing and prospective clients. Yet, we do feel strongly about the importance of being a student of today’s political crosscurrents and discourse in an apolitical fashion by way of a thesis—a timely, pithy sound bite that connects the dots to the advice you provide.
Given the market activity on February 3 because of the signing of an executive order imposing substantial new tariffs on Mexico, Canada and China, the latest issue of The BEAT was quite prophetic with their view:
- “As we see it, President Trump will pay close attention to market reactions, particularly within equities, and might adjust his rhetoric accordingly. As such, much like how some think about a Fed-put, we should also think about a Trump-put.”
The sharp market reversal on February 3 was seemingly in direct response to an announcement from the White House delaying tariffs for Mexico and Canada. Considerations about a Trump-put aren’t partisan thoughts, they’re you acting on behalf of your clients’ best interest to develop your views about what may lie ahead. Was the volatile market action of February 3, 2025, a snapshot preview of the next four years?
How should a Trump-put influence your advice to clients? For some perspective, we turned to three contributing thought leaders of The BEAT.
- “Similar to the term Fed-put, which refers to an option the Fed has to cut interest rates to support market prices, we coined the phrase ‘Trump-put’. In the case of President Trump, he has the option to support markets by toning down his rhetoric on tariffs in the event it causes volatility.”
- Jim Caron, Chief Investment Officer, Portfolio Solutions Group
- “On the surface, US companies heavily dependent on manufacturing from Mexico, Canada and China would be hurt by a heavy round of tariffs. Except in the stock market, those companies aren’t performing that way, in aggregate. We think the market has figured out that, in the end, President Trump doesn’t want to harm US companies or the equity market.”
- Andrew Slimmon, Head of Applied Equity Advisors Team
- “Markets have been preparing for such tariff headlines since the US election and it’s getting clearer that Tariffs 2.0 will be used by the Trump administration for policies beyond just trade, like immigration, national security or foreign policies. Markets could remain volatile, which also offers opportunity. The truth will lie somewhere in the middle rather than the extreme numbers and fear psychosis being created by the slew of announcements across countries.”
- Jitania Kandhari, Deputy CIO, Solutions & Multi Asset Group; Head of Macro & Thematic Research, Emerging Markets Portfolio Manager
Bottom line: Share your thesis, not your opinion, to help reinforce existing and prospective clients’ conviction in you. Be on top of this fast-changing world and the potential implications to investment portfolios and financial planning.
We do feel strongly about the importance of being a student of today’s political crosscurrents and discourse in an apolitical fashion by way of a thesis—a timely, pithy sound bite that connects the dots to the advice you provide.
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