US tariffs: Staying focused on the long term

This week’s far-reaching US tariff announcement caused stock markets to fall. But the experts at Coutts behind your investments with us still see signs of solid economic growth that they expect to support markets over time.   

Reasons behind their thinking include:

Strong wage growth and employment numbers in the US. This should help mitigate any negative impact of President Trump’s tariffs on prices and see consumers continue to spend their money, helping the economy.

We could see US tax cuts and de-regulation. President Trump’s tariff policies were always going to be the most difficult for markets. But Congress is also working on a package of measures which includes personal and corporate tax cuts, and that could potentially support markets later this year.

Fahad Kamal, Chief Investment Officer at Coutts, says: “We’re going to see more market volatility for now. But overall, both US household and company balance sheets are robust. They’ll be affected by these tariffs and current uncertainty, but we think they’re well-equipped to absorb the changes.”

He adds: “While periods of market volatility can be uncomfortable, we believe it’s important to stay focused on the long term. If you’re in it for the long run, you could achieve your investment goals for the future.”

Diversification can be key for these more challenging times in markets, and Coutts diversifies its investments in a number of ways.

Stocks and bonds: Stocks and bonds tend to move in different directions – while one goes up, the other goes down. Coutts therefore invests in government bonds to help provide some ballast should stock markets fall.

Regions and sectors: Coutts takes a global approach to its stock holdings, investing across a wide range of regions and sectors to help mitigate risks.