3 Steps What Investors Need to Know when Markets Are Shifting

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Introduction

Last Friday, the NASDAQ Composite Index officially entered bear market territory—down nearly 23% from its peak.

The trigger? The Trump administration introduced a fresh wave of U.S. tariffs. These moves have rattled the markets and investors, raising more questions than answers.

Yes, we could dive into the technical details: how “reciprocal” tariffs don’t quite match up with reality, or why some industries like pharmaceuticals and semiconductors are being spared, at least for now. We could even debate the fairness of a flat 10% tariff on imports from places like Singapore.

But here’s the bottom line: with policy shifts coming fast—and sometimes without warning—no one knows what’s next. What’s true today could be irrelevant tomorrow.

What is clear, though, is this: the global economy isn’t celebrating. It’s navigating uncertainty. And for investors, this is a time to stay alert, stay informed, and look for opportunities in the chaos.

Uncertainty Reigns - But Here’s What We Do Know

In volatile times, it helps to break things down:

1. So—what do we know right now?

First, countries across Asia are taking very different approaches to the rising trade tensions with the U.S. Malaysia, Indonesia, and Taiwan have opted not to impose retaliatory tariffs, choosing caution over escalation. Vietnam is actively negotiating with the Trump administration, while Cambodia has gone a step further—lowering its tariffs on U.S. goods to gain favour and potentially secure better trade terms.

In contrast, China is pushing back hard, responding with its heavy tariffs in a direct counter to U.S. measures.

Consider this: according to The Wall Street Journal, an Apple iPhone 16 Pro (256GB) could see its price jump by as much as USD 300—driven purely by import duties. That cost will trickle down somewhere—and it won’t be painless.

What comes next?
We’re about to find out.
But one thing is clear: the ripple effects are only beginning, and for investors, staying ahead of the curve is no longer optional—it’s essential.

2. The Known Unknowns: What’s Unfolding - But Still Unclear

While we have a handle on the current landscape, there are still major unanswered questions ahead—especially for companies like Apple.

There are a few ways this could play out:

• Apple could pass the full cost increase on to consumers, meaning the iPhone 16 Pro could become significantly more expensive. But there’s a limit to what customers are willing to pay—even for Apple’s premium products. Higher prices could soften demand, potentially dragging down unit sales.

• Alternatively, Apple might choose to absorb the additional tariff costs. But that would directly hit profit margins. And for a company that’s long prized its operational efficiency and high margins, that’s a tough pill to swallow.

• If Apple chooses to defend its margins, it may be forced to cut costs elsewhere—and that could mean layoffs, downsizing, or pulling back on research and development.

None of these are attractive outcomes. But one of them is likely to unfold. We just don’t know which path Apple will take—or how markets will react when they do.

At the same time, we’re also navigating macro-level uncertainty:

• The U.S. Federal Reserve has acknowledged that tariffs will likely push inflation higher and slow economic growth. That’s a clear warning sign for investors.

• But Fed Chair Jerome Powell hasn’t committed to lowering interest rates—or even hinted at when or how much rates might be cut if economic conditions worsen.

3. Get Smart: Knowing What You Don’t Know

And then, there are the unknown unknowns—the wild cards.
The things we don’t even realize we don’t know… yet.

By definition, we can’t predict them. We can’t prepare for them directly. But we can prepare ourselves—mentally, strategically, and financially—for how to respond when the unexpected arrives.

Here’s what we do know:
Panic selling is never the smart move.
It may offer a fleeting sense of relief—but as Christine Benz of Morningstar wisely puts it, that relief is often quickly replaced by a far more uncomfortable question:
“When do I get back in?”

And worrying about what we can’t control? That’s not productive either.
It doesn’t help your portfolio—it just adds wrinkles to your forehead.

So What Key Takeaways for Investors

1. Volatility Is the New Normal
   With the NASDAQ down over 20%, we’re in bear market territory for the third time in five years. That’s a clear sign that fast-moving markets are here to stay.

2. Tariffs Are Driving the Turbulence
   Trade tensions, especially from new U.S. tariffs, are rattling global markets. Expect continued swings as these policies evolve—sometimes overnight.

3. Some Sectors May Offer Shelter
   Not all industries are affected equally. Pharmaceuticals, semiconductors, and other sectors currently exempt from tariffs may see less volatility—or even opportunity.

4. Policy Risk Is Real—and Fast-Moving
   Unpredictable shifts in leadership and policy can move markets in hours, not months. Stay informed, but resist emotional decision-making.

5. Cash Isn’t a Strategy—It’s a Tool
   Holding cash can give you the flexibility to seize opportunities when stocks become undervalued.

Action Steps You Can Take Right Now

1. Review Your Portfolio Allocation
   Ensure your investments align with your risk tolerance and long-term goals.

2. Focus on Quality
   Prioritize companies with strong balance sheets, consistent earnings, and competitive advantages.

3. Think Long-Term, Act Short-Term Smart
   Use downturns to your advantage, but stay focused on the big picture.

4. Stay Informed—But Don’t Overreact
   Monitor reliable news, but don’t make knee-jerk decisions.

5. Consider Dollar-Cost Averaging (DCA)
   Continue investing steadily to reduce the impact of market volatility over time.

In uncertainty lies opportunity. Stay sharp, stay focused, and keep your eyes on the long game.

Happy Investing!!