Tariffs, Uncertainty, and Volatility: What Financial Moves Actually Make Sense Right Now
If you’ve paid attention to the news lately, you know the stock market has been on edge—most recently reacting to the Liberation Day tariffs announced last week. Big surprises like these tend to rattle markets. Why? Because markets hate uncertainty. And when uncertainty increases, so does volatility.
We saw this same pattern back in February and March 2020, as the world started coming to grips with COVID.
Uncertainty = Volatility.
And when markets get volatile (read: scary), our emotions kick in. Fear tells us to do something to regain control. Since we can’t control the markets or government policies, the easiest action often seems like going to cash. No investments = no volatility, right?
But here's the thing: going to cash also makes it incredibly hard to achieve your long-term goals. You can’t grow wealth sitting on the sidelines.
So—if you’re feeling the urge to do something with your money, here are some smart, constructive moves to consider instead:
1. Review Your Budget
Cash flow is the engine that powers your financial life. Knowing what’s coming in and going out each month gives you the clarity to make better decisions.
Tool tip: I like Monarch Money—it takes some upfront effort, but it’s really cool once you’re set up.
2. Build (or Rebuild) Your Emergency Fund
In uncertain times, cash is king. If you don’t have 3–6 months of expenses set aside, this should be priority number one.
Pro tip: Keep this in a high-yield savings account—not invested.
3. Consider a Roth Conversion
If 2025 will be a lower-income year, converting some of your traditional IRA to a Roth can be a smart tax move—especially if the market is down and your balances are lower than usual, you can move a larger percentage of your IRA to your Roth.
4. Look at Tax Loss Harvesting
Selling investments in a taxable account at a loss (and replacing them with a different investment) can reduce your tax bill today and in the future.
5. Or, Harvest Gains Instead
If you’re in a low tax bracket or want to reset the cost basis of an appreciated investment, you might intentionally sell for a gain, then repurchase the asset.
Yes, it triggers tax—but potentially at a lower rate than you’d pay later.
6. Exercise Employer Stock Options
If you have public company stock options and plan to hold the shares, now might be a great time to exercise while the price is down—resulting in a smaller tax bill on the spread.
Just be sure this aligns with your long-term strategy.
Final Thought:
Managing your finances—especially equity compensation—is complicated. Taxes, investment values, career goals, and personal risk tolerance all factor in. Don’t make knee-jerk decisions. And don’t go it alone.
Before making any moves, make sure they align with your long-term financial plan.