Well. By now we can all see the impacts of the tariff announcements. We’re potentially on the verge of a significant and long lasting shift in the global trade system we’ve constructed for over 40 years. I won’t rail against the tariffs again. I think I’ve made my position and outlook on that pretty clear and the market appears to agree with my negative view of them. But I won’t spend more time on that. Instead, I want to write a message, hopefully a calming message, about how to process moments like this.

This market and economy is going to scare a lot of people. That’s a story as old as time in markets. This isn’t new. And remember – volatility/uncertainty is the price of admission to the stock market. Without some short term pain there cannot be long term gains. Of course, that’s easier said than done and in moments like this we tend to want to act, to take control of things that appear to be spiraling out of control. So, what should you do (or not do) in environments like this?

1) Revisit your financial plan (or create one now – it’s not too late). If you absolutely must raise cash then don’t go all in. Move about 2 years of expenses to Tbills or cash equivalents. Enough to weather an economic hurricane if it should arrive. You never want to play the all-in and all-out game. Leave that for gamblers. Trust me, even if you time the exit right you’ll likely fail to time the re-entry right and that will cost you more in the long-run than any near-term certainty you get from moving all out.

2) This is a good time to make sure you have an estate plan. Review or establish trust, will and life insurance. Get your financial house in order. Talk to me if you want help with this.

3) Tax loss harvest. Consider swapping those super high risk concentrated positions into similar, but more diversified allocations. This is a great time to review your overall allocation and consider some rebalancing if you’re starting to get out of balance.

4) If you are lucky to have excess cash consider dollar cost averaging into stocks.

5) Try to think long term. Regular readers know I think in specific time horizons for financial planning purposes using the Defined Duration process. The whole purpose of this strategy is to compartmentalize your assets relative to your expected expenses and liabilities. This will help you increase certainty. I know it works because I am seeing it work in real-time. People love this approach when it’s done right.

Make sure you treat your stocks as long term assets (15+ years minimum!). Don’t treat them like 15 month instruments!

6) Stay the course (if you can). If you have a good plan in place then environments like this should be irrelevant. If you feel tempted to make big shifts it probably means your risk profile is off. You might want to consider fixing that before it keeps you up at night.

7) Talk about it. If you’re sitting on stressful losses or volatile positions talk about it. Own the mistake. Get advice and opinions. Don’t bottle it up and let it eat at you.

8) Put your head down and do the work. Staring at your account and watching financial TV won’t change the market or your portfolio outcome. Get to work doing what you do for a living. Focus, add value, ignore the things you can’t control and focus on controlling the things you can. If you’re retired then focus on your hobbies.

9) Go do leg day. I’m serious. Go for a run, walk or bike ride. Live in a squat rack like I do. Get your mind off the craziness.

Good luck out there. And as always, be disciplined!