If Tariffs Sink the Market, Here’s What Lifts It Back

If Tariffs Sink the Market, Here’s What Lifts It Back

For many Americans, it seems like we’re in the middle of an economic crisis.

And I can’t blame them…

On April 2, President Trump announced the most sweeping tariff package in history. And it sent a shockwave through global markets.

The administration imposed a universal 10% tariff on nearly every U.S. trading partner starting April 5. And reciprocal tariffs of up to nearly 50% starting April 9.

Since President Trump announced the tariffs, the S&P 500 and Nasdaq both have been down as much as 8% as of this writing.

I’m actually surprised they haven’t gone much lower.

After China announced retaliatory tariffs against the United States, I thought we’d see another Black Monday, when $1.7 trillion was vaporized on one day in October 1987.

I know it’s hard not to feel fear and uncertainty in times like these. But my primary message to you is this: Don’t panic. We’ve been through this before.

If you were around in 1990, you remember the first Gulf War.

At the time – in terms of global impact – the economic effects of Iraq’s invasion of Kuwait were more severe than what we’re seeing with Russia and Ukraine.

Oil prices doubled virtually overnight. Interest rates were around 9%. And about a year later, the unemployment rate was nearly double what it is today.

We were still feeling the effects of the Savings and Loan (S&L) Crisis that would end up costing taxpayers over $1 trillion. If you adjust for inflation, that’s over $2.4 trillion in today’s money.

Just like now, it was painful being an investor in 1990. I know because I was a young executive on Wall Street at the time.

We saw the market crash 20% from its July 1990 high to its October 1990 low. Talk about pain.

I know 1990 seems like a long time ago to many people. But since then, we have seen innumerable busts and panics.

• Right before the 1990 market crash, we had the Junk Bond crash of 1989. The S&L Crisis of the late 1980s also bled well into the early ’90s.

• We had a recession in 1990-1991… The 1994-1995 bond bear market that flattened tech stocks… The 1998 Asia Crisis and Long-Term Capital Management hedge fund blowup.

• Of course, we had the dotcom bubble burst in 2000, the Great Financial Crisis in 2008, and the COVID-19 pandemic in 2020… Which was followed by the most aggressive set of Fed rate hikes in history in 2021 that went on to destroy the price of bitcoin and tech stocks.

• That was followed by the Ukraine War in 2022 and the regional banking crisis of March 2023.

And yet, amid all that uncertainty, great assets resumed going higher after the uncertainty cleared. Since 1990, the S&P 500 is up 1,377%. The Nasdaq is up 7,716%. And since the lows of 2022, bitcoin is up 417%.

Living through all that volatility has taught me great assets always come back. So, you must hold onto your great assets and add to them during a crisis.

That’s why when the proverbial spaghetti hits the fan, instead of hiding, I look for opportunity. And you should, too. Because that’s how you get really rich.

Cranking Up the Money Printers