The stock market is jittery right now for a number of reasons, but one primary cause is uncertainty over how tariffs, or the threat of tariffs, between the U.S. and major trading partners, China and Mexico, will play out in the markets.
The Two Front Trade War
In a note to clients on June 3, Lori Calvasina, Head of U.S. Equity Strategy for RBC Capital, said the “two front trade war” could send domestic equity markets into correction territory. For now, President Trump has agreed to suspend the round of tariffs on Mexican goods unless the country did more to limit the flow of immigrants into the U.S. However, the impact of the trade wars has been felt triggering considerable market volatility in recent weeks.
A Clear Path
How the trade wars will end and what the ultimate economic fallout will be is unknown, but what is undeniable is the uncertainty it’s causing both on Wall Street and on Main Street.
At Beacon, we believe this uncertainty over the markets offers a great opportunity for our advisors to help calm investor fears and provide a clear path for investment decisions through Beacon’s portfolios, which are built to handle the kind of volatility that we’re seeing in today’s markets.
Many of your clients are at a phase in their lives where they want to start withdrawing money or at least they’re at a place where they’re no longer putting money into the markets—and market volatility is shaking up their economic viability.
A Safety Net
What investors need is a safety net. They need the security of a scientific approach; one that is not predicated on chasing the latest trend or whatever IPO is leading the headlines on a given day. They need an investment strategy that offers them protection through equal sector allocations to help guard against being too heavily weighted in any single sector.
Your investors also need protection against the possibility of a catastrophic drop in the market. What if, for instance, RBC Capital’s Calvasina is accurate about her prediction of a looming correction? You will want your clients protected with the safety net of a stop-loss trigger that will keep protect from losses before they create irreversible damage.
Tools and Checklists
At Beacon, in addition to the portfolios we’ve designed to handle market volatility and uncertain times, we’ve also developed tools and checklists to help advisors educate their clients about volatility and our investment strategies. If you would like to learn more about the tools and strategies we’ve designed, contact your wholesaler today!