Overpreparation Trumps Prophecy

SGH Wealth Management’s “Read What I’m Reading” Mar. 2025 | Mar. 13th, 2025

The emotional price of unpreparedness is far greater than the effort of overpreparation and in a time of unprecedented restructuring in federal government, its easy to get swept away in the emotions of investing.

The problem is that nobody knows what the outcome of this will be, maybe not even those in charge. Companies operate, at least nominally independent of the government, and are only tangentially affected by the chaos in Washington. The tariffs are going to disrupt delicate supply chains, but manufacturers have had months to figure out how to cope. The abrupt ending of the USAID program will cut an important market for farmers, and the retaliatory tariffs from China will reinforce that impact. But this might lead to more food dumped on the U.S. market at fire sale prices, lowering that aspect of the consumer price index.

Additionally, roughly 66% of the economy is service based while 34% is goods based, not all of which crosses borders. Making this more contained than the news headlines might suggest.

Point being is that complex situations have complex counter-reactions, not all of which are bad. Every election produces sounds of alarm from the party that was driven out of office, and in the end, the impact on the markets has been small. That doesn’t mean that there won’t be volatility, as people respond to uncertainty with the usual levels of alarm.

The human race’s inability to predict the future doesn’t mean we are powerless. The benefits of overpreparation are manifold. It reduces stress and anxiety, knowing you’re equipped to handle whatever comes your way. It fosters confidence, knowing you have the resources and skills to navigate challenges. And it allows you to capitalize on unforeseen opportunities, because you’re not scrambling to react, but ready to act.

*See ME Live on CBS talking Tariffs & Your 401k in the top link below: