Speaker 1: Hi, I'm Stacey Hyden.
I'm here with another episode of Better Financial Health in 15
Minutes or Less, and today I would like to kind of talk about
some stuff that's been in the headlines, particularly around
tariffs and the Department of Governmental Efficiency, or DOGE
.
I think those two things have been the drivers behind a lot of
the market turmoil over the last couple of weeks, because no
one really knows what tariffs are, prices to consumers, which
is a little concerning because prices are already high.
The good news is today, that's March 12th, the inflation
numbers came out slightly lower than expected.
Now, by slight I mean slight 2.8% versus 2.9% on an
annualized basis, but at least they are going in the right
direction.
But you can be forgiven for not knowing whether there's going
to be 10% tariffs, 25% tariffs, 50% tariffs, because it does
seem to be changing on a day-to-day basis, which can make
it really hard to plan.
But I think the key thing I would say is, if you have a need
for a new car, might be not be a bad idea to go ahead and start
shopping the ones that are already on the lots, because
while there was a deferral of those tariffs on automobiles,
one thing is certain the supply chain between, particularly,
mexico, the US and Canada.
It is very tightly wound.
So even items that are quote unquote made in the USA have
parts in them that are sourced from Mexico, other parts in
South America, Canada or even across the world.
And that's what really makes trying to figure out exactly
what the impact these tariffs are going to have come to be.
Also, some companies have their supply chain and they're
arranging for their supply of inputs to their manufacturing
process.
They arranged to buy those a year ago, two years ago, and
even if they wanted to bring that back on shore, which many
companies did after COVID, they moved a lot more stuff here
because we had all the trouble with stuff getting to the US and
through customs and through the ports, through COVID.
It still takes time to train people, build out those
production lines, build out those production lines and get
everything transferred.
Even if they're going to just transfer from one plant to
another, that still takes a lot of time, energy and coordination
.
So we just don't know.
I think it is somewhat positive that a lot of the harsher
tariffs have been kind of walked back.
I think that they've been used as more of a negotiating tactic,
but we're just going to have to stay tuned.
That being said, I don't think you should be making any major
changes to your portfolio based on this.
You very well could go one way and it turns out to be
completely something else.
So I think, as long as your portfolio is globally
diversified meaning it has US stocks, both small and large, it
has international stocks, it has some safer things, whether
that be money market or fixed income I think you should just
let it be because, for example, this year, international stocks
developed international.
They're up significantly more than US stocks.
That has not been the case for quite some time and that's
probably not what people would have expected if we were going
to be charging these other countries and their domiciled
companies higher tariffs, but in fact, that has been the case,
and part of that, I think, is just because international
markets have not done as well over the past several years as
US markets.
But it's something to keep an eye on and it's the reason for
spreading out your investments.
The other is the Department of Governmental Efficiency, and
while the idea of a more efficient government is hugely
appealing to me, I'm a little concerned, like a lot of people
are, that it's being done with a machete instead of a scalpel.
My hope is that as they get further into this, they slow
down and look at the impacts, because there are some things
that have unintended consequences.
That's always been my personal take with a lot of the things
that government does is it sounds great on the surface, but
when you start peeling back the layers and see that oh yes,
this part of the Department of Education also impacts this with
food and nutrition for underserved kids.
Well, we have to be careful with that and make sure that, if
we're cutting here, that those hungry kids are still going to
get the food that they need to eat, because they are not the
bad guys here.
They are our future and we need to make sure they're there.
So I don't know how all this is going to play out.
I'm watching it, I'm reading the news, just like everybody
else.
I think if you are inclined to reach out to your congressmen
and senators, that's always a good thing, because I do think
that they listen, because, rightly or wrongly, many of them
are career politicians, and so what they want to do is get
reelected, and so if you let your voice be known, oftentimes
the squeaky wheel does get the grease, and I think that we can
accomplish a lot through that.
But remember, in your personal relationships, try to resist the
urge to paint someone whose views are different than yours
is all bad or say that you can't have a relationship with them,
because that's how we continue to get divided.
We need to have these conversations.
We need to listen to our friends, our co-workers, hear
their opinions, maybe learn something and then go from there
, because my strongest belief is that 80 plus percent of
Americans are somewhere in the middle.
You may tilt a little right, you may tilt a little left, but
at the end of the day, you're really more worried about taking
care of your immediate needs and your family and your close
friends and your community.
And so I think we need to remember, as we go into the
Lenten season, that really to remember how we treat others and
to be kind because we don't know where people are coming
from or how they arrived at their views and have those
conversations with and go into them with an expectation that
they're doing the best they can with what they have and
hopefully they'll extend you the same grace and we'll all get
through this craziness together.
Thanks for tuning in.
This has been another episode of Better Financial Health in 15
Minutes or Less.