Trump Tariffs Cause Market Turmoil. What Should You Do? Beansprout Podcast EP1

What happened?

The past two weeks have been among the most volatile in recent market history. 

When Trump declared blanket tariffs on multiple countries, it sent shockwaves across global markets. 

This led to some REITs falling to multi-year lows, while the Singapore T-bill yield fell further. 

But just days later, markets rebounded when Trump announced a 90-day pause on most tariffs, excluding China. 

To help investors make sense of this rapid back-and-forth, we launched the very first episode of the Beansprout Podcast. 

We shared our personal reflections on what happened in the markets and what this means for long-term financial planning.

Here’s a quick recap of the key takeaways from our conversation. 

Transcript of Beansprout Podcast – Trump Tariffs Cause Market Turmoil - What Should You Do?

Summary of key points

• Inflation risks and economic slowdown are key concerns from the potential tariffs, with higher import costs potentially passed on to consumers.
• We are reassessing our portfolios based on time horizons and financial goals, rather than reacting emotionally to short-term news.
• Diversification remains essential, we’re considering exposure across different asset classes such as gold, bonds, and global equities.
• Having a clear investment strategy and emergency fund can help stay grounded during periods of uncertainty.
• Beyond financial planning, investing in personal well-being, health, and relationships can help create a more balanced and resilient life.

3:12 What triggered the sharp market swings this week?

Tariffs, uncertainty, and surprise policy moves fuelled extreme market volatility:

• Tariff shocks: Trump's April 2 announcement of sweeping tariffs triggered immediate risk-off sentiment. The STI fell 7.5% by April 7, one of its steepest drops in history.
• China’s retaliation: On April 5, China imposed a 34% tariff on US goods, escalating trade war fears and pressuring Asian markets further.
• Policy U-turn: On April 9, Trump announced a 90-day pause on most tariffs (excluding China), leading to a dramatic rebound. The S&P 500 saw its biggest one-day gain since 2008.
• Investor confusion: Mixed signals and sudden reversals added to investor anxiety, creating uncertainty around how to respond.

Market sentiment remains fragile, with investors unsure whether to deploy capital or stay on the sidelines.

9:20 How are investors reacting?

Our podcast hosts shared personal reflections on how they’re navigating the volatility:

• Julian admitted feeling emotionally shaken but is trying to stay focused on long-term goals: “I stopped checking my portfolio and focused on why I started investing in the first place.”
• Nicole noted the surreal nature of recent events but emphasised sticking to her investing plan: “I have screens showing live stock prices—but I only deploy cash when valuations make sense.”
• Gerald highlighted that while sharp drops aren’t new, the reactions tend to follow the same pattern: panic, followed by “Is this a buying opportunity?”

11:46 What helps investors stay calm?

• Have a clear investment strategy: Define your investing principles upfront, this provides clarity when markets are turbulent.
• Invest with purpose: Understand what each part of your portfolio is for (short, medium, long term).
• Stick to your goals: Matching time horizon to asset class helps you avoid panic decisions.
• Build an emergency fund: Ensures financial flexibility without having to sell investments prematurely.

14:00 What’s the economic impact of the tariffs?

• Inflation risk: Tariffs increase import costs. This raises prices for consumers, adding inflationary pressure.
• Slowing growth: Uncertainty around global supply chains and trade policy may cause businesses to delay investments and reduce spending.
• Decision paralysis: Multinational companies may pause expansion plans if tariffs change where it’s economical to manufacture.

17:20 What are tariffs and trade deficits?

• Tariff: A tax imposed on imported goods. Paid by the importing company (e.g., Apple) and often passed to consumers.
• Trade deficit: When a country imports more than it exports. Reducing deficits is often a political goal, but the broader economic implications are complex.

21:00 What should investors do in volatile markets?

• Reassess your portfolio: Are you overly concentrated in one market or asset class?
• Diversify: Don’t rely solely on US tech equities, consider gold, bonds, or Singapore REITs.
• Match risk to goals: Money you need in the next year should be in low-risk instruments like T-bills or high-yield savings.
• Use volatility wisely: Deploy cash tactically when valuations are attractive, but only if it aligns with your strategy.

25:00 What does a potential recession mean for consumers?

• Definition: Two consecutive quarters of negative growth.
• Real-world impact: Job losses, reduced spending, and slower business expansion.
• Behavioural change: People may delay big-ticket purchases or cut back on lifestyle expenses even before a recession hits.

29:00 How to build a secondary income stream

• Portfolio income: T-bills, dividend stocks, and SSBs can provide regular passive income.
• Side income: Freelancing or part-time work can supplement income if job uncertainty looms.
• Lifestyle alignment: Design your financial life around what you want. Read more on how Ken Tan is aligning his investment strategy with his life goals. 

33:00 Final Takeaways

• Julian: “This was a wake-up call. I’m relooking at my goals and realigning my portfolio.”
• Nicole: “Let go of what you can’t control—focus on what you can: your plan, your strategy, your habits.”
• Gerald: “Treat this volatility as a tuition fee. Learn from it and come out with more clarity.”

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