April 3, 2025
Dear Clients,
We are reaching out regarding today’s market reaction to yesterday’s tariff announcements. While the size of the proposed tariffs was notable for being at the high end of market expectations, the direction aligns with our anticipation for volatility, and we feel prepared. As with previous periods of policy-driven volatility, we want to share our perspective.
Our View on Today’s News
The tariff announcement represents the opening move in what we anticipate will be a dynamic negotiation process, not a final policy outcome. Markets are reacting to both the announcement and the uncertainty around its evolution, compounded by concerns about already elevated market valuations.
Impact on Fundamentals
While earnings across specific sectors will face pressure in the near term, our view is that underlying market fundamentals remain sound. This distinction is crucial—we’re experiencing policy uncertainty, not economic deterioration. However, a slowdown in the economy cannot be ruled out, and we are actively preparing for such a scenario.
Our Approach
Periods of heightened volatility often create opportunities. As broad market selling occurs, strong companies with robust business models can become unfairly punished and mispriced. Our team is actively monitoring these developments to identify potential entry points for high-quality investments at attractive valuations while also assessing risks in current client holdings. We have been proactively positioning client portfolios more defensively over the last 12-18 months in anticipation of a market rotation. During the previous several weeks of market volatility, this approach has been to the benefit of most clients relative to the broader market’s performance.
We remain focused on our disciplined investment approach, which has allowed us to help clients navigate periods of uncertainty over the past few decades. As always, we’re available to discuss your specific portfolio or concerns. Please reach out if you would like to speak with your advisory team.
With warm regards,
The Team at Obermeyer Wealth
