How'd we get here? Are Tarrifs the real issue

Derrick Alexander |

In 2020, $814 billion was injected into the U.S. economy. Surprisingly, COVID didn’t take out as many companies as initially expected. As a result, there was a significant amount of dry powder (cash) ready to be invested.

When the government steps in and “saves the day” by printing money, it’s essentially issuing an IOU to the future. At some point, those dollars must be accounted for. The consequences? Higher interest rates, inflation, and potential tax increases—all common byproducts of aggressive monetary policy.

At the time, printing and distributing stimulus checks may have seemed like a necessary move—and in many ways, it was. But our economy was already poised to slow, and the injection of cash only delayed that process.

Post-2020, a portion of that stimulus money flowed back into the markets, fueling an incredible run of growth and returns. However, when money is freely available and aggressively invested, things can become inflated. Over time, as easy money dries up, only those companies delivering real value and returns will remain standing.

Now, we add a new factor to the mix: tariffs. This could be yet another reason for consumers and investors to pull back. Interest rates and inflation were already present—and now, it seems they may stick around longer than expected. The recent tariff conversations may simply be accelerating the timeline of market adjustments.

What Should You consider now?

With these dynamics in play, this could be an ideal time to reassess your portfolio:

  • If you’re nearing retirement, Consider shifting from a passive investment strategy to a more tactical, actively managed approach.
  • If you’re 20+ years from retirement: This could be a buying opportunity—a time to lean into the market while prices are adjusting.

But most importantly, ask yourself:
If this series of events were to happen again, what would I want to happen with my money? What’s most important to me?

If you're unsure or want to explore your options, I'm here to help. Let’s ensure your current strategy aligns with your goals in this new environment. To navigate this decision, contact us by clicking here. 

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A good article to read about how people used their stimulus money. Click Here