Tariffs, recession concerns, inflation, and geopolitics are a few examples of the many disruptive forces that the market—and by extension, your personal finances—may face. This time around it happens to be tariffs that are dominating the headlines. But disruption could come from any direction. It could come from relatively predictable federal interest rate movements, or unexpected events like the Covid pandemic or one of the world’s biggest ships blocking global trade through the Suez Canal for a week.

History can give us a clue as to us how events like these have shaken out in the past. But past performance is not indicative of future results, as the SEC likes to remind us. So unfortunately, there’s no way for us to know what will happen six days, six months or even six years after a disruptive event takes place.

What History Can Teach Us

Let’s look for a moment at the history of tariffs in the U.S. Over the last century, the country has only seen a couple of instances of tariffs on par with the latest round from the Trump Administration.

Take the Smoot-Hawley Tariff Act of 1930. It was enacted during the early years of the Great Depression and designed to protect American farmers and manufacturers from foreign competition by raising import tariffs on a wide range of goods. The effects of these tariffs are widely considered to have been disastrous. Canada and European countries retaliated with their own tariffs, global trade fell, and the U.S. experienced a period of deflation.

On the other hand, the first Trump Administration’s 2018 tariffs didn’t have the same impact, though neither did they have their intended effect of reducing the trade imbalance. In fact, imports from Mexico increased 63%, and the U.S. trade deficit with Mexico increased by 159%.

What’s more important than the relatively short-term effects of any market disruption, from the 1930s to the present day, the market has been steadily on the rise. This is despite the fact that many disruptive events took place during the same period, including World War II, 1970s stagflation, 9/11, and the Great Recession, to name a few.

Your Next Steps

This is not to say that disruptive events won’t have an impact on your life; they may. It’s possible, for instance, that the latest round of tariffs could have a direct impact on your wallet if they push prices higher. This could be a drag on your finances, especially if you’re on a tight budget.

When it comes to your investment portfolio, remember that it should be designed with the understanding that disruptive events happen, and the market has tended to rise in the long-term. As a result, you’re already prepared to deal with disruptive forces. When they happen, you may feel the need to snap into action—a totally natural response our nervous systems have graced us with.

Proper diversification and disciplined rebalancing may help you capture better risk-adjusted returns no matter the economic backdrop. And if your goals change, we can work together to adjust your allocations accordingly.

With that said, in the short-term, you may not need to make any adjustments at all to your strategy. Of course, disruptions are, by nature, jarring. So, if you have any questions about what’s going on in the news, markets, economy or your own portfolio, please reach out.

Instant online access has become our default setting. With a few taps on a screen, we can book a restaurant reservation, pay bills or check our investment accounts—all without a second thought. The digital revolution has streamlined our lives in ways we couldn’t have imagined. But there’s an unfortunate side effect: Every interaction leaves a trail of personal data scattered across businesses, employers, social media platforms, and government databases.

You can be sure these folks are doing all they can to protect your data—after all, it’s not a good look to lose control of user information. But you can also bet that cyberattackers are always looking for a way in; and they find one more often than we’d like.

Unfortunately, the data here is a little bit grim. In 2024, there were about 1.3 billion notices sent to consumers stemming from more than 3,000 cyberattacks on companies.

Here’s the rub: When stolen, your most sensitive data, including your Social Security number and banking details, can be used to rack up charges on your credit card, siphon funds from your financial accounts or open fraudulent accounts in your name. It can take a lot of time and effort to repair the damage.

What can you do to shield yourself from identity theft? Consider a credit freeze as an added layer of protection.

What Is a Credit Freeze?

When you freeze your credit, you stop lenders from accessing your credit report. Without this access they won’t extend credit, stopping would-be identity thieves from opening fraudulent accounts in your name.

Anyone can freeze their credit at any time. It’s free; you don’t have to wait for your personal information to be compromised and it won’t affect your credit score.

In fact, there’s little reason not to do it, except that the process can require a bit of legwork. You’ll have to contact each of the three main credit reporting bureaus—Experian, TransUnion and Equifax—online or by phone, separately, to request a freeze. (Note, some of the credit bureaus bury their free credit freeze services because they also offer pricey credit monitoring services. It’s worth it to spend the time finding the free versions.)

Here’s the information you’ll need:
• Equifax: Visit their website or call 1-800-349-9960.
• Experian: Visit their website of call 1-888-397-3742.
• TransUnion: Visit their website or call 1-800-916-8800.

Your credit freeze will remain in place until you lift it. Each bureau will give you a PIN or a password that allows you to do so. Keep this in a safe place.

If you want to apply for credit, such as a new credit card, a car loan or a mortgage, you’ll have to contact each one of the bureaus again to lift the freeze. However, if you’re able to find out which of the credit bureaus your potential lender uses, you can save a bit of time and contact just that bureau.

What If Your Information Has Been Compromised?

If you know or suspect that your personal information has been compromised, you may also want to place a fraud alert on your account. To do so, you only need to contact one of the credit reporting bureaus, which will then tell the other two to also place an alert on your file.

There are three types to choose from. Initial fraud and active-duty alerts last for one year during which businesses must contact you to confirm your identity before opening a new account in your name. If you know your information has been stolen and you’ve filed a police report or an FTC identity theft report at IdentityTheft.gov, you can place an extended fraud alert on your account. These alerts last for seven years, at which point you have the chance to renew it.

Is a Credit Freeze Right for You?

There’s little downside to freezing your credit, and a lot of potential upside. In other words, an ounce of prevention is worth a pound of cure. When fraudulent accounts are opened in your name, you might face financial losses and a long and involved process as you file reports, dispute fraud and work to repair your credit score. Avoiding this process may be well worth the small trouble of contacting the credit bureaus when you want to apply for credit.

Any other questions about keeping your money safe? We’re happy to help, so reach out and let’s talk.

Earlier in the month, you were likely bombarded with news of the latest market downturn. By Monday, August 5th, the S&P 500 had fallen more than 8% from its all-time high in mid-July—putting it a little bit shy of correction territory. By Tuesday, August 6th, the market had already staged an uptick. And by the time you’re reading this, much of the market decline has been erased.

Since we haven’t seen as much market volatility recently, this one may have left you feeling a bit shaken. Why here? Why now?

To be blunt, we don’t know for sure. Some investors might be worried the U.S. economy has weakened based on news of rising unemployment. Maybe it’s because the Federal Reserve didn’t cut interest rates in July, as many investors had hoped. Maybe it’s fears of a U.S. recession or an uncertain election year.

If we look for them, we can always find reasons the markets might have taken a turn for better or worse. Unfortunately, there’s no way to know in advance. But the good news is we don’t need to know. Instead, we know this: Markets have always climbed upward eventually.

This is a far more important message to bear in mind—and a comforting one for long-term investors like us.

So, what’s the best course of action? Sit tight and let your long-term investment plan continue to work for you. Instead of worrying about interest rates, the job market and strength of the U.S. dollar, consider focusing on enjoying the last few weeks of summer. Catch up on beach reads, barbecue in the backyard or simply relax by your favorite body of water. Read the daily financial news if you’d like—and let us know if we can answer any questions. But remember, the long-term planning we’ve done in the past means you’re not required to keep up with it all, if you’d rather spend your time elsewhere.