This week, I’m talking about the top investment news stories of 2019 and what lessons you and I can learn from them. 

Today, I’m talking about tariffs. The trade war with China and the impending doom of the tariffs dominated headlines all year long. And for what? Well, I’m recording this prior to January 15th, but that’s when phase 1 of the trade deal is slated to be signed. 

Unless you are in a business that relied heavily on imports from China, all this tariff talk has just been noise. I paid a little more for some office furniture this year than I otherwise would have, with the vendor passing on a price increase and citing the tariffs, but now I realize they may have just been looking for an excuse to raise their prices. 

According to the Tax Foundation, the nation’s leading independent tax policy nonprofit, “the tariffs planned and imposed so far by the Trump administration would reduce long-run GDP by 0.25 percent...If the Trump administration acts on threats to place new tariffs on automobiles and parts and additional tariffs on products from China, GDP would fall by an additional 0.32 percent.”

So even if the tariffs happened and we didn’t eventually reach a deal with China, just over a ½ % drop in our GDP, not exactly enough to push us into a recession or kill all of our jobs. Really, the trade war is much more about politics than it is about the overall economy, which is why it’s unlikely to have the predicted impact of your retirement portfolio that the news media claims it will have.  

I don’t think people were all that worried about the tariffs anyway, even if the media made it seem disastrous. 

The takeaway here is that it’s important to not get stressed or wrapped up in the media hype about certain events. Often, withholding celebration or panic until the outcome is final is the most prudent action. If you pulled your retirement portfolio out of the market because you were worried about tariffs and the doom and gloom drumbeat of the media, you would have been pretty disappointed missing out on the incredible stock market returns of 2019 that didn’t even bat an eye at trade talks. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip.

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