How Investors Can Stay Ahead

As the second quarter of 2025 unfolds, it’s clear: economic uncertainty isn’t just a headline, it’s the landscape. What began as a routine start to the year has shifted into something more precarious. Tariffs are back in the spotlight, whispers of a global trade war growing louder, and the threat of recession is growing. The question on every investor’s mind is: What now?

Let’s unpack the latest developments, and more importantly, explore how forward-thinking investors can turn turbulence into opportunity.

What’s the Latest with President Trump’s Tariffs?

President Trump’s tariff strategy has re-emerged as a key market mover in 2025. While early headlines focused on tariffs targeting autos and auto parts, the most consequential measures post-“Liberation Day” have been aimed at China, impacting a broad range of goods and intensifying global trade tensions. These policies threaten to raise costs for both businesses and consumers, fueling concerns about stagflation: a combination of stagnant growth, persistent inflation, and potential increases in unemployment.

Experts, including economists Frederic Mishkin and Gary Hufbauer, warn that these tariffs could function like a massive tax hike on American consumers.[i] Prices are rising, purchasing power is shrinking, and consumer confidence, often seen as a bellwether for economic resilience, has taken a noticeable hit.

The numbers back it up: the S&P 500 fell 5.6% in March and posted a 4.3% drop for Q1 overall, its worst performance since 2022. Six of the “Magnificent 7” tech stocks saw double-digit losses, with some plunging as much as 34%.[ii]

Are We Headed Toward a Global Trade War?

The economic ripple effects aren’t confined to U.S. borders. These tariffs are straining relations with key global trade partners, prompting retaliatory measures and sowing broader uncertainty in global markets.

According to the Atlanta Fed’s GDPNow model, growth for Q1 is forecast at a modest 3%, and Goldman Sachs now estimates a 35% chance of recession in 2025 due to weakening consumer demand and sagging business investments.[iii]

Meanwhile, some companies (especially in manufacturing and export-heavy sectors) are delaying hiring and pausing expansion plans. And as business confidence declines, so does investment in innovation and infrastructure, which are crucial for long-term economic health.

Recession Watch: Are We Really on the Brink?

While no one can predict the future with certainty, some economic signals are flashing caution:

• Consumer spending is softening, with a 0.6% drop in January and sluggish February growth.[iv]
• Inflation remains sticky, hovering above the Fed’s 2% target.
• Interest rates remain elevated, putting pressure on credit markets and borrowing.
• Business confidence is shaky, especially in sectors impacted by tariffs.

Even though the IMF isn’t forecasting a recession in the United States, it’s not ruling one out either.[v] In short: a slowdown feels likely. Whether that tips into a recession may depend on how consumers and investors alike respond in the months ahead.

What Smart, Strategic Investors Should be Doing Right Now

If you’re feeling a little uneasy, you’re not alone. But fear doesn’t need to drive your financial decisions. At Larson, we believe smart investing isn’t just about avoiding risk: it’s about preparing for it.

Here’s how experienced investors are staying resilient in this market:

• Diversify, Diversify, Diversify: a diversified portfolio is still your best defense. By spreading your assets across stocks, bonds, real estate, and alternatives, you reduce exposure to volatility in any one area.
• Defensive sectors (like healthcare, utilities, and consumer staples) tend to hold up well during downturns. Meanwhile, fixed-income instruments can provide a cushion when equities pull back.
• Reassess Risk Tolerance: if recent market swings made your stomach drop, it might be time to recheck your risk profile. Your Advisor can help align your portfolio with your comfort level and long-term goals.
• Build Your Cash Cushion: An emergency fund isn’t just for car repairs or job loss. It’s a core part of a recession-ready financial plan. Aim for 3–6 months (or more) of essential expenses in a liquid, low-risk account.
• Stay Long-Term Focused: knee-jerk reactions rarely lead to smart financial moves. While market timing may be tempting, history tells us the real rewards go to those who stay the course. Rebalancing, not retreating, is often the wiser path.

Why Partnering with a Larson Advisor Makes a Difference

Let’s be real: navigating a volatile market alone is stressful. And in times like these, the guidance of a seasoned professional can make all the difference.

At Larson Financial Group, we don’t believe in cookie-cutter strategies. We offer white-glove, personalized planning rooted in rigorous due diligence, designed to empower you to thrive, not just survive.

Whether it’s navigating tax-smart strategies, rebalancing your portfolio, or uncovering exclusive private equity real estate opportunities, our advisors are equipped to help you turn market instability into long-term strength.

Weather the Storm, Stay the Course

Yes, the headlines are noisy. And yes, we may be entering a more challenging economic season. But with the right strategies and a trusted guide by your side, you can stay calm, stay confident, and stay on track.

We’re here to help you make smart, informed decisions, whether it’s your next investment move or a long-term shift in strategy. Because your future deserves more than guesswork.

Ready to talk strategy?
Your Larson Advisor is just a phone call (or click) away. Let’s build something resilient, together.

[i] https://www.newsweek.com/experts-trump-tariffs-recession-risks-2053407

[ii] https://www.investors.com/research/magnificent-seven-stocks-april-2025/

[iii] https://www.forbes.com/sites/jasonschenker/2025/04/01/2025-recession-risks-just-increased-significantly/

[iv] https://fortune.com/2025/03/31/goldman-sachs-economy-shrinking-trump-tariffs-recession/

[v] https://www.reuters.com/business/imf-cuts-growth-forecasts-most-countries-wake-century-high-us-tariffs-2025-04-22/

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